Mark Green: How many clients/customers does New Age Technologies training and Argentum IT services have, and what is their range in size?
Charles Hagerty: We have around 200 corporate accounts. At any one time, probably 40 are active. New Age Technologies works more with Fortune 5000 companies, so those tend to be much larger projects, and the clients typically manage the projects. Argentum tends to go after smaller clients who want us to take more control of the project, and they often also need us to manage the systems once they are in place.
The training business is a national footprint. We’ve trained tens of thousands of students over the years. We at one point were going all over the world for some vendors, training other companies how to do the training. But that industry has changed a lot, so I’m retooling and remodeling the training business right now.
MG: What skills are you training your customers to do?
CH: Most are vendor-authorized training, and most of it is geared around infrastructure, security, data storage, the advanced skills on how to build enterprise-quality infrastructure and networks for corporations, technologies like VMware, Microsoft, EMC, NetApp. There are about 30 vendors and several thousand classes. Some classes we teach ourselves and some we bring in instructors from anywhere in the country; we’re in a network of companies connected to 70 training sites around the country, and we have a videoconferencing system.
MG: Why do they hire you rather than the vendor doing the training themselves?
CH: Vendors tend to not be in all geographical markets, and a lot of vendors outsource their training. They don’t want to be a training company. And then we can also blend: We can be talking about VMware and bring NetApp storage or EMC storage into the conversation and talk about integrated mobile technologies. If you’re only being taught by the vendor, you’re not going to get that angle.
MG: How many employees do you have?
CH: Currently we’re just under 100. With the nature of our projects, it can go up and down quickly. We’ve fluctuated mostly between 95 and 125. In 2008-09, which were very tough years, we were down to 66.
MG: You are the second largest IT employer in state. Where have you found candidates? Are Kentucky and Greater Louisville producing enough trained IT workers?
CH: We recruit regionally and, if necessary, nationally, to find talent; we start local and work out. Countrywide, there’s a shortage of good IT talent. Think through the dynamics of the economy and what has happened in the IT industry: Around 2000, you had the dot-com bubble burst, which was devastating to a lot of IT companies and the employees who worked for them. A lot of kids going to college then shied away from IT because it was a disaster. Then you had a recession, so jobs were hard to get. Then you had a trend where a lot of larger companies started sending development work and IT work to India and other offshore countries. Opportunities in IT really were shrinking, and a lot of kids – a whole generation – really didn’t focus on IT as a career path.
And 2008-09 didn’t help when that recession hit. Now, as the economy’s been gradually coming back, a lot of companies that went offshore found it’s not the mecca they thought, so they’re trying to bring work back to the United States. You have companies bringing in H-1B visa workers. We have a combination of growth in the economy, the adoption of technology, the internet’s expansion of how technology can be applied to businesses or homes that’s increased demand, and the supply of IT workers has not kept up.
Louisville has done more than most cities. With Code Louisville they’re helping career changers and millennial kids develop basic coding skills and techniques. That is extremely helpful. Those people are going to be the leaders in this industry a couple decades from now. But entry-level jobs aren’t where the shortage is – the skilled, experienced people are very difficult to find because of the dynamics of what’s happened the last decade.
MG: What are your revenues?
CH: We range between $8 million and $12 million. The IT work for Fortune 5000s is where that swing comes in. Right now we’re a little bit down; we’re a little under $10 million, because of changes in the training industry.
MG: What categories of IT training are most in demand?
CH: A lot of the work is how to build out your basic infrastructure: how to build a Microsoft server, how to build a virtual network, put security around it, how to administer and manage that. There are two things: One is, you focus on the engineering/design aspects so systems are built correctly. Then, two, what skills do you need to manage it on a day-to-day basis; that’s the people and process. The people have to learn the process and the skills it takes to manage those systems, and there’s a lot to it. Some you learn from experience, but there’s a lot you can learn in the classroom.
There are YouTube videos, and a lot of vendors now are coming out with self-paced computer-based training; those are great tools to develop your skills. In an instructor-led class you can bring your advanced issues and challenges to your instructors. In class we can answer specific questions on the challenges they’re facing. And a lot of times there’s more than one right answer. That’s what people don’t realize: There are best practices, but just like there’s more than one way to build a building, there’s more than one way to build a system.
MG: Has the process you train for remained much the same or has technology greatly changed things?
CH: There have been significant changes. The tool sets have improved, and things like server virtualization now exist. When I got into this, the internet wasn’t as big as today. Software architecture and capabilities have changed. Facebook didn’t exist; Google didn’t exist; Amazon didn’t exist. You didn’t have the connectivity options. The first system we put in that we could remotely manage and fix without having to go on-site used dial-up modems. Now you’ve got high-speed internet connections – not enough of them, but still. The way you architect a system with the internet in mind and security issues in mind, is definitely different than it used to be.
On top of that, virtualization and implementation of cloud computing have really changed the dynamic. It used to be if you ran a system, you bought a computer, installed the software and ran it somewhere in your office, or maybe in a data center but you had to have dedicated circuits to it. Today, you can license your business operations software out of the cloud. You can build it yourself still, and lots of people still do for business reasons, but for lots of others it makes more sense to access it through the cloud. There are still a lot of things that could be done incorrectly that could jeopardize those systems, so clients come to us, and we give them advice on how to best utilize the available tools, whether on-site or in the cloud.
MG: We entered 2016 with information security listed as one of the top challenges for CEOs, but the problem seems to have only worsened. Is that the opinion of IT professionals?
CH: Yes and no. Originally, only big corporations had computer systems and networks, and they were private. The security threats were more internal – things like systems breaking, human error, a disgruntled employee. Those were real threats just as damaging as anything a hacker on the internet could do, and all those threats are still there. In fact, some of the biggest disasters I’ve seen the last five years were created from an internal employee – some intentional, some accidental, but they were not threats from the outside. But it doesn’t get as much publicity when somebody makes a mistake and loses all the company’s data, and nobody was paying attention to the backups and they weren’t there when they went to grab them.
With the internet and connectivity that has grown more and more pervasive, now people all over the world can see your systems. That definitely has grown into a bigger threat than it used to be, but it’s manageable. It’s just that people have to learn the hard way that it has to be a high priority, versus waiting for the disaster to hit.
MG: Regarding outside threats, what is the difference in threat levels for small, medium and large businesses? Do small businesses have as much concern?
CH: It comes down to how critical is that system and that data to their business, and what is the cost if they lose those systems? A Humana or a Yum! Brands or most Fortune 500 or 5000 companies that lost their IT systems would have to shut their doors until they got them back up. Small companies are in that same boat. It may not be on the same scale, but to that owner and those employees who want to keep their jobs, it’s every bit as important and critical.
The threats are real because the viruses, the attacks, are coming to everybody. A lot of small companies have called me over the last few years who had that encrypto virus. They’ve got the ransomware and said, “Hey, my system’s all locked up; some guy wants money to give them back to me.” And we have to go in and recover them. I hate to say it, but that’s how we get some of our best customers. If something like that happens, then they understand the priorities. I would love it if I could get those guys to work with us before that happens, but that’s human nature.
Large companies might become the target of the day for a denial-of-service attack, and there may not be much interest to shut down XYZ Plumbing for denial of service. That threat is probably greater for public companies who they would get more publicity for if they attack that company versus a no-name company.
MG: We hear the primary threat vector today is highly targeted, spoofed email. Is this true for Kentucky businesses?
CH: As the tools to stop viruses and other threats became more sophisticated and better at preventing outside attacks from getting inside the network, one of the things attackers realized was the weakest link is the human factor. So “social engineering” types of attacks are a threat for all companies. Multiple customers have called us and said, “An employee clicked on this link thinking that it was an email from the CEO…” and all of a sudden they’re having an issue. The key is, with the proper tools you can still prevent a lot of that, and with the proper network design you can limit the damage an attack can do. That’s where making sure the person putting the system together knows what they’re doing can have a real impact. The issue is educating your employees on how to recognize those types of attacks and making sure the processes are in place – spam filtering and antiviruses, too – so that email may never even get to the targeted individual. You have to have multiple ways of protecting the business, but you also have to address that human factor.
MG: What day-to-day IT issues do businesses bring to Argentum/New Age Technologies most often?
CH: They’re looking for ways to manage: They’re having problems with their systems; they need to upgrade, or they’re running poorly; or they’ve had attacks or whatever; or they’re just looking for some ways to improve the efficiency and performance of the company. That’s at the Argentum side. We can come in and be their CIO, help them put together strategic plans, help them identify budgets, and come up with ways to solve whatever problems they’re trying to address.
The larger Fortune 5000 companies are different. They need to scale up quickly for an IT rollout that might be nationwide, or they need 10 or 15 developers for a six-month or a one-year software project and don’t want to hire staff and then lay those people off. We have those people available or in our database where we can get them on-site quickly.
A Fortune 5000 company may be very good at fast food or healthcare or insurance but not good maybe at managing a help desk or a part of their IT operation. Some of them come to us and we manage that operation for them because we do it every day for multiple businesses. Some employees are so good at what they do and can get it done in a fraction of the time as anybody else. We have people who know how to get it done very quickly and very efficiently.
MG: What is the key question a business should ask its current or prospective IT provider about protecting its data and network?
CH: The key question to ask is, what experience do you have working with companies of similar size and of similar needs as your business? And really question do they have the skill sets, talents and resources available to help you manage your business systems.
One of the reasons I created Argentum was to target small to medium customers. We have clients from four users up to about 1,000 in the Argentum brand, whereas the business model for New Age IT staffing and training really does target the Fortune 5000. We go to market a lot differently for the Fortune 5000 and manage the business differently than we do for the small to medium business.
MG: Business continues to go through a lot of disruption from technological change. Is this going to slow down or accelerate in the next few years?
CH: I hate to say it, but it’s more likely to accelerate. One of the challenges communities have is putting the metropolitan infrastructure in place it takes to support the new capabilities that are developing. If your internet speeds don’t keep up with the data demands, it’s going to limit what companies can do to stay competitive. Additionally, if you keep up with technology news, there is artificial intelligence, the Internet of Things, virtual reality, new cloud-based applications. Your phone systems can be delivered to you now via the cloud in very advanced ways, and over that phone system you can do video conferencing.
Increasing the amount of data being created is also challenging the metropolitan infrastructure. The amount of knowledge these large companies have on you is going to increase: If you’re wearing a piece of clothing that’s tracking of your body temperature, they’ll probably be able to predict what you’re doing and what your needs are. Right now, you shop and buy something on the internet, and they show you the next three products they think you’re going to want to buy. You know the emotional state of that person, because you’re monitoring them. Companies are going to utilize that data; I don’t know how, but I know it’s going to be used.
MG: Should businesses be planning to expand data storage and processing/accessing capabilities, maybe dramatically?
CH: A traditional business, an HVAC company with a customer base they’re servicing, that’s pretty much not going to be utilizing those new technologies; they’re not needing video, not needing to grow data. But innovative companies, in healthcare for example, consumer-oriented companies that are taking advantage of those technologies we mentioned – those technologies inherently are going to generate more and more data. Is that data going to be stored in the cloud for a lot of people to access and data mine? Or is it going to be proprietary for one individual company to keep to themselves and utilize to get an advantage over the competition?
The nature of business in this industry is it tends to go from a lot of innovators, to a very few, to a monopoly which kind of controls the market. That is a challenge not only for regulators and government policies but also for businesspeople to understand: Are they on the leading edge or the bleeding edge, or where are the innovative things they can do to make themselves known in the marketplace?
MG: How does a small- or medium-size business with limited resources determine how much IT capacity it needs, and what investments provide the best, fastest return on investment?
CH: Companies come to us to help do that planning. We must sit down and understand what the vision of the owners is and where they want to take the business, do strategic planning to figure out their vision, then present the strategies and the technology they can implement to implement that vision. There’s no absolute. Some of it comes down to how sophisticated the business owners are at applying technology to solve problems. Sometimes they may have ideas on what they can do, but they don’t know how to implement. They come to us to help get those budgets together and plan it.
If they can’t afford full-time people on-site, we’re available on an as-needed basis. It can significantly lower their ongoing operation cost and free up the resources they have for technology, or for whatever their sales strategies are – an internet-based or a relationship-based sales strategy. There are customer relationship management systems now that are in the cloud, or you can still put them on-site. There are voice-over IP systems that will integrate into those systems. It used to be only a Fortune 5000 company could afford that technology; now it’s quite affordable, and you can access it via the cloud or put it in yourself.
When it comes to the greatest ROI (return on investment), if you’re generating more revenue because you can take care of your customers better, that’s a pretty high ROI.
MG: Cloud computing opens up capabilities that require CEOs and CIOs to let go of full control. What are the key pluses and minuses in using cloud computing?
CH: The key is to really understanding the company behind the cloud offering and are they a good fit for your company and your company’s size? A Fortune 100 company can go to Amazon (Web Services) or Microsoft and leverage a relationship and have a lot of say on how the systems are implemented and managed and what the benefit to their organization is. Those companies wouldn’t come to me and utilize my cloud, because they’d be too big for me. The clients we would serve may have 10, may have 200, may have 300 employees – a peer relationship. Then we can really partner appropriately with them to size that cloud and what services they need, then put in the controls and the management so they have control over how those systems are managed. Then they really get out of that relationship more flexibility, more agility and faster time to market, because now they can deploy those new systems faster and more effectively than they ever could if they were trying to build them in-house. If that same small customer went to Amazon, they might lose control.
MG: What level of adoption of cloud computing are Kentucky companies undertaking, and how does that compare with national averages?
CH: I haven’t read any national averages reports, but Kentucky does have a lot of cloud adoption when it comes to software-as-a-service, things like Salesforce, or QuickBooks online, or Microsoft 365. Those are relatively low-risk. When it comes to the more advanced systems, one of the biggest challenges that has slowed down adoption is the unavailability of good, reliable internet bandwidth in the marketplace – gigabit and ethernet connections that not only are reliable but affordable, that make it possible for companies to move their systems into a cloud infrastructure. That’s been a real problem.
MG: Do you view gigabit service as essential economic infrastructure?
CH: Yes. We also need to be looking ahead to what’s coming next and be ready to implement that, because those are the things that differentiate communities. If you want to attract technology companies and jobs to this marketplace, get that infrastructure in place.
MG: Should we avoid using open public Wi-Fi networks with work-related mobile devices?
CH: Not as long as you’re using best practices, which means if you’re using a VPN, which is a corporate virtual private network, via the firewall that the company has, or the website you’re using is HTTPS, which is a secure internet protocol. As long as you’re accessing internet via secure tools, and the device has proper antivirus and the normal things you would have on a desktop computer, it’s fine.
MG: Is public policy keeping pace with information technology? Are there any steps you would advocate that are not now being taken?
CH: They need to make sure they’re creating a competitive environment for things such as internet access. Net neutrality is a big issue, and there’s a balancing act there because you’re going to really restrain innovation if you put too many conditions and costs on the internet; you’re also going to give a competitive advantage to the large monopolies, or all monopolies, who have financial resources that small businesses can’t compete against. Anything that limits access to the internet needs to be thought through very carefully, because it could really have an impact and be disproportionately hurtful to the economy and to smaller businesses.
The other thing is privacy. A lot of people have given up and say, “Hey, there’s no such thing as privacy anymore. Those large internet companies know everything about you.” I think about voice-activated devices in the home, because while they’re putting safety measures in place I guarantee you a lot of very smart people are going to figure out ways around it. Companies also are going to be mining data, so where do they cross the line from what is public versus what is private? I don’t say I have the answer, but somebody had better be giving a lot of thought to that, because there’s going to be a lot of changes in our society as a result of it.
MG: Do you have any closing comments?
CH: I’d like to make a point to parents and people with young adults and young kids. Whether you’re an artist, a writer, in athletics, or what the kid’s natural inclinations and interests are, introduce them to and get them around technology as much as possible and utilize it in some way, whether it’s art or whatever. For our next generation and generations to come, their comfort level and experience with that technology is going to have an impact on their success. Public schools need to continue to integrate technology into the curriculum and use it as a tool. Not so much teach them how to program – which is great because that almost should be your second language anymore, because almost any job, if you can do a little bit of coding, it’s going to help you do your job better – but kids need to be comfortable utilizing technology because the workforce of tomorrow in some way is going to be involved with using it. ■
Mark Green is executive editor of The Lane Report. He can be reached at [email protected]