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EmXcore podcast Episode 3: Talking multi vendor services, IT life cycle and sustainability

In this episode we talk to the managing director of Integra Multi Vendor Services, Maarten Folmer about the benefits of multi vendor service, IT lifecycles and sustainability

EmXcore podcast Episode 3 with Maarten Folmer

Lisa:
Hey everyone. And welcome to another episode of the EmXcore podcast, a podcast where we will invite customers, partners, or anyone of whom we think has something interesting to say, or has some interesting views on the internet and networking industry .

Today our newest team member Arno Leisius talks to the CEO and owner of Integra Multi Vendor Services, Maarten Folmer.

Arno:
Hello Maarten. A warm welcome to this podcast. First question to you, how did you come up with the idea to start this company?

Maarten:
Well first of all, thanks for being here I appreciate the invite. So yeah, I’m Maarten and I’m the managing director of Integra.

We specialize in multi-vendor IT support, which is also called third-party maintenance.

I’ve been working for several companies where and got to kind of understood the IT life cycle a little bit more. And from what I have actually experienced in the market, is that the customers who actually joined a third-party maintenance program are a lot more flexible in terms of managing their IT infrastructure and could actually benefit a lot more from the technical use of the systems instead of being caught up in the vendor IT life cycle.

Arno:
And the company you started, was that related to your education?

Maarten:
Not really. I’ve always had a huge passion for IT, for technics in general really. My background is international business and management, which is basically a whole different study. But yeah, since I always had a huge passion for technics I started to work for a company straight after school, which was specialized in vendor support, which immediately caught my attention obviously.And yeah I actually grew in that particular area and decided to go forward in IT.

Started the company back in 2013 where third-party maintenance was relatively new to the market. So what we’ve done is, we basically learned a whole lot of strategy topics on how to maintain the IT infrastructure,, aside from the standard vendor support. And it actually got me to learn that there are far better and more flexible alternatives. And that’s one of the reason why I started to move forward in this particular branch.
And see wheter I could perfect the strategy of the IT maintenance life cycle, trying to be the regional market leader in third-party maintenance. Although we do business all over the world.

Arno:
And you specialize in out of warranty support?

Maarten:
That’s correct. The whole life cycle is actually built around the end of service life. A proposition which basically is set by the vendor. And instead of just listening to the vendor and being pushed into an IT tech refresh cycle, we basically say the lifecycle of an it system is not based on the well, the vendor rules, so to speak. So when it is financially written off and the vendor is actually pushing you to watch a refresh cycle, we say that’s actually not really how this should look like. The technical use of the system is far more important than actually follow this path which the vendor prescribes.

Arno:
So the IT tech refresh cycle is pushing our customers to always take the latest innovative hardware, faster, better, improved. And the excisting product becomes obsolete, irrespective of the actual need, whether it is required yes or no. The actual question for our customers is, do we need to invest in new hardware or do we invest money in our core business?

Maarten:
That is basically the life of the OEM, of the vendor. If they would actually not do that, but focus their core strategy on maintaining equipment and keep it running for as long as possible, they would not make any money.

Arno:
So what you’re saying is that the IT tech refresh cycle is pushing customers to always take the latest hardware, wheter they need it or not. But they should better focus on what they do.

Maarten:
That is indeed the strategy, which actually is a very interesting discussion because if you talk to a system admin for instance they would love to work with the latest and the greatest. So they would always prefer new equipment while the CTO or CFO may actually have a whole different interest, which is basically keeping the IT expenses as low as possible. Obviously while maintaining business continuity. And that’s one of the reasons why it would be a very good starting point to at least think about third party maintenance as the alternative. Simply because you can extend the life cycle pretty easily by five, six, maybe seven years, and then use the cost for an IT tech refresh for other strategical investments, innovation as well as business growth instead of just buying new equipment because the vendor prescribes new equipment.

Arno:
The market in which you operate, how has that evolved from 2013 until today?

Maarten:
Well, what we see is that third-party maintenance is becoming more and more mainstream. Where in the past we really had to enter multiple discussions with the people to make sure that they understand what the benefits of third-party maintenance should be, we have now seen that a lot more people are actually common with the term third-party maintenance. They know what it actually means, and more importantly, they also know what it can mean for the business.

So in general you can actually save 50 to 60% in relation to a traditional vendor support agreement. And all that money, that IT budget, which you actually free up can be used to invest in other, you know, business departments as well as innovation. And in a fast changing and dynamic market I think it’s key for organizations to innovate, to invest in innovation, which makes the discussion a lot more easy in relation to let’s say a year or seven, eight back.

Arno:
So one of your USP’s is that you offer customers, the possibility to focus on what they do best their core business.

Maarten:
They can focus on the primary business processes instead of having their focus on IT renewal cycles, which are obviously, I think, holding back the growth of companies in general.

Customers can focus on the primary business processes instead of having to focus on IT renewal cycles, which are holding back the growth of companies in general.

Arno:
And what about the competition?

Maarten:
What we see in the last two to three years is that the landscape of third-party maintenance providers have actually shifted from smaller independent IT service providers to a few major players which actually dominate the market. We as Integra still remain independent. We don’t have any shareholders and I am the sole owner. So we really are a privately owned company.

If you look at the competitors, they basically have the buy and build strategy, which is to implement and integrate more and more smaller companies Which in my opinion would not really benefit the flexibility and the efficiency of such an organization. Obviously when you are a very big organization the business goals are different than when you have a smaller organization and you are more focused on the core product, the core service. So indeed it’s a, it’s a changing market, but we as Integra remain independent for as long as we can. Which definitely will be for some more years to come.

And that’s definitely one of the interesting choices you have to make when choosing an IT maintenance provider. Do you actually want to be a member of a very big company who actually has the goal of maximizing their margin and their profits, or do you want to be part of a smaller company who actually has more direct communication lines? Service performance is still number one here at Integra. I’m sure you will understand that being a mid-sized company yourself.

Arno:
Yes, indeed. Our customers value tailor made solutions and the dedicated support we offer.

Maarten:
That is correct. So flexibility is one of our main terms. In relation to a vendor support contract, you basically have very little options to choose the minimum duration for a contract would be a year. Where we actually work from weeks to years. Also we have the option to set certain SLA’s per asset, which basically means that you can really have a tailor made service agreements which works best for your company. Instead of just one big agreement, which is not very flexible in terms of what you actually need. You just pay for the option the vendor gives to you.

I also I think it’s very important to mention that we are multi-vendor, which basically means that we act as a single point of contact for multiple brands.

Arno:
Yeah. It makes life more easy for a company

Maarten:
True! So where you would normally have five or six vendors. I mean, the bigger the IT infrastructure gets the more different brands you will discover within the infrastructure. So where you normally have a few of these vendors, if you have hardware incidents or other issues, you need to really look up where to go with your issue. And now with a multivendor service you basically have one single point of contact for all the IT infrastructure components.

Arno:
And talking about the current year with COVID, a lot of things changed. How did that impact your business or your way of doing business with your customers?

Maarten:
Well apart from the fact that basically everything goes digital right now we definitely see that in economical crisis companies really have to think about cashflow management or cash management in general. Where they normally had a huge IT budget and basically the spending of that particular budget was not on discussion, we see that the vast majority of companies now start to think about how to reduce the costs on commodities like IT for instance. Third-party maintenance would be a very good alternative in this particular case because it’s a very easy switch from the vendor to the IT service provider, specialized in IT maintenance. And also it will generally cut your IT budget basically in half, leaving half to spend on other items, as we just discussed, for instance, innovation, etc.

Arno:
Have you noticed any other changes this year?

Maarten:
As a Company itself we basically have benefited from the crisis. We have actually hired people, we grew in terms of turnover, so it was a very good year for us. Maybe some changes in strategy because everything is going digital right now, instead of just being able to step into your car and go to a customer for a face-to-face meeting. But nevertheless, it was a very good year.

Arno:
Maarten, last time we spoke you reflected on an interesting topic called SDN. Service defined networking, can you please share your thoughts and your point of view with us?

Maarten:
This is something which we’ve seen in the last few years where the vendors actually stopped looking at the hardware. Where normally you had, let’s say an IBM or an HP or Cisco or Juniper investing quite a lot of money in their hardware to make the hardware their unique selling point. Where the last few years the transition was made from the hardware, more to functionality as well as software. The vendors started to basically work on making their own software and started focusing on innovation on that particular software, leaving the hardware just for a commodity.

What that means is that the hardware became less and less important to the vendor. It’s now just a platform which facilitates the functionality as well as the innovation based on that particular software. But the hardware itself is no longer part of the USP. They gave it a color, they gave it a name, but the functionality and the added value is basically in the software and not in the the hardware anymore. Which gives us another good topic to discuss third-party maintenance, since it has become a commodity it doesn’t matter who is actually maintaining the box.

Since it has become more of a commodity it doesn’t matter who is actually maintaining the box.

Arno:
So what happens is that the big vendors, they can offer licenses to basically take back this role. Now, will there be certain, let’s say licenses offered from big vendors, like Juniper will that be an opportunity for vendors to step back into servicing their customers?

Maarten:
That is true. Where a lot of people are thinking about the switch to a software defined networking, as also, incorporating the licensed functionality. Obviously the vendors will actually change from earning their money on the hardware to earning their money from functionality as well as licenses. I think that you will have to pay for the licenses in the future instead of for the hardware. Basically that does not stop the third-party maintenance option from being still a valid argument to workwith the IT provider. And in that perspective the vendor partnerships that we have basically is that we leave the software support to the vendor, because that’s just not our cup of tea. And we focus on hardware support, where in case of any questions about these licenses, we will be able to get back to the vendor directly and ask them.

So it’s basically not that third-party maintenance providers like Integra really are replacing the vendor, but they work side by side. And it actually is in pretty good harmony, I can tell you. We leave the vendor to earn their money on functionality and licenses while we actually take the responsibility of maintaining the hardware on the other end. So basically there’s no risk on business continuity there, even with the transition to software defined in general.

Arno:
Have you seen any other trends in the market? Let’s say if you look back to the last five years.

Maarten:
Well, aside from obviously the innovation on the hardware itself. I mean, we have had huge progression on speed and bandwidth and techniques to transfer data from one point to another in the networking industry, but also to process the huge amount of data in terms of the resource and processing power. I think the innovation really is something we are benefiting from. It’s not only that you can process data more easy and in bigger numbers, but it also takes care of the economical prosperity. Because it is becoming more and more available for companies and so they can automate their processes and be more efficient.

Arno:
There’s one topic we haven’t covered yet. And that is sustainability and circular economy. We have talked about the increased demand for more bandwidth, lower latency, more up time, the tech is developing at a faster and faster rate.

You buy new gear every year, however the raw materials do not have a limitless availability. So we have to rethink what we are doing. Is that also one of the increasing concerns which your customer base as well?

Maarten:
That’s an interesting point you make there. Indeed over the last few years where we basically hada huge discussion on the environment. You know, where are we go with this and also what we leave to our children in let’s say 50 years. I think that you can definitely say we are being able to do something about that, to give a positive contribution to the environmental discussion by thinking about how we can actually go into this durability strategy.

So I would say, yes, the IT life cycle is definitely something which contribute to the durability strategy in this market of consumables. It’s far better to think wisely about how to use our IT in a sustainable way instead of just buying new equipment every three years. Because also from an environmental point of view that just doesn’t make any sense.

The IT life cycle is definitely something which contribute to the durability strategy in this market of consumables.

Arno:
Yeah. Certainly. With sustainability in mind are IT users becoming increasingly aware of buying only what you need, which can offer you the best TCO, total cost of ownership?

Maarten:
That is correct. We recently get ourselves into discussions where we sit down with the CTO or CFO of a company and they actually are telling us that support is not really a topic because they have additional spares to facilitate the business continuity. And if you dig a little bit deeper you will find that the company has actually bought some extra spares and systems because the vendor support is so terribly expensive.

Third-party maintenance in that perspective is a lot more efficient because the pricing of a support contract, whether it will be 24, seven by four hours on site, or next business day, it’s a lot cheaper than vendor support anyway. So also in that particular durability conversation it doesn’t make sense to buy more equipment and put it on the shelf, that will be just a waste of money and it would also be bad for the environment.

Arno:
So basically what we can offer our customers is a better management of the life cycle.

Maarten:
And also while doing that, managing the IT life cycle, keeping in mind that sustainability is a very important Topic.

Arno:
I lately had a conversation with my son, he’s 17. The people from that age, basically blame us, our generation that we have spoiled the whole earth. I aslo feel responsible that we do something to reduce our footprint of let’s say waste. And that is definatelly one of our goals as well .

What is your ultimate goal for the future?

Maarten:
Well here at Integra we are very ambitious. We still want to remain independent and a privately owned company. I think it’s very important for us to focus on growing the company towards the, well maybe even becoming the European market leader in third party maintenance support. And also the sustainability part is where we actually make the world a little bit better, you know by extending the IT life cycle andgoing against the consumable economy.

Arno:
We have covered a lot of interesting topics, but there’s one more thing left. And that is the announcement that Integra multi vendor services and EmXcore are entering into a corporation in which EmXcore will be able to offer onsite support on a worldwide base. So that means that not only our hardware will be shipped all around, but we also offer onsite support, powered by Integra multi vendor services.

Maarten:
Indeed, we recently entered into corporation on the field of on-site support services on the global scale. As you know Integra is having their own staff in the Benelux where we have our backline support engineers based from a town close to Amsterdam, facilitating the the feet on the street as we call it.

How that works in terms of the global support is we engage partners which we then assist in the onsite support services, which we provide for your customers. And we facilitate the technical support, the triage as well as the service desk, which is obviously native Dutch as well as native English from out our head office here. And we manage the field engineers globally and assisting them with their technical support and replacement procedures while at the customer sites. Could be in San Paolo could also be in Shanghai. Basically we have a very large partner network which can assist you in delivering that particular support globally.

Arno:
Could be excellent. I look forward to that cooperation.

Maarten:
Likewise, definitely. I think it’s a great step for us, both moving forward,

Arno:
Maarten, thank you very much for joining this podcast.

Lisa:
For the people listening, thank you for listening to this episode. Please let us know what you thought about it, or if you have any suggestions for the next episode. Hopefully until the next one.

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