Conversations
A Conversation with Jeff Brewer of Business Vitals
On August 2, 2011, EarthLink announced the acquisition of local Columbia, South Carolina based company, Business Vitals. MidlandsBiz chatted with the founder of Business Vitals, Jeff Brewer and EarthLink VP of Corporate Communications, Michele Sadwick, about the deal.
MidlandsBiz:
How did the process of the purchase get started?
Jeff Brewer:
In the first week of May, we received a call from Brian Fink, the EVP Managed Services at EarthLink. Over the years, we have had several inquiries about whether Business Vitals was available for sale. We explored some of them, but this one was different. EarthLink is a company that has tremendous market reputation and brand and I knew that would carry a lot of weight when talking to new customers. Brian and I chatted on the phone and it became clear that this was something worth pursuing.
MidlandsBiz:
What is EarthLink's core business and why did you initiate this process of purchasing Business Vitals?
Michele Sadwick:
We have been an internet service provider since 1994. That was our original core business, but over the past year, we have gone through a transformation and have purchased a number of business communication assets: ITC Deltacom in the Southeast, One Communications in the Northeast, as well as Business Vitals in Columbia, SC. These companies provided EarthLink with business customer bases and also fiber network assets.
Where we saw potential for growth in the market was in the areas of managed services and IT security. This is where Business Vitals fits in to our strategy. We can take the assets that Business Vitals brings to the table and distribute them across a much broader network of customers through multiple sales channels.
Jeff Brewer:
EarthLink has thousands of business customers who fit the profile for advanced, enterprise caliber information technology (IT) solutions. EarthLink offers enterprise level voice and data services for commercial customers and a nationwide, world class IT network infrastructure. That is incredibly leveragable when talking to potential new customers.
The resources and financial strength of EarthLink give us the ability to grow and invest in the business quicker than we could have done on our own. The economies of scale that you get with a nationwide sales and marketing function are also a big plus.
MidlandsBiz:
How big is EarthLink in terms of revenue and what percentage of your income is derived from business services versus traditional internet connectivity services?
Michele Sadwick:
In the last quarter, business services represented about 75% of revenue. EarthLink is more than a billion dollar a year company in terms of revenue.
MidlandsBiz:
Jeff, it must be difficult to sell a company that you have started as an entrepreneur.
Jeff Brewer:
It's always a bit tough to sell your own company. When you build a company by bootstrapping the operation as its sole investor, you become incredibly personally involved in your business. It's nice to be able to step away from the worries of running your own business and to focus on new customer acquisition and delivering additional solutions and services. This move provides better focus for me as an individual. I'm excited about leveraging all this new talent around us to help grow the business.
You have to come to terms that you are going to be operating in a larger organization and get busy working within that structure. Prior to starting Business Vitals, I had been a corporate guy for many years. My last job was as Chief Information Officer (CIO) for a national company, so the transition has not been that difficult from that standpoint. I always considered myself a bit of a reluctant entrepreneur.
MidlandsBiz:
As an entrepreneur, it must be validating to see your business grow to the point where someone wants to buy it?
Jeff Brewer:
It is very satisfying to know that someone other than yourself recognizes that you have done something of value. You have to ask yourself how long you want to keep doing what you're doing. Is it a better opportunity to be a part of something bigger?
MidlandsBiz:
Michele, Business Vitals was expanding its data center here in Columbia, SC. Do you plan on keeping the data center here?
Michele Sadwick:
Yes, we are keeping and optimizing the data center that came with the Business Vitals acquisition. The Columbia, SC data center is a very important part of the overall data strategy for the entire company. We also have three additional data centers within the EarthLink network that we are linking together on our fiber network. All will be connected and be able to provide redundant services to customers.
Jeff Brewer:
With EarthLink, we are able to fund significant improvements not just to the infrastructure that is housed in Columbia but also to each of the data centers across the county. The idea is to invest similarly in each of the centers so we can provide comprehensive, cradle-to-grave, IT security services for compliance services like HIPPA (managed health care facilities) and Gramm Leach Bliley (financial services). We want to be able to deliver consistent server or data-based business IT from any of the four server centers.
MidlandsBiz:
What do your South Carolina based customers need to know about the acquisition?
Jeff Brewer:
The important thing for existing customers is that the team that supports our customers here locally has not changed, in fact, it has expanded. Customers should call the same numbers to reach the same people they always have.
Michele Sadwick:
We are growing our services across the country and that includes South Carolina. It is important for people in the local community to understand that this acquisition is bringing growth to Columbia.
Jeff Brewer:
We are actively looking for talented people with great technical skills on the systems, security and network aspects of IT. We also need people who have great project management skills and who are IT solutions architects. Equally important are the soft skills. We need people who can communicate effectively with existing and potential customers and who have great customer service skills. We need people who can ramp up quickly and become part of a multi-dimensional, geographically diverse team of people that are all about meeting customer needs.
MidlandsBiz:
What opportunities do you see for EarthLink and Business Vitals going forward?
Michele Sadwick:
We are looking for managed services to be a much greater percentage of our revenue. In five years, our hope is that EarthLink will be known as a world class, comprehensive IT services provider that can tailor solutions for our customers' needs. The market is extremely fragmented right now in this space. Amazon, Microsoft, Google, Windstream, Dell, CDW, even Staples have a presence, but nobody has figured it out yet. We have challenges ahead of us, but the market is ripe for creative solutions to business IT needs. There's a lot of work to be done, but we are very excited about the future.
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