When TechNoir Solutions CEO James Velco looks around him, he sees saturation and commoditization. MSPs are a dime a dozen in the Chicago market, where his company is headquartered.
Even though the managed services market is growing at a respectable 13% yearly rate, intense competition gets in the way of healthy, profitable growth — unless you’re willing to make big changes. That’s exactly what TechNoir is doing.
Rather than duking it out with the droves of competitors around him, Velco decided to take the company to the next level, adding capabilities such as application development, process automation, digital transformation, artificial intelligence (AI), and collaboration tools such as Microsoft Teams. For instance, TechNoir does a lot of work integrating Teams rooms with other business applications.
“We’re no longer just an MSP,” said Velco. “I’m in a big market in Chicago, where there are probably 200 managed service providers. They range from one-man shops to the 40- to 50-person operation doing $80 million to $100 million a year.”
In the face of so much competition, TechNoir is repositioning itself to boost value for both small and larger customers, further entrenching itself in their businesses. “When someone brings you in just for managed services, a lot of times, you’re kind of pigeonholed,” Velco explained. “If you come in at a different angle, people look at you in a different light.”
Back to the Roots
Velco got into managed services in 2014 after serving as a CIO in higher education for about 15 years. Back then, he did some consulting as well. A friend suggested he start his own business, and after about a year of thinking about it, Velco went for it.
“Taking my knowledge of the CIO, I started in managed services and felt that I was doing relatively well. I understand the business — the idea of really trying to land clients and long-term contracts because that brings value to your company.”
Over time, the inevitability of commoditization in a crowded space got Velco thinking about how to make TechNoir stand out. The answer lay in his roots. “I looked back at what I did as a CIO, and it wasn’t just repair work or provisioning computers. That was only part of what I did.”
He recalled how the CIO role required him to think strategically about the business. He would analyze repetitive critical functions to figure out how to automate them. Another task involved looking at processes in which multiple departments handled the same information over and over to determine how to create a single point of truth.
That’s when the new path for TechNoir revealed itself: Take that CIO experience and turn it into a new business model. So rather than just providing managed services, TechNoir now approaches the customer with a holistic approach, Velco said.
Focus on Development
As TechNoir redefines itself, one of the company’s primary focus areas is application development. Velco said the company started branching out into this field about four years ago.
“It opened some doors for us. Once we got into these businesses, we proved that we know what we’re doing. We can work with you and your different business departments to try and help you be more.”
An early success story involved a project for a high-end interior design company that had attempted to build a custom program to allow QuickBooks to communicate with other business applications, Velco said. “The original team that developed it couldn’t get it to work, so they came to us. We got it to work. And then they asked us if we could do other things for them.”
Clients often ask their MSP to handle more tasks, which is why pure-model MSPs often make the decision to diversify. In Velco’s case, the foray into software development and integration sparked further opportunities that otherwise would not have surfaced, he explained. “It led us to have other conversations like, ‘We do development, but we can help you with security, support, infrastructure and strategy.’”
Next Up: AI
TechNoir is now looking at how to apply AI to its interior designer client’s search capabilities.
The client employs a 22-person team to do online searches for unique decorative pieces, and the company’s database includes roughly 1,500 different websites with companies, studios, products, and more, Velco said.
“Their clients want to get this stuff as soon as possible, but it takes time for them to search. That’s one of the projects we’re working on to deliver the outcomes faster and more accurately.”
While intrigued by AI, customers may not immediately recognize the costs and time involved in training AI models. Part of the provider’s role is to educate customers and help them calculate whether the initial capital costs involved in AI will lower their operational and labor expenses in the long term, Velco said.
Although the cost may give customers pause, Velco believes the technology has a future. “AI is here to stay. It’s at the early stages, and certainly the costs will come down as it becomes more ubiquitous.”
As such, AI presents a significant opportunity for TechNoir, and the MSP market as a whole. Other current market opportunities for MSPs include Microsoft Modern Workplace, which Velco said, “makes a lot of sense for businesses now because it’s about the hybrid work environment and how to develop better outcomes from it.”
Cyber insurance is also worth considering, he said. MSPs can play a role in cyber insurance by auditing customer environments and filling security gaps in order to qualify for cyber insurance coverage, which is becoming a critical component in building a strong security posture.
Renewed Vigor
As he prepares for second-half 2024, Velco said TechNoir is approaching its market with renewed vigor.
Having spent much of 2023 strengthening its marketing and sales strategies, he believes the company is better positioned to succeed, even as the field of competitors keeps getting more crowded.
James Velco
CEO, TechNoir Solutions
- Year founded: 2014
- Location: Chicago (HQ); Troy, MI; Jersey City, NJ
- No. of employees: 10
- Website: technoirsolutions.com
- Company focus: Wholistic digital transformation
- Recommended book: “Gap Selling” by Keenan
- Favorite part of my job: Every day is a new challenge.
- Least favorite part: Finding employees that fit our culture.
- What people would be surprised to know about me: I have a metal plate in my orbital bone from a major car accident.
