Many integrators today are touting the fact they’re making the move into managed services as a way to increase their recurring revenue streams. For our 2015 Integrator of the Year, though, that’s been a way of life for decades. Yorktel, which celebrates its 30th anniversary in 2015, has long been the industry leader in creating recurring revenue opportunities, although it was a tough sell at first when many didn’t understand what managed services are.
In fact, almost half of Yorktel’s revenue these days comes under the managed services umbrella. Considering total revenue last year was roughly $120 million, that’s a hefty umbrella.
“In the early days, we were trying to describe the concept,” says founder Dr. York Wang. “We knew the reliability had to be very high. We know the value of it and also how hard it is to build it for our customers. Equipment is a small component of integration. We believe one person should be able to deliver end-to-end results. It’s about changing behaviors, mindsets and end user expectations.”
No one has done that better than Yorktel, which had the third-largest market share of revenue among managed services providers (13.1 percent) in 2014 in a recent Frost & Sullivan report, behind only AT&T (24.6 percent) and BT Conferencing (15.6 percent).
Yorktel | yorktel.com
Primary Location: Eatontown, N.J.
Additional Locations: Boston; Landover, Md. (federal gov’t practice); Herndon, Va. (media services headquarters); North Carolina (telehealth practice); Buffalo, N.Y. (fabrication); California (sales); Chicago (sales); Basingstoke, United Kingdom (EMEA headquarters); Ireland (sales); France (sales)
Principals: Dr. York Wang, founder; Ron Gaboury, CEO; Bin Guan, chief technology officer; Judi Pulig, chief financial officer
Years in Business: 30
2014 Total Revenues: $120 million
Projected Commercial Revenues for 2015: $140 million
Number of Commercial Installs Last Year: 1,928
Top Markets: Healthcare, Pharmaceuticals, Financial, Retail/Entertainment, Federal Gov’t
Top 5 Brands: Cisco, Polycom, Vidyo, Pexip, MS Skype/Lync
Developing what’s become known as managed services was among the first tasks Wang assigned to Yorktel CEO Ron Gaboury when he joined the company 20 years ago as CFO. Gaboury worked with the U.S. Army on converting them from an hourly customer to one that got a steady diet of monitoring, live assistance and more for a single price before “managed services” became an industry buzz phrase and an approach many integrators still haven’t mastered.
“It’s a way of helping people manage the products they’ve invested all of this money in,” explains Gaboury. “We knew there was a need, especially among some of the federal agencies we were working with for this.” Those agencies included the Internal Revenue Service and U.S. Department of Agriculture, as well as large companies such as AT&T and Verizon.
“There’s an investment that goes along with providing these services, both in terms of infrastructure and the talent pool. You have to know what you’re talking about,” says Gaboury. “Video communication has always been the core of our expertise,” he adds. “Even while the lines blurred over time between AV and IT, the effectiveness of video usage and our ability to resolve the common interoperability complexities has been our niche.”
The Early Days
Wang looks at the word “integration” as having two levels of meaning, one being putting pieces of equipment together create a system and achieve the customer’s goals. Second, though, is putting a vendor’s capabilities together to create a value for each other.
Wang says he started Yorktel because in the early 1980s, AT&T didn’t believe there was a future in video conferencing, but he had faith in the concept. The Eatontown, N.J.-based company started with Wang and his wife and several part-time employees, with equipment supplied through various manufacturers with whom he’d worked during his time at Bell Labs and as a consultant.
“If you lose money and invest in goodwill, someday it will pay off,” says Wang. “But even I never thought we’d have more than 400 people working for us and we’d be competing with the big players. It’s been a really amazing journey.
“We’re pretty bold. We want to participate in much bigger areas. Unified communications is the playground for the big boys. That’s the direction to go,” he says. These days, Wang spends most of his time in Florida, although he’s still on the company’s board of directors. He and Gaboury talk at least once a month.
“You observe a lot just by walking around,” says Wang. “I feel good about not having to be there myself. People tend to encourage one another to do well, rather than worrying about who did what.”
Ready for Anything
Although Yorktel has “had to reinvent ourselves many times over the years,” according to Gaboury, the new identities have always emerged in an effort to helping customers get more of what they need from one source. That’s only part of the story behind how Yorktel has grown from a $4 million company when Gaboury joined two decades ago as CFO to a $140 million projection in 2015.
“We didn’t have a sales engineer 20 years ago, we didn’t have solutions architects six years ago and there was a time we didn’t have a sales group,” says Gaboury. “If we had just stayed looking to install video conferencing systems, we wouldn’t be here anymore. If we say ‘we don’t do that,’ we wouldn’t have grown like we have. We’re a small company with big company capabilities.”