01732 759725 38 VIEW FROM THE CHANNEL These are challenging times for smaller IT support companies being hit by price rises, unexpected surcharges and onerous minimum spend requirements, as Dave De La Haye, founder of FOIT Ltd, explains to James Goulding “Using FOIT really makes sense for our clients. I’m not going to be in their office all day doing IT; they just pick up the phone and talk to me when they need me, or I can plan projects and maintenance over a period of time. They’re not paying for a full time IT guy, but they’ve got somebody always available who knows their systems and is au fait with what they’re doing.” Dave De La Haye started FOIT, formerly known as Farm-out IT Ltd, as a subcontractor, providing IT support for a managed services provider (MSP) based in Southampton, while also building his own customer base. When that MSP eventually stopped trading, FOIT took over its client base. Today, the company has around 35 customers mainly in North London and Southampton, ranging from one-man bands to major service providers, including a sporting goods warehouse and a scaffolding merchant. Dave De La Haye provides all the support himself, occasionally calling on a consultant he knows for third line escalations and project work. Smaller companies like FOIT fulfil a vital role for growing businesses by taking on the burden of IT support and, in some cases, providing valuable strategic IT advice so that clients can focus on core activities. However, De La Haye warns that the actions of suppliers and wholesalers are putting the squeeze on smaller IT firms and making it harder for them to compete in the wider market. “As a smaller company with a small customer base, you’re shut out of dealing with the big suppliers. They don’t want to know. So you go to the wholesalers, the guys in the middle, and even they are now starting to get choosy about who they deal with. They’re becoming a bit discriminatory if they can’t see you generating loads of business.” De La Haye points out that this is a problem for a company like his because, although he has 35 customers, not all of them will take every one of his services. For example, only 10 of his customers require a broadband connection from FOIT, as most have existing arrangements with other suppliers or a leased line. “I can’t go to BT direct with 10 connections. Nor is that not an attractive proposition to the broadband wholesaler,” he says. “The other thing about being forced into using wholesalers is that there is a man in the middle wanting to make money somewhere along the line, which means the end reseller has no way of taking advantage of any decent pricing from the actual service providers. I’m never going to get broadband at the price the wholesaler gets. “If you try and sell it as a reseller, you can’t make any money on it because you can’t compete with the prices quoted by very big resellers that are able to sell vast quantities of the product and take a smaller margin. When somebody asks why my broadband costs £6 or £7 more than the average, I have to explain that it’s because it’s a business broadband service, with a better service level agreement and a faster response for support. “IT services for small businesses are very price-driven and when businesses see you can go to Plusnet or someone and get a broadband circuit for about £20, they say ‘why am I paying you £36?’. I point out that they’re paying for a service, not just a broadband connection, but it does make it harder to sell and you do end up constantly having to justify your prices.” Account surcharges De La Haye adds that some wholesalers are now rubbing salt into the wounds of smaller IT companies by applying surcharges to the accounts of customers that are not growing in line with their expectations. He cites an email he received from cloud services distributor Giacom on July 27 outlining updates to its Reseller Agreement including the right to charge resellers a £100 per month service fee on the basis that ‘it’s not sustainable to provide this high level of service for customers with a very low level of spend’. The message goes on to say: ‘If our offering no longer meets what you require or you are just looking for a way to procure a low volume of licences, we recognise that, FOIT Ltd is typical of the thousands of IT support companies that company founder Dave De La Haye describes as filling the gap between the time when a small business is set up with the help of ‘some guy who knows a bit about computers’ and the point at which it recruits a dedicated in-house IT expert. “Most small businesses start out realising they have a requirement for IT, which usually ends with someone saying ‘I know a bloke down the pub who’ll be happy to set up your computer and printer and stuff’. Then, as the business grows, it finds it starts running into all sorts of problems because it hasn’t got a cohesive IT strategy. I pitch myself as a solution provider for growing businesses. “We do the whole gamut of IT and communication services for small businesses: we do cloud services, which includes managed servers; we do IP phone solutions – we’ve got our own VoIP servers; we do desktop and server support; we include software support, licensing, backups and security as well. It’s a whole smorgasbord of services that any business will require. The big squeeze Dave De La Haye
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