In a competitive market, knowing your niche and sticking to what you do best is a proven strategy for success. Just ask the guys at Space Age Technologies. With IT consultancies a dime a dozen, company founders Chris Welham, Mark Geschke and Mathias Tölken have carved a niche for themselves servicing the needs of small to medium businesses.
“Everything about us, everything we offer is finely tuned to the small and medium business’s needs, goals and budgets,” explains Welham. In doing so, they’ve proved that specialisation can deliver a unique competitive advantage and offer critical differentiation to a brand. Based in Cape Town, since 2004 Space Age Technologies has been listed as a Microsoft Award finalist or winner and in 2007 won the Networking Infrastructure Partner of the Year Award – not bad going considering they were up against 600 000 other Microsoft partners around the world. Geschke was recently named among the MSP Mentor Top 250 Most Influential People and, perhaps most importantly of all, Space Age Technologies has maintained a customer retention rate of 94% over the past three years.
Seeing the gap
“When Space Age Technologies started out, the SME segment of the market was very under-serviced from an IT point of view. Small to medium companies really had to get by on their own. We saw a gap,” says co-founder Welham. Like many gaps in the market, the one they identified existed partly because it wasn’t an easy or obvious market to service.
“It’s true that the SME market comes with its challenges. For one thing, SMEs have much smaller budgets and run leaner operations, so that places a limitation on what you can charge them. “In addition, SME owners are typically brilliant in their own fields but they often lack a comprehensive understanding of technology, and don’t recognise the real value it can deliver to their business,” says Welham.
But for those who are willing to find solutions to such challenges, the market is there for the taking and Space Age Technologies was up to the task. To get around the budgetary constraints, Welham, Tölken and Geschke initially drew very small salaries – until they hit upon an innovative solution that addressed the challenge in the long-term. Welham explains, “Today its known as managed services and loads of companies do it, but at the time it was a new and untried concept. We realised that if we charged a fixed amount to provide all the necessary service and support for our clients, we’d be able to generate ongoing income and they would be able to budget better for their IT needs. It was a win-win situation.”
But in order for the managed services model to be effective, the company had to make a significant investment in systems that would allow it to monitor and manage multiple machines and servers. “In 2001 we developed a software system called SATAware that allowed us to automatically monitor our clients’ servers,” says Welham. Over time the company has refined and evolved this software, which generates weekly automated reports for all Space Age Technologies’ clients.
The company founders know that, while they may have captured the SME market early on, first mover advantage can only differentiate them in the market for a certain period of time before their competitors catch up. “This is why ongoing innovation is part of our DNA. In the IT industry, you need to innovate just to keep up, let alone to retain a leadership position,” says Welham.
Developing value-adding solutions
A comprehensive understanding of their niche market’s needs has played a pivotal role in allowing the company to develop new, value-adding and relevant solutions. One example is an offering known as Virtual CIO. “SMEs typically can’t afford to employ a chief
information officer but IT strategy, planning and budgeting is as important to their businesses as it is to that of large corporates.
“The Virtual CIO service is bundled together with the managed services option and allows clients to make sure that their business strategy and goals are supported by their IT infrastructure. It includes strategy, budgeting, risk identification and assessment, and capacity and growth planning,” explains Welham. Clients, understandably, love the idea and it provides the company with a valuable insight into their clients’ business needs, which allows them to identify additional business opportunities.
At the moment, Space Age is busy refining an IT Intermediate Objectives (IO) Map specifically for the needs of small to medium businesses. “It uses the Microsoft Operations Framework (MOF) and Theory of Constraints (TOC) principles, but has been built entirely by ourselves and has been developed to provide a clear picture of all the IT services SMEs require. It’s a work in progress and for the moment, we’ve made it available on our blog for public comment so that we can refine and improve it,” says Welham. Such visionary practices will be instrumental in helping Space Age Technologies achieve its three-year goal, as Welham outlines, “We want to be the top-of-mind integrator of IT services to SMEs in all markets we choose to compete in. Our next step is to establish a firm presence in Johannesburg.” N
Space Age Technologies
Players: Mathias Tölken, Chris Welham and Mark Geschke
Contact: +27 21 88 77 292