Harris Williams maintains strong relationships with leading companies across our 10 Industry Groups. Ongoing dialogue allows us to better understand how companies are navigating COVID-19, how businesses support organic growth in the current environment, how they are executing on M&A objectives, and how each of these strategies has evolved over time—which is essential knowledge in today’s dynamic environment. In this series, we share recent conversations with key players in the industry, focusing on each of these dimensions.
Basmajian: Ntiva sits in a very attractive sector that has continued to evolve and that has led to the need to provide a broader range of outsourced IT services. As you reflect on the evolution of IT services, what stands out as key developments for the industry, and where do you think the market is headed?
Freidkin: Managed IT services as we know it today has immense value to organizations. Managing technology is not a strength for most organizations and doesn’t need to be executed with only internal resources. Many technology functions are better suited to outsource to third-party providers with more experience. Those providers are typically able to support technology more efficiently and in a manner that more effectively addresses bridging business objectives with technology infrastructure management.
Ntiva strives to introduce IT-related services to customers before those technology offerings become a competitive necessity. By focusing on that approach, we develop a partnership with our clients to understand their needs, ensure that their technology stack is stable, and add value by bringing in new technology that aligns with their organizational objectives. It’s important to continually monitor new developments within the IT services landscape. Windows for introducing cutting-edge solutions to create competitive advantage are getting shorter as the pace of change accelerates over time.
Looking back at the evolution of our services, we initially focused on delivering a holistic managed IT service to our clients. We then dedicated resources to help shift customer workloads to cloud infrastructure with ongoing software to support that service offering. We are now at a point in time when even smaller customers are focused on cybersecurity-related services. Customers are requesting security support for two primary reasons: maintaining compliance and driving effectiveness. In many cases, our customers are facing newer compliance requirements and need our help to navigate those considerations. With the vast majority of our clients utilizing remote workforces, there is a tremendous need to effectively secure and monitor data across a more dispersed environment.
Part of our success over time has been to identify these trends and then quickly introduce services that address the evolving needs of our customers. That discipline is a huge reason why we’ve been able to grow organically, especially this year, despite the current pandemic.
Basmajian: Your services are becoming more applicable to a wider group of customers and industries. Are you seeing your total addressable market change?
Freidkin: The market for managed IT services has expanded across company sizes and industries. Our focus has been on creating differentiated products and services that address the needs of that expanding market.
In particular, while we provide traditional products and services, we make a bigger impact with new services that are created as a direct result of listening to the complexity that our customers face. There’s a bigger pool of companies that are interested in outsourcing some IT-related services, but we are focused on the set of customers that continues to recognize that technology is key to their growth but lack the internal resources to support their growth effectively. This means that we are looking for customers who not only want the core services to keep their operations running, but who are also willing to invest in technology to help their organizations grow.
Basmajian: What has allowed you to navigate the COVID-19 disruption? What has helped you sustain through this period?
Freidkin: We were already providing virtual services, so we were well-positioned on that front when quarantines took effect. Our biggest shift was in the number of physical offices we were supporting. We went from a couple thousand physical offices to tens of thousands of home offices overnight. Our call center became much busier supporting so many workers from their home offices. We also observed an initial pause in several ancillary services as customers tried to understand how the pandemic would impact their specific business.
We intentionally tried not to overreact or do something irrational. We also remained committed to our team and refused to reduce our staff. Personally, I leaned into the early COVID-19 disruption as an opportunity to reflect on how I was leading the company, on areas Ntiva could improve upon and on ways we could help our customers survive. Our business remained stable during the early days, and we didn’t observe a meaningful disruption to our core offerings. We doubled down on what we do best, did not disrupt our internal team, and consistently and frequently reached out to our customers to support their situations. When demand for ancillary services began to return, we were able to meet that demand and expand our services with existing customers.
In periods of business disruption, it is easy to cut back on spends such as marketing. But we shifted gears and used the early days of COVID-19 as an opportunity to help educate small businesses on ways to outsource their IT needs, so that they could address their core offerings. We provided general advice, thoughtful insights on ways to navigate this period, and access to technical tools. This undertaking had a direct impact on our external profile and lifted website traffic substantially. Once the economic environment stabilized, we found this supportive outreach resulted in a meaningful influx in new leads and clients.
In my role, I’ve learned if we are consistent in delivery, positive in our engagement with clients, willing to work hard to help our customers succeed, and don’t run away when situations get complicated – our business will continue to be relevant and sought out for its services.
Basmajian: Leading companies within the managed services ecosystem have approached service lines from many different angles. Where do you see the greatest driver of organic growth in the future?
Freidkin: We believe in the importance of deep industry vertical expertise. Our goal at Ntiva is to make sure that we have both the sales acumen and delivery capabilities aligned to each of our supported industry verticals to deliver exceptional client support.
We’ve also focused on three geographic regions and remained centered on building scale in each area – the Northeast, the mid-Atlantic, and the Midwest. We intend to maintain a disciplined focus on these regions until we reach a relative scale that warrants expanding into another location. Within each area, we are focused on expanding vertical expertise and adding additional industry verticals to execute on our goal of being one of the best-managed service providers in the market.
Outsourcing a company’s IT needs requires a high level of trust, which we’ve steadily been able to build over time through reliable service and strong customer relationships. We have a constant focus on leading with the best talent in the market. In any region we support, our field technicians and account managers deliver a level of excellence to the market each day. We also rely on our team to develop new relationships in each of our regions to help identify the right new customer opportunities and be fluent in what our customer base needs.
We expect the greatest driver of our growth to come from this continued commitment to community presence with local relationships combined with best in class, centralized services that can execute with speed and accuracy.
Basmajian: When you decided to partner with Southfield Capital, what were your growth objectives at the time, and how has the partnership unfolded?
Freidkin: As I went through the process of considering new partners, I was very selective in the groups I was willing to consider. I was specifically focused on finding a partner that not only would support Ntiva’s growth in good times but would be standing next to me if something unexpected happened. Southfield stood out to me. Over the past four years, the partnership has worked out incredibly well. Southfield has supported our leadership team and continues to help us scale the platform. When the pandemic started, the hard conversations with the team focused on what would be best in the long run, not forcing fast decisions to maximize enterprise value in the short run. That commitment to building a great company with staying power is a big reason why we were able to be nimble and emerge more successfully than others during this pandemic.
Basmajian: You’ve completed 10 acquisitions in partnership with Southfield. How do you see that evolving over the next two to three years?
Freidkin: The managed IT landscape is consolidating, and there is going to be further consolidation over the coming years. We’re committed to leading that consolidation and firmly believe Ntiva is the platform to accelerate it. However, we have been incredibly focused on maintaining a disciplined approach to pursuing add-on acquisitions. We will not acquire companies that lack the right culture or the product, service, or regional focus of our business. We do believe there’s a significant runway to further scale Ntiva. There are thousands of companies, and we have a huge opportunity to do it right if we are smart about it and don’t rush into deals.
Basmajian: As the industry continues to evolve, what is on the next frontier that excites you?
Freidkin: I believe the next evolution in IT services will be centered on the power of artificial intelligence and harnessing data to make better, more informed decisions, even for smaller and smaller companies. There is a tremendous opportunity to use data more effectively and in an autonomous manner. As business intelligence and artificial intelligence converge, these concepts will become more relevant to our clients. But even as we look ahead and develop AI-related solutions, we will maintain an unyielding focus on providing our fundamental, core managed IT services. We need to deliver these in a better, faster, and less expensive way than ever before.