TDS (NYSE: TDS) this week renamed its growing Hosted and Managed Services (HMS) subsidiary OneNeck IT Solutions LLC, a move that will house its growing collection of cloud, managed and IT services under one brand.
Building this business did not happen overnight.
Like its larger ILEC brethren CenturyLink (NYSE: CTL) and Verizon (NYSE: VZ), the company had to conduct a number of targeted acquisitions to build this solutions set. Over the past four years, the telco purchased five managed services and IT-related companies: OneNeck IT Services, VISI, TEAM Technologies, Vital Support Systems and MSN Communications.
Each of these deals brought different elements of expertise to the table. VISI and TEAM gave TDS Tier 3 data center capabilities. OneNeck had advanced application hosting, while MSN and Vital Support Systems had IT solution services.
Initially, TDS housed these elements under the Hosted and Managed Services (HMS) banner, but the OneNeck name gives it a more memorable standalone brand identity combined with the financial backing of a larger parent company. The service provider will be able to upsell existing OneNeck customers and others in the portfolio a wider set of solutions through a partner they already know.
Phil LaForge, president and CEO of OneNeck IT Services, admitted that despite the traction it gained over the past year, the lack of one brand caused a bit of confusion for prospective clients.
"We had some success in 2013 by design by putting the strength of all five of the pillars together, but we had been walking into customers and by the time everybody flops down four different kinds of business cards we had to spend time explaining who does what," he said. "From a customer-facing perspective, it's all about the simplicity of approaching the customer."
The new brand is not just about technology and IT solutions alone. It's also about providing a local feel and a focus on customer service.
"Whether it's a consumer or a business-to-business application, there's nothing that drives satisfaction like people knowing that you got it and you're never going to hear that it's not our problem," LaForge said. "We're always on the hook to help our customers succeed."
LaForge has plenty of knowledge of creating complex solution sets for businesses. Besides his stint at Nimsoft, he spent eight years at CDW Berbee before joining TDS HMS in 2011.
While large businesses are an attraction, OneNeck's initial focus is the mid-sized business market. What makes this market unique is customers typically are more willing to outsource IT and hosting functions earlier than larger companies and require more engagement from their service provider.
Managed services continue to be a big part of TDS' commercial wireline revenue mix. In Q3 2013, TDS reported that while it lost broadband and voice subscribers, it added 9,000 managedIP connections.
OneNeck's managed services ambitions aren't without its challenges.
One issue is scale. Competitors such as Windstream (Nasdaq: WIN) and Savvis have been aggressively building out a national data center footprint over which they can offer similar services to both large and medium-sized customers. They will also need to aggressively campaign their new brand to new and existing clients.
Regardless of its challenges, TDS' move into the services space was a necessary one to offset ongoing declines in its legacy wireline voice service business. OneNeck IT Solutions' success is far from certain, but it has put the right recipe in place to become a contender in the growing managed and IT services space.--Sean