Greg Hough, CEO of zthernet talks about bringing enterprise IT capabilities to small and medium business.
Please excuse any typos in this hasty transcript.
Jay Curry: And we’re back. Hello Texas. Welcome back to Texas Business Radio. Got a great program. We’re having some fun, and this segment is going to be a classic example of learning some new technologies. If you listen to the show at all, you know that Matt, and I, and George are big fans of do what brings revenue, do what you can leverage your competitive advantage on, and get the heck out of these other businesses. For example, technology. You know you’re not going to train your technology person every 18 months because the entire systems change every 18 months. You got to retrain them from scratch. You’re not going to do that, so what you do is you go get a good outsourced IT company, and we have one right here in the studio.
It’s going to be interesting, but before we get started let me remind you that Texasbusinessradio.com is the one-stop place to find out everything about us. We have all the videos of all of our interviews, the sponsors, the hosts, the guests, everything’s there. Texasbusinessradio.com. We also monitor #TBR if you want to send us a tweet, and, of course, we have our famous 24-hour hotline that Matt has right by his bed. He checks it all night long, 744, make that 844-814-8144. I’ll tell you again because I want you to call him and get that question in so we can get it on the air for you. 844-814-8144. So there you go, Texas Business Radio.
We have in the studio Greg Hough, CEO of Zthernet. I just love that title. This is a very unique outsourcing business. I love the model because I think it really provides the opportunity for not perfection but much closer to high-quality services. Greg, thanks for joining us.
Greg Hough: No, thank you. I appreciate it.
Jay Curry: So tell us what Znet, Zneth-
Greg Hough: Zthernet.
Jay Curry: Zthernet.
Greg Hough: Absolutely.
Jay Curry: Love it. Zthernet. What is Zthernet all about?
Greg Hough: We’re all about bringing enterprise IT capability directly to the small to medium business. There’s a million and one ways that you can spend a dollar every day on your IT infrastructure.
Jay Curry: Yeah.
Greg Hough: But at the end of the day, that’s the really what your business is about for the vast majority of our customers. What we do is we spend all the time professionally engineering, developing, and putting together the systems that our customers need the way that it should be built, and then letting them jump on board, and delivering them a higher quality, that sleep-well-at-night solution that they’re looking for.
Jay Curry: And the way you do that is rather unique, at least from the other firms I’ve talked to. Tell us a little bit about what’s the magic sauce.
Greg Hough: Sure. So at the end of the day, when you look at your IT infrastructure, you got a couple of key components. One of those is a person, and it’s always a key conversation, but as you discussed before, it changes so much. What’s the challenge for a really good IT guy to work at a small business, I mean that’s one of the first things that we run into.
Jay Curry: Yeah, because in about 18 months they’re going to be outdated, right?
Greg Hough: Well, not only are they going to be outdated, but if they’re good enough to want to keep up, they’re always going to want to increase their budget and make more money, and I’m not 100% sure that your business is designed to be an IT hotbed, if you will.
Jay Curry: Right.
Greg Hough: So really at the end of the day, there’s a big piece of our business and it’s just that we attract and retain really good IT talent. There’s a lot of IT outsourcing companies that do that, but that’s not where we stop. When you look at the other pieces of your IT infrastructure, you think about your network. You got a local area network, which is your Wi-Fi, and your ethernet switching, and all that stuff. You got a wide area network, which is, for most small businesses, sort of a Comcast cable connection or maybe you got some AT&T service, and I hope there’s a firewall in there and that someone’s looked at it recently, and I think there’s a router, right? Then you got a server, and that server may be, in this day and age, an app that’s somewhere out there on the internet, but for a lot of small businesses, that server is QuickBooks sitting on a old computer that you’re not sure how old it is. I think it’s in the coffee room, or in the broom closet, or something along those lines.
Jay Curry: And they have a backup system that works really good.
Greg Hough: Oh, absolutely.
Jay Curry: Right? They never check it. They don’t know that it quit working six months ago.
Greg Hough: True, and so those are the things, the challenges that we see, and a lot of other … The industry uses the term Managed Service Provider, or MSP, and they’re doing just that. They’re managing services. They’re juggling balls. I know who does your voice, and I know who does your internet connection, and I know where your server is. We take a different approach. We become all of those things. We’re a one-stop-shop. We sit back and look at what your business needs are, what applications need to sit where, and then we leverage the infrastructure we’ve built. We operate our own server farms in our data centers.
We are a wholesale wide area network provider just like an AT&T, a Verizon, a Comcast, a Charter, or any of those guys. We buy wholesale from them connectivity, and then we provide our customers our best practices, best-of-breed routers, Wi-Fi, switches, firewalls, so that they’re the same across the board so that we can ensure that you’re constantly getting the updates that you need. Really, once we’ve put all of those pieces together, we’ve engineered all of that, and we know that works, and you’ve got a good, stable foundation, some very interesting things begin to happen. One is you sleep a little better at night, but most of our customers, when we first take them over, average about three trouble tickets per user per month. Right?
Jay Curry: Three-
Greg Hough: Three trouble tickets.
Jay Curry: … trouble tickets.
Greg Hough: Per user per month. The average person has three problems every month. When we get the infrastructure right, that number drops tremendously to most of our customers average about one trouble ticket every two months.
Jay Curry: Huge difference.
Greg Hough: Huge difference, not just from a conversation of it’s better, but imagine how much more productive those people are? Now, there’s a flywheel of getting all this stuff right as well, because if your managed service provider is answering three trouble tickets per user per month, they’ve got to have enough people just to answer the phone. If we’ve got less trouble tickets, we’re more responsive. We talk about all this really cool industry stuff that we do about server farms, and Wi-Fi, and routers, and my customer’s eyes glaze over. I always tell my guys every day that we meet, we do three things for our customer. We answer the phone, we fix it the same day, and you have less trouble tickets. All of that starts with getting the infrastructure right.
That’s why we really market ourselves, or we really tell our customers, we’re an IT infrastructure as a service business. We don’t come in and say, “You need to buy this or buy that.” We do it all as a flat-rated fee, bundle it all together, and give you one IT cost that you can count on so that your business can grow without having to budget for that new server upgrade, without having to think, “What happens if that switch blows up? What if some new technology comes out?” We’re standing right by, and we keep those rates really flat and steady, and we’re doing less work. Customers that are on our infrastructure are doing less work.
Jay Curry: Win-win.
Greg Hough: And we pass that back to them. We think that we’re somewhere between, at any given point in time, 40 to 60% below market on a monthly recurring cost structure from what other guys that are trying to juggle all the moving pieces are.
Jay Curry: This sounds a little bit, an analogy that I would make to Southwest Airlines. They fly the same plane so everybody knows how to maintain. They put in quality parts, obviously, but it’s all consistent and therefore they have less problems.
Greg Hough: Absolutely. Right? All those things about trying to get everyone on the plane and all the stuff that they solved for that everyone else seemed to miss, that really is what we focus on. We focus on efficiency and getting it right.
Jay Curry: Now, you don’t really care what their software is, right? You’re-
Greg Hough: Nope, we-
Jay Curry: Really unbiased. Whatever it is, you take it over.
Greg Hough: They got it. We’ve got customers that sort of span across a very wide range. We have customers that are in the retail space that are selling lawn equipment and tractors, and we have doctor’s offices that are orthopedic surgeons and heart specialists, but at the end of the day, their needs are very similar because when that phone rings they better be able to get a good, quality phone call. When they send that email they need to know it goes through. Wherever data they have, they need to make sure that they have access to it in a timely manner and that it’s properly backed up.
Jay Curry: Now, one of the big concerns people have is all this stuff going on with Russian, and ransomware, and hacking. It’s got to be your specialty, to keep ahead of that. Tell us a little bit about that.
Greg Hough: Security is always a huge deal. In fact, most of our customers, a big piece of our platform that we really focus on is really on private network, not public network, which is the first level of security. If it doesn’t need to on the internet, let’s not put it out there in the first place. It’s less expensive more often than not, and it’s more reliable, and it’s faster. It’s a better way to go, but you kind of got to be a wholesale carrier in order to play in that space and understand how to work it. Beyond that in the technology discussion, and you and I discussed before, it’s an arms race. As soon is someone puts out a new antivirus it’s almost like a challenge to some hacker to come in and try to figure out how to get it.
Jay Curry: Busiest day of the quarter is when Microsoft puts out a new release and all over the world they start cutting it into pieces.
Greg Hough: How do we get into it, right?
Jay Curry: Yes.
Greg Hough: So really, this is a prevention conversation, and backups are the key, that no matter what’s going on, if you’ve got a good copy of the backup, let them lock your stuff down. We can restore it for you.
Jay Curry: I love it. Folks, we’re talking to Greg Hough who’s the CEO of Zthernet, and you’re located all over Texas, in LA, so I don’t care where you are. If you’re hearing this, he can help you. How would somebody learn more, Greg?
Greg Hough: Best way to go is to go to www.zthernet.com. You can contact us there or give me a call in my office. We’re not so big a business we don’t take phone calls. My number’s listed there as well.
Jay Curry: Okay. You got it. Thank you so much. Great story.
Greg Hough: I appreciate it.
Jay Curry: All right folks, we’re going to have to go pay a couple of bills. We’re going to get another specialist in here. We’re going to have some fun, so don’t you go anywhere. We’re going to be right back.
Sponsored in part by:
Jay W. Curry
Along with hosting “Texas Business Radio”, Jay is a Professional Certified Coach and Master Chair facilitating four Houston-based Vistage peer groups. In addition to being a best selling non-fiction author, the 2015 release of his award winning novel, Nixon and Dovey: the Legend Returns, adds novelist to his title. Jay holds a BS in Mathematics from Oklahoma State and an MS in Computer Science from Kansas State. You can learn more about Jay HERE.