Vanco sets sights on Infonet
Intends to overtake rival 'in next four years'
Allen Timpany, CEO and founder of wide area network services firm Vanco, is counting on impressive growth over the next few years. To achieve its ambitious targets, Vanco will need to maintain good relations with carriers while growing its list of sales partners.
Vanco CEO Allen Timpany says that he expects to overtake closest rival Infonet Services in the next four years. These are bold claims. UK-based Vanco, which differentiates itself by working as a carrier-independent network service provider, has succeeded in growing revenue at a compound annual growth rate of 45 per cent over the past 10 years. But Vanco has a long way to go before its revenues reach a par with Infonet. Vanco's FY2003 revenue came in at £:52.9m ($95.2m), compared to Infonet's $654m.
Nevertheless, there are strong grounds to believe that over the next few years Vanco will present a significant challenge to its carrier-owned rivals. Vanco claims its managed WAN services are between 10 per cent and 25 per cent cheaper for clients because the company has the ability to change carrier providers throughout the life of a contract, a useful cost-reduction tool, particularly in a market where bandwidth prices are continuously falling.
The only barrier to Vanco maintaining its growth levels is its size. Unlike telecoms carriers that invest heavily in infrastructure to build global networks, Vanco instead is very labor-intensive, relying on its relationships with carriers, from which it can buy capacity to build its global networks for clients. The company also needs to grow its partners in order to keep sales growth on its current trajectory.
Vanco seems to have done well on the first point. The past year has seen a raft of senior executives move to Vanco from Equant, Energis, and Bell Atlantic, clearly part of Mr Timpany's strategy to build the relationships he needs to expand the company's nascent US operations, and expand European and Asian coverage. Nevertheless, the company is still small in comparison to the carrier-owned service providers and systems integrators with which it shares the market.
Strategic partners seem to be a bit more difficult to come by. So far all of Vanco's systems integrator partnerships relate to single client contracts. For example, a recent systems integrator "partnership", rumoured to be with AtosOrigin, has just been announced as the companies jointly embark on separate outsourcing contracts for two unnamed clients.