MNJ Technologies is a $125-million plus channel company that has been in decline for several years. Its switch to cloud services is one of the reasons. The company also restructured its culture, go-to-market strategy, and technology portfolio.

This is the story of MNJ Technology, an entrepreneur-owned and self-funded business. Learn from its transformation.

MNJ Technologies was established in 2002, following the dot-com financial meltdown. Paul and Sue Kozak, the founders, set out to create a “full-service technology solutions provider” with a reputation as solution architects and sales reps who are knowledgeable and have excellent logistical skills. Paul Kozak is a 14-year CDW veteran who rose to the rank as executive vice president of operations prior to leaving. He knew a lot about scaling businesses.

MNJ Technologies was a Buffalo Grove-based company that specialized in reselling HP, Cisco and NEC products. The company was now a $100 million-plus company that caters to small and medium-sized businesses in the Chicagoland region.

Sales growth started to slow around 2013-2014. They stagnated over the next three years as customers started to look more closely at cloud-based services on a monthly basis. They began to shift their IT spending away from capital-intensive investments and towards flexible monthly contracts that were financed from operating expenses. Paul Kozak, MNJ COO, says the shift caught them off guard.

MNJ was forced to do some soul-searching and realized that it did not have the right customer relations , salespeople or business model, nor the market insights, necessary to pivot quickly. MNJ, which was known for its customer intimacy and employee-friendly policies like “free-lunch Wednesdays”, found it losing customers’ trust and alienating long-standing employees.

MNJ spent more time talking with customers about plans to move to cloud services and realized that they did not know where their data was located, how it would be protected, what applications they would use, and who would assist them in their digital transformations. Kozak and Sue Kozak, the company’s president, saw an opportunity before them. The picture began to become clearer and so did the challenges.

Kozak says, “I realized that we needed new capabilities and new players to work alongside us and new ways of selling ourselves.”

MNJ recruited new talent to jump-start the transformation. Ben Niernberg was a former Canon copier salesman and was currently working as an Executive Vice President in charge of business development and operations at a title company. Although he had no knowledge of MNJ Technologies or cloud services in general, he was very knowledgeable about turnaround transformations. MNJ hired him as the senior vice president of operations, sales, and marketing in April 2017, after he interviewed with the Kozaks.

Niernberg found MNJ a “great company base” that didn’t adapt to the changing times when he arrived. Niernberg says that MNJ was having trouble making the transition from the VAR model to what customers wanted.

Soon after arriving in New York, Niernberg realized that MNJ had to retrain their technicians and gain new capabilities and insight. MNJ also needed the skills to succeed.

Sell services to line-of-business buyers whose goals were measured in business results and not network uptime

This proved to be particularly difficult. Niernberg did some more research and discovered that MNJ’s sales team didn’t understand the difference between a P&L balance sheet and a P&L. Sales continued to stagnate despite an improving economy.

Management began to retool. MNJ purchased in Chicago, Equivoice in 2016, a high-end solution provider and services provider that specialized on cloud services and network infrastructure management. It also developed new go-to-market strategies and adopted business models. This resulted in the creation of Ignyte, a business unit that provides white-label services for channel partners.

The company’s transitions didn’t happen overnight. They were not easy. During the company’s transformation, morale plummeted and frustrations grew.

“MNJ Technologies Services [sic] has a downward spiral because of personal bias that is allowed be affected management decision-making regularly and ongoing,” said an anonymous former employee on Glassdoor in 2015 Another employee said that MNJ was nothing but a box-pusher and could not compete with Insight, CDW and many other real VARs in June 2017.

Many salespeople decided to quit the company instead of undergoing extensive retraining as frustrations mounted. The sales division was originally comprised of 42 people. It now has 34.

MNJ began to focus its efforts in an effort to revive the enthusiasm of those who had stayed. MNJ shifted its focus away from the data center and instead focused on the edge corporate networks, where customers were making strategic investments to prepare for a host of new applications.

Niernberg explains that everyone at the company needed to shift the way they saw the customer journey.

This extended beyond the engineering and sales departments to include the warehouse, accounting, and facilities maintenance organizations. He encouraged the sales team not to focus on boxes and instead shifted their attention to business applications and supporting infrastructure.

This shift was a success for the business. MNJ had fewer salespeople in 2018, but its sales rose 10 percent to $138million in 2018. The majority of growth was due to existing customers. Sales are expected to exceed $150 million this year. The company is now attracting many new salespeople. Niernberg is optimistic that there will be 50 sales specialists and many more customers with a little luck.

SD-WAN providers managed to see a lot of cash in their crystal balls.

A recent study by Global Market Insights (GMI), predicts that the managed software-defined wide-area networking (SDWAN) market will exceed $17 billion by 2025. This is a compound annual growth rate of 65 percent.

Ankita Bhutani & Preeti Waddhwani wrote the study. It included a long list of factors that are driving demand. Cloud-based platforms need new solutions to increase network visibility, manage complex workloads, and businesses have to oversee IoT devices and reduce security risks. Some of these issues can be addressed by SD-WAN, which offers capabilities such as intelligent load balancing or deep packet inspection.

Managed services are another important aspect.

They wrote that the demand for managed services will increase as more organizations outsource the implementation of their WAN infrastructures to managed service providers in order to lessen the complexities associated with in-house WAN deployments. Because the majority of network functions are outsourced, managed services allow them to lower their operational costs.

Among the many factors that drive managed SD-WAN adoption, the cost is the most important. This new technology allows you to eliminate “expensive legacy infrastructure” as well as its maintenance.

“The traditional WAN infrastructure used expensive hardware appliances to connect remote locations. Organizations can cut down on these expenses by deploying SDWAN solutions,” said the study.

According to the study, 75 percent of SD-WAN market share was held by physical appliances in 2018. According to the study, SD-WAN can help businesses save money by using a single product that combines required networking functions with coveted security features.

Some technology companies have already benefited from the managed services trend.

A bid was won by a national electrical contractor for Illinois-based MNJ Technologies. In partnership with a major carrier, the customer was running MPLS circuits at each of its sites.

Ben Niernberg is MNJ’s Senior Vice President. He said that the client had four major problems.

• The carrier charges a hefty MPLS fee
• Slow responses from carriers
• It couldn’t afford more MPLS circuits, so it had a lack of network availability and redundancy.
• As the firewall was managed by the carrier, it was difficult to provision security.

Channel Partners was informed by Niernberg that nearly all his customers have the same four issues.

“This is a sweet spot. He said that MPLS customers, lack of redundancy, and service issues with major carriers (which can be chronic) were all factors. “It’s almost a perfect storm for us, SD-WAN and our fully managed system.”

MNJ provided Silver Peak hardware, along with broadband and dedicated internet access (DIA) to the customer. MNJ manages and bills the connectivity, while the incumbent carrier will continue to provide fiber.

Niernberg stated that this one-throat to-choke approach is a cost-savings tool for customers, as it joins MPLS replacement.
He said, “We ethically compare the carriers against one another to find the best pricing for our customers.”

What is the difference between the Silver Peak SDWAN offering and the SD-WAN offerings that carriers create in partnership with vendors such as VeloCloud or Versa?

Niernberg stated that he is skeptical about whether carriers are objectively examining customers. This technology could be used to enhance and preserve MPLS. However, it faces an uncertain future.

Niernberg stated that “No one is ever fired for choosing AT&T or Verizon.” It’s the easiest thing to do. It’s not easy, but it makes everyone happy.

More Data

Another study by Acumen and Consulting also predicted high growth in SD-WAN. The annual compound growth rate for the SD-WAN market, not specifically managed services, is 58 percent.

Acumen names bring-your-own-device proliferation, IoT, mobile traffic, and network virtualization technology as key drivers.

Global Market Insights and Acumen both named the same 20 vendors SD-WAN leaders. They are Aryaka Networks and Barracuda Networks and Cato Networks.

Read the original article here.