Brennan says mid-market ripe for the picking

The Brennan Group claims its June 2008 sales revenue of $8.2 million and 13 new business wins proves that businesses in the mid-market space are demanding technology despite soaring fuel coasts, falling consumer confidence and a tightening of credit.

Dave Stevens, Brennan's managing director, told CRN the demand for IT solutions is strong in the mid-market.

“The segment is becoming more strategic in the way in which it views its IT investments and we are seeing a trend towards clients embracing more sophisticated solutions such as ERP, Software-as-a-Service and virtualisation,” he said.

According to Stevens, mid-market businesses are looking for IT service providers to help them ease the pressure from a cash flow perspective and a cost perspective and are subsequently turning to managed services.

“One of the ways we help is often we’ll contractually guarantee they get an outcome. For instance if we are virtualising a client server environment then we will often drop the maintenance fee. What this will do is drive revenue into a different part of our business,” he said. “The end result is if we don’t introduce efficiency and canabalise the market, then we just end up sticking our heads in the sand and someone else will introduce these measures.”

Stevens claimed Brennan’s strategy was nothing new. “We are just getting better at offering value proposition and understanding challenges and mapping out a solution,” he said.

Despite the lucrative opportunities in the marketplace, many resellers still had problems with finding ‘the sweet spot’.

He believes anecdotal evidence from some of Brennan’s new clients suggest that the majority of resellers are only interested in meeting monthly sales targets.

“They are not very in-tuned with getting business outcomes,” said Stevens. “We have seen this in the new clients we have picked up and the state the previous reseller left them in,” he said.

For some resellers “it's all about selling hardware, then the end game for resellers," said Stevens. "Unless you can write good software or customise the reseller is restricted to what the vendor provides".

An example of this is a typical systems integrator, Stevens claimed. They may be able to do a capable job of rolling out ten servers, but all the client gets is network PCs talking to each other. Stevens said Brennan would be more than happy to share its business plan with competitors because the service provider isn't reinventing any wheel.

In the meantime, Brennan will be making some big announcements over the next coming about moving the service provider moving further into the SaaS space, said Stevens. The service provider is also looking at a couple of acquisitions, but nothing immanent.

“We still have our hands full with the phone companies that we recently bought. The phone hardware business is such a volatile market. It’s often the case of one step forward and three stopes back. But it’s still early days and the traction in our client base is going very well,” he said.