Recom Managed Systems Spins Off From Recom Technologies
Recom Technologies Inc., a long-time IT outsourcer for NASA and others, spins out a managed network service provider for the private sector.
By: John Spofford
With a strategy to offer high-end desktop and network systems support services to small and mid-size companies, Recom Managed Systems Inc. has opened for business in Northern California's Sacramento region. Recom Managed Systems is a spin-off of Recom Technologies Inc., an 18-year-old company with experience supporting the information technology (IT) requirements of large government customers, primarily NASA and the US Department of Energy.
RMSI's services will allow its customers to selectively outtask network support responsibilities. Its offering will include: technology and support planning; help desk and user training support for network applications; network equipment maintenance and technical support; network services for local-and wide-area network and Internet/intranet systems; and leasing, rental, and financing programs. RMSI also will provide IT staffing for both client-managed and outsourced (RMSI-managed) technical staff.
Market niche
The new company hopes to tap into a growing market for fully managed network services. A 1998 study by International Data Corp. predicts that the support outsourcing market will grow from $7.9 billion in 1997 to $17.4 billion in 2002.
It is a market currently served by at least 100 companies, reports Ellen Carney, director of integration and support services at Dataquest, a research and analysis unit of the Gartner Group Inc. It also is dominated by a number of very large companies such as EDS, Lucent Technologies, Pacific Bell (PacBell) Network Integration, Bell Atlantic Network Integration, AT&T Solutions, Lockheed Martin, Ameritech Custom Business Services, and MCI Systemhouse.
While these larger competitors generally target the Fortune 500, RMSI hopes to differentiate itself by offering similar comprehensive services to small- to medium-sized companies. To do this, the company plans to leverage its parent's expertise in the government sector, says RMSI CEO Jack Epperson.
Epperson suggests that by outsourcing the network to RMSI a small technology startup can better focus its IT savvy staff on the company's key business. "These are vital services to a moderate-size organization, which often gets bogged down by the task of supporting rapidly changing technology assets," he says.
Medium market is for real
Carney suggests that small- to medium-sized businesses increasingly will be a good target market for managed network service providers. "It is starting to pick up. The medium market buys network management outsourcing very much the same way that large corporations do, [with the] same kind of drivers, same kind of sales cycle."
"[RMSI]will do pretty well," she predicts. "But to some extent, they will be competing with PacBell. And the market is pretty crowded."
The level of competition in managed network services is enough to make even a gigantic service provider pause, she adds.
"I still hear from the large, notable companies that are thinking about entering the market. I advise them, ‘Why don't you think about private labeling it first to see if you can actually sell this, and if you have the patience for it, and get you customers to buy it, before you go out an spend $12 million building [a network operations center.]'"