NeoNova® Network Services
March 18, 2013 Issue
The Most Powerful Name In Corporate News and Information
NeoNova® Network Services as a premier Google Reseller providing 24/7 Service and Support is empowering their ISP and Telco Partners with 21st Century Cloud-Based Technologies that enable them to Move their Customers to the Cloud
About NeoNova® Network Services:
NeoNova is a company that
empowers customers with 21st century cloud-based technologies. We help
service providers and businesses grow by delivering a wide array of
subscriber, network management, and professional services leveraged by a
powerful service delivery platform and backed by the industry’s top
professionals. NeoNova also is an authorized premier reseller of the Google
Apps™ and Google Apps for Business™ suite of communication tools.
Ray Carey is Chief Executive Officer at NeoNova Network Services. He has been involved for the last 10 years with the leading companies providing technology and solutions to the broadband market. In early 2008, while at Azure, he led the investment in NeoNova and has been on the board and actively involved with the company since that time. While at Azure Capital Partners he was also involved with leading companies in the broadband market including Broadlight, Calix Networks, Cyan Optics, Vapps, Inc. and World Wide Packets.
Ray remains a Venture Partner with Azure Capital Partners where he was an investing partner for the last decade. Prior to Azure, he worked at Credit Suisse First Boston & Robertson Stephens focused on public and private financings and mergers and acquisitions for communications related technology companies. He provided strategic advice to several companies including ADC Telecommunications, Cerent (acquired by Cisco), Cyras Systems (acquired by Ciena), Efficient Networks (acquired by Siemens), Juniper Networks, Next Level Communications, Siara Systems (acquired by Redback Networks), Zhone Technologies and many others.
Ray represented the United States by swimming in the 1996 Olympic Games in Atlanta, Georgia and received his A.B. and M.A. degrees from Stanford University.
Morrisville, North Carolina 27560
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – March 18, 2013
Mr. Carey: We are a cloud services broker. We help our customers, who are our partners, bring their customers to the cloud. We work on both the consumer side as well as the business side with ISPs and technology resellers. We help them establish relationships and migrate their data and their business processes to cloud applications like Google. In fact, we are a premier Google reseller. Then, we support our partners and their end customers every hour of every day of the year.
CEOCFO: What are the range of services you offer as far as geographic range and specific companies?
Mr. Carey: Primarily, we partner with Internet service providers, technology resellers, and dealers. We are national in scope, so we have customers from the Aleutian Islands in Alaska down to Key West, and from Maine to Southern California. Some examples of specific companies are our partners Adak Telephone in Alaska and Engage Communications in Key West. Both are ISPs where we have brought their operations and their end user applications to the cloud. We also provide support to their end customers. We currently have business in thirty states, and we are expanding constantly. Conversions are not limited to any size or region, and we do the heavy lifting for our customers to ensure success and minimize end-user impact. On the application side, we have a relationship with Google, so we can help end customers take advantage of the extensive features of the Google Apps productivity suite. It starts with Gmail and Calendar and Docs but, as you know, it’s much broader than that. We are also in the file storage and the data backup and recovery market with Google Drive, as well as with a VMWare platform for virtualizing servers, cloud storage, and disaster recovery. Whether an end customer wants to migrate their internal application suite to the cloud, or if they just want a maintenance-free backup solution to their existing systems, we can do that. Bottom line, we want to let them use their closet for their coats, not their servers, while we take that entire IT stack and securely and quickly migrate it to the cloud.
CEOCFO: How does it break down into the different segments? Do you have a preference in who you work with or the types of services that you either like to provide or find more challenging or more lucrative?
Mr. Carey: I would say that we are really customer driven, so we focus on putting together an application package that works for the end customer. At our core, we are really a service business. We work with guys like Google, Rackspace, and other cloud partners, and we sit between them and end customers. First, we work to truly understand the needs of the end customer. Then, we take a base package of services from a provider and add high-touch migration from existing systems and change management training. Finally, we provide ongoing training and 24x7x365 support for that customer forever. Instead of the high upfront consulting model so often seen, we go to market with low upfront costs and reasonable monthly recurring fees. What we really want to do is make sure that end customers are getting the service, the handholding, and the education they need to take advantage of all the benefits of the cloud. If used correctly, the services we provide can help our customers by making their products “stickier,” giving them a robust suite of tools to help them retain their existing end users. We have discovered through years of experience that without a significant amount of work on provisioning, data migration, training, and support, end customers may not use cloud services to their full potential. Someone who leans heavily on us for services is a great customer because they are really getting what they paid for. We help them use the cloud to transform and grow their business.
CEOCFO: It seems everybody is working in the cloud these days in some form or another. What is the competitive landscape for NeoNova?
Mr. Carey: Yeah, everybody is working in the cloud. Business and residential users are increasingly turning to cloud computing and storage solutions for their flexibility, utility-based pricing, and ease of use. For ISPs, the cloud offers the ability to move away from simply delivering a high-speed pipe to offering new applications and potentially creating new revenue streams, and we have a couple of different verticals that we have been focused on for a long time. Currently, we do business with more than 100 rural telephone companies and have added 19 new relationships last year and a similar number the year before. In this space, we do not have a significant number of competitors. In the small business market where we work through our channel partners and our ISPs, those small businesses have a lot of options to go to the cloud and to migrate to the cloud, but what we found is that they usually only have two or three trusted partnerships at best. It may be with the company who provides the bandwidth, it may be with one who sold them their phones, and it may be with an IT expert that they have available. We are partnering with the providers who have built those trusted relationships. We are a white-label company, meaning that the NeoNova brand really does not show up in a lot of places. We think that for small businesses, particularly in cities outside of the main tech hubs in Silicon Valley, Austin, and Boston, those small businesses in the non-tech vertical want to buy these solutions from their trusted partners. We want to make sure that those trusted partners have the expertise, the skills, and the products that they need. What is really at the centerpiece of our strategy is we think that small businesses want to buy local and they want to buy from their trusted partners, but they also want to know that those trusted partners have an organization behind them that has 24/7 deep service and support capabilities that maybe those local providers may not have themselves.
CEOCFO: Can you tell me a little bit more about the rural market, in general, for telecom and for other kinds of services? Many people do not realize the size and depth.
Mr. Carey: There are six million Americans who get their service from phone companies that most people have never heard of. These are outside of the footprints of AT&T and Verizon and other large telecommunications companies. There are about 800 cooperative and privately-owned telephone companies in the United States. It is probably three to four percent of the country’s overall communication services footprint, but about 40 percent of the land mass. There are a lot of challenges for these historical telephone companies. These companies made a major transition over the last 20 years. They are mostly 60 to 80 year-old companies, and they have transitioned from being just telephone companies to becoming broadband companies. We help them move from being merely bandwidth providers to becoming cloud service providers in the eyes of their customers. For them, step one was about getting the lines out to their customers on the telephone side. Step two was turning those lines into Internet lines via DSL or fiber to the home. Step three, which is where we come in, is to actually start selling the stuff that comes through that Internet pipeline. We think there is another great revolution happening. There was the bandwidth infrastructure revolution that really started in the mid ‘90s. Now, there is a new revolution around what is being sent through that infrastructure. We are poised to help our customers be major parts of that revolution.
CEOCFO: You have talked about service and customer service. Can you give me an example of what you do that might be over and above, and particularly how you “hand-hold” the customers as you mentioned?
Mr. Carey: We really have two customers at the end of the day. We have our partners, who are our direct customers, and then we have their customers, whom we refer to as the “end customers.” At the core, when we bring on a new relationship, we are first migrating the telco or partner’s internal operations before we even start selling together to their end customers. We have dedicated project managers, we have dedicated customer advocates, we have dedicated channel managers, so everyone who partners with NeoNova has live people dedicated to them, people they can get to know and be comfortable with; someone that they can sit and talk to. When we migrate them to the cloud, we have an entire team and a two hundred step process that we walk through to get them migrated and prepared. Our partners do not see most of that process of course. We manage all that heavy lifting behind the scenes. We take extra care with partner onboarding because if they are the best users of the cloud themselves, their end customers will be the best users of the cloud. That is why we take our partner migration process very seriously. At the end customer level, one of the things I think cloud providers get wrong is they think their job is simply about getting technology in front of people. We believe the key is to make sure people know how to use the technology they have bought so they get the most benefit from it, and then support it fully. We support a broad range of cloud technologies, and we do not stop at “Is this working?” Our question is not simply “Is our service working?” We ask, “Does the end customer know how to use it?” It is not enough that they have the technology. They need to be getting the most benefit from it. An example: People may call up some other underlying providers, and the first question those providers will ask is “What is broken about the service?” They are prepared to support IT professionals but not end users. Often, they will not even take calls from end users. We are offering services that rarely if ever “break” in the traditional sense. So, our questions are often much more specific, like “How do I get Gmail to work on my phone?” Most providers are not prepared to answer questions like that. They may send you to a web page, but they will not take that call themselves. We will take that phone call from the end user and teach them how to use the product. Anyone in a customer’s organization can call us anytime. We do not ask them what their pass phrase is, we answer the phone 24/7, we look at the emails 24/7, and anyone in an organization can ask us anything about their cloud services. We really are taking over a lot of the support calls that distract IT professionals from their work, and we’re bundling that in. We help “Average Joe” users adopt our services. You do not have to be a tech expert to bring your business into the cloud.
CEOCFO: How do you reach potential customers?
Mr. Carey: We reach customers through our partners, who are local businesses that interact with customers directly. As I said, I believe you can do a lot remotely with technology. We do all of our deployments remotely, and we are heavy users of automation. The cloud allows you to move a lot of things to an e-commerce-like delivery model, but I do not believe that you can build the sales relationship and the trust relationship that way; you cannot stuff that into the pipe. At the end of the day, we partner with customers to help them adopt the cloud and make their businesses better. Whether it is an Internet service provider in Texas; a telephone company in Adak, Alaska; a reseller in Charlotte, North Carolina; or a bandwidth broker in Saint Louis, all of those folks have trusted relationships with their end customers. Those are the folks that we partner with, that we share revenue with, that we provide our wholesale business to so that they can both improve their own businesses and also bring these advanced services to their end customers. And they can do it all without investing in a lot of expertise, processes, and provider relationships. We take care of all of that for them at NeoNova.
CEOCFO: How is business these days?
Mr. Carey: It is great! We ended up with an excellent 2012. We were up in 2011, too. We increased staff by about 25% at NeoNova last year, and we expect to do that again this year. We are busy! There is a big wave in cloud adoption, it is going to radically change how small businesses consume technology, and it’s gaining momentum. People will be able to hang even more coats in their old server closets at the end of 2013 than they did last year.
CEOCFO: What do you bring to the table from your past business experience that is most helpful at NeoNova? What did you learn in the Olympics that helps you here as well?
Mr. Carey: I have not been asked that question in a while! On the business experience side, for twelve years before being at NeoNova I was an investing partner at Azure Capital Partners, and I got to work with some of the most successful CEOs and CFOs in Silicon Valley. When I took this job, I packed up my family and we moved from Silicon Valley to Raleigh, North Carolina. That migration really parallels what we are doing at the heart of NeoNova. Silicon Valley is incredibly powerful at inventing new things, but Silicon Valley and most large tech companies are not known for their customer service. In a place like Raleigh, we have employees that will stick with us for 10, 12, 15 years or more, which resonates with our ISP partners who tell us that they have lots of people who have been with them for 40 years. That is different from most tech companies in Silicon Valley. Here at NeoNova, we realize you do not just build relationships with companies. You build them with the people at those companies. We are really trying to take the best of Silicon Valley and put a “North Carolina, high-touch service, longevity of employee” kind of stamp on it. I learned a lot about innovation in the Valley. I am learning a lot about what it means to be a great family-focused and service-focused company here in North Carolina. We are trying to blend the best of both worlds. I was really fortunate as a venture capitalist to work with and to watch dozens and dozens of phenomenal CEOs, and I am taking the lessons that I learned and applying them here at NeoNova. On the Olympics side, one thing I learned is that The Summer Games were the end of a very, very long-term journey. We are on a very long-term journey here at NeoNova, too, and there is a lot of work that goes in every single day before they shoot off the starter’s gun in front of the bright lights and the TV cameras. My whole swimming career taught me the benefit of hard work. It also taught me that I was only able to accomplish some great things because of the help of other people, like the many folks we have working here at NeoNova. The last thing that swimming taught me was how to break large challenges down into their component parts. I remember saying, “I could not possibly swim that time for four laps! But, could I swim it for one lap?” A lot of what we do here at NeoNova is to take complex problems, break them down to their pieces, and then get better at those little pieces one at a time. That is something that comes directly from my swimming career.
CEOCFO: Our readers are primarily in the business and investment community; looking for ideas, looking for partners, looking for services. Why should people pay attention to NeoNova? What makes you a special company?
At the end of the day, what makes us a special company are
the people that we have here at NeoNova. We have a phenomenal team here. We
are also in a phenomenal growth sector. If you look back 20 years ago, most
small businesses were not connected to the Internet, and that changed over
the course of that time. Now, you might say that many small businesses would
not exist without the Internet. Well, twenty years from now, no small
business is going to exist without having adopted cloud technologies. They
are not going to have a closet in the back full of servers anymore. The
entire computing business has changed. We have the right people in the right
place in the market to build a high growth and really exciting company.
“You do not have to be a tech expert to bring your business into the cloud.”- Ray Carey
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