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December 2005
When You Need IT Now
By Heather Head

     On October 26, the wall is covered with the names of victims of Hurricane Wilma, the third major hurricane to cause catastrophic damage in the U.S. this season.

They are the names of ordinary people, small business owners, with families and pets, and careers not too different from yours. A few days ago, they were not expecting to be among the names on this wall.

But this is no sad memorial etched in stone. This is an active, ever-changing database, and it is a tool of hope for those whose lives have been altered by the course of this latest catastrophe. The wall is the white board in Bob Boyd’s office at Agility Recovery  Solutions, and it is the hub of a great deal of activity today. 

Boyd has an exciting job: he gets to be a hero. No cape or special powers – unless you count the  ability to work happily with his own father – but nonetheless his latest endeavor has resulted in a sort of salvation for dozens of businesses and their owners in recent months.

 

Simple Complexity

Since becoming president and CEO of Agility Recovery Solutions in February 2004, Boyd has changed an entire industry to deliver disaster recovery capabilities to small businesses – a service formerly available only to very large, very high-revenue companies.

Besides Agility, only a few major players dominate the industry of disaster recovery. All of them focus on Fortune 5000 companies – companies large enough to pay the tens if not hundreds of thousands dollars a month it costs to have a company like IBM on call to help pick up the pieces in the event of a disaster.

But when Generation Partners, the venture capital firm that owns Agility, brought this former Muzak executive on board, Boyd did a crazy thing. He started selling the service to small businesses starting at $200 a month. Yes, that’s only two zeros!

Small businesses like Gillis, Ellis & Baker, whose office was wiped out by Hurricane Katrina in New Orleans mere months after signing up with Agility, and whose office was back up and running – and processing claims for fellow victims – within four days of the disaster that rocked the nation.

How? Agility.

The core of Agility’s service is deceptively simple: They help businesses get back on their feet by providing recovery planning assistance in advance, and then mobile offices, satellite voice and internet capability, power generation, IT hardware, and consulting as necessary during a crisis.

The concept is simple, the logistics complicated. Agility maintains warehouses in Atlanta and Toronto filled floor to ceiling with IT equipment of all descriptions, makes, models, and capabilities. They have state-of-the-art mobile units in both single- and double-wide sizes stationed in locations throughout the U.S. Then there are the generators, the satellites, the bandwidth, the partnerships with shipping, construction, IT, and many other companies to assist with delivery and set-up.

And all orchestrated so beautifully that they have not once failed in their commitment to get a client back on its feet quickly. Not even when 19 companies simultaneously declared a disaster immediately after Katrina; not even when 21 declared following Wilma.

 

Salvation

Boyd seems pretty pleased with what his company has done so far. He describes his trip to New Orleans, two days after Katrina struck: “You look at these people, ordinary people whom you could be friends with – they had lost everything, and you think, how can they get up and keep going?” He shakes his head. “But then they can go into work and have some semblance of normalcy, and you realize you really have helped them.”

One client, he remembers, received a special permit to go back into their damaged office building to recover some equipment. While there, he selected one photo from the desk of each employee. When the employees showed up for work at the mobile unit the next day, that photo – in some cases the only family picture they had left after the flooding – was sitting on their new desk. Some broke down in tears.

But it’s not just the big disasters like Katrina that call for heroes. Software failure, electrical outages, wind storms, gas leaks, fire, chemical spills, data corruption – the list is long and scary, and includes many disasters that are localized to a single building or even a single small company’s data.

According to Boyd, industry statistics indicate that in the next five years at least 20 percent of small companies will suffer an event that causes an interruption to their business. Of those that do, fully 60 percent of them will not survive another two years.

“It’s not for the reasons you might think,” explains Boyd. “Think of Katrina – most of those businesses may be able to open their doors in a month, but meanwhile their customers will have gone some place else.” Additionally, he adds, they may not be able to collect outstanding receivables due to loss of data: “They won’t know who owes them money or how much.”

“That’s what kills them,” he says, shaking his head again. “They can never get back to where they were.”

And that’s what makes Boyd and Agility into heroes. After Katrina, two local insurance agencies affected by the storm were able to quickly open their doors to begin processing claims: they were both Agility customers. Needless to say, they’re not likely to be in the 60 percent of failures in two years.

 

Math Thing

Insurance companies are among Agility’s target clientele, in part because insurance companies also make great sales agents for Agility. First of all, they quickly grasp the concept of Agility’s monthly premium to ensure coverage in case of a catastrophic event, and so it’s a product that makes sense to them.

Secondly, it’s a product that actually saves them money by saving their clients money in the event of a loss. Business insurance usually covers actual losses from a covered event. Companies that purchase Agility suffer less loss and therefore make smaller insurance claims. So Agility is a strong complement to an insurance company’s existing offerings.

Finally, it makes them look like heroes too when something like Katrina hits.

Gillis, Ellis & Baker, for instance, signed up for Agility themselves and also sold it to several of their client weeks before Katrina struck. One of those clients was awarded a $5,000,000 contract the day after Agility returned their business to function – a contract that they would have lost if they had not been available to answer their phones.

Of course, it’s good business for Agility to have their clients selling their products to their clients. “It’s partly a math thing,” smiles Boyd ruefully. But the “math thing” means geometric growth for the company, which Boyd expects to become a half-a-billion dollar company in five to ten years.

The math thing works like this: Each of Boyd’s twenty salespeople expects to sell $1,000 a month this year. In the first month of the year, that’s $20,000 revenue for the company. Because clients pay a monthly premium, in the second month the company will receive that same $20,000 in revenue from the accounts that were sold in the previous month, plus they will receive another $20,000 from new accounts: so in the second month the revenue is $40,000. In the third month, they receive the same $40,000 plus another $20,000 from new accounts. And so on.

At the end of the year, they have grossed $1,560,000 from accounts sold that year. In the second year, they will bill $2,880,000 from the previous year’s sales, plus another $1,560,000 from the new year’s sales.

Then you add in that, for every $200 sale to an insurance company or CPA firm or attorney, that client likely becomes an additional “salesperson” for the company, directing another two, three, or twenty clients a month to the company.

And, unlike true insurance companies, a covered event on the part of a client does not represent an expense to Agility. Rather, Agility tallies the bill for the use of resources – shipping and set-up costs, rentals, etc. – adds 8 percent to cover their expenses in organizing and handling the recovery process, and hands the bill to the client. Extra clients represent almost pure extra profit.

“People think I’m crazy when I say this,” says Boyd. “But it’s almost inconceivable that in five to ten years Agility wouldn’t be worth half a billion dollars. I just don’t see how that could happen.”

 

Crazy

Of course, he’s been called crazy before. It seemed insanity, for instance, to pursue a market that could afford only $200 a month when Fortune 5000 companies were willing to pay hundreds of thousands of dollars a month. But, he points out, the trouble with the Fortune 5000 is that there are only 5000 of them. That can make the competition for their business pretty fierce.

Besides, it was exactly Boyd’s brand of insanity that the owners of Agility were looking for when they hired him. They had purchased the company from GE in 2001 – right after 9-11 not coincidentally – and had been disappointed with its sluggish growth.

Boyd had already proven himself quite handy at perking up sagging companies. He had gotten his start working with his father, Bill Boyd, at Bill’s Muzak franchise here in Charlotte. Using the skills he learned through his father’s very successful franchise, he went to work at the Muzak headquarters, revitalizing and helping update the company’s image – and sales. When he arrived at Muzak headquarters, it had 5,000 clients in its Marketing on Hold division called Voice. When he left it had 80,000 clients.

The principals at Generation Partners were impressed. When Generation asked him to come talk to them about Agility, Boyd said, “I didn’t know anything about the business. I didn’t know anything about disaster recovery plans. I didn’t even know they existed!” But he was so enthralled by the idea that he began work immediately, building out a team and, among other things, bringing his father on as chairman of the board.

“There aren’t very many times people get the chance or want to work with their father,” says Boyd. “But this is now the third time I’ve worked with him. He is by far the best visionary, communicator, motivator, and salesman that I’ve ever run across in my life. Those are all skills we need and I don’t have any of them.”

Boyd’s skill runs along the lines of taking crazy ideas and making them work.

Like this business of bringing disaster recovery resources to small companies. Unlike the Fortune 5000 companies whose sheer size means great complexity and ensures that they will experience disasters of various scales during the course of their business, and that at least some of those disasters will require significant resources to rectify, most small companies will not experience business interruptions and even those that do require far fewer resources in order to recover. Additionally, their recovery plan can be quite simple and easy to organize. So it occurred to Boyd that since they already had the equipment and infrastructure to service those companies, they could afford to offer them for a very small fee.

So far, it has worked out handsomely. The company is ahead of its sales and revenue goals for the year, and their small business clients are incredibly happy. And the timing couldn’t have been better for those affected by the busy storm season.

The names on Boyd’s white board on October 26 are the lucky ones. These are the company owners and managers whose businesses will be up and running again within hours, thanks to Agility. Their employees will have a place to come to work within the week. These are the companies that will probably still be businesses in two years.

Boyd makes a note above a name on the board, erases something next to another. The result of the frequent scribbling and erasing reminds one of the strategic notations of a general preparing for battle. But while Boyd’s unornamented office might look like a war room, to their clients Agility looks like a miracle.

 

Heather Head is a Charlotte-based freelance writer.
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