Information technology franchise CMIT Solutions — which offers IT support to small and medium-size businesses — has concentrated several of its newer offices in the Washington area in response to an uptick in demand for tech help.
The national franchise has 138 offices. In the past five months, franchise owner Tom Burtzlaff has opened four local offices — in Howard County, Fairfax, Dulles and Prince William County, in addition to one in Baltimore he’d opened two years ago. This month, he’ll open one in Centreville, and has plans for another 10 in the area in the next few years.
Compared with other parts of the country, “we think the Washington/Maryland area [is especially stable], because of steady state revenues and governmental revenues,” CMIT president and chief executive Jeff Connally said. “As we’re coming out of the economic malaise, some parts are coming out faster than others.”
Though he declined to share more specific financial details, Burtzlaff estimated a 50 percent revenue increase over the past 18 months.
CMIT provides hosted e-mail, backup and disaster recovery, mobile device management, managed print, and hosting and cloud offerings, among other services. Offices usually staff about four to six people, serving between 50 and 500 clients. Depending on projects, fees often range from about $300 to $3,000 a month.
It is becoming increasingly common for small businesses to outsource the IT work they previously might have done in house, said John Madden, analyst at technology market research and advisory firm Ovum. As budgets tighten, he said, more businesses are asking: “What are you willing to offload to a third party?”
Concerns about cybersecurity could also drive demand. “With the number of security issues and cyber hacks … consequences are more severe in the last couple years.”
The rapid release of updates to major operating systems — and the obsolescence of major operating systems such as Windows XP, are heightening business owners’ concerns, he said. As Microsoft discontinues support for older operating systems, forcing businesses to transition to more current software, “it can be more economical to work with a provider who can do that seamlessly.”
But increased demand for tech help could lead to market saturation for IT-support franchises, Heather Rosen, Washington and Virginia consultant for FranNet, a franchise business consulting service, said. Often, clients looking to open tech support centers are dissuaded because “there’s a perception for sure — I hear it all the time from clients — it’s a saturated market and a low barrier to entry,” she said. “It’s a growing, not an exploding, sector.”
CMIT’s clients, most of which have between five and 99 employees, have recently been requesting support for cloud computing and bring-your-own-device policies, in which employees use their personal smartphones or tablets for work-related communication, Burtzlaff said. He said he’s noticed businesses in diverse sectors — health care, construction, financial and nonprofit, among others — transitioning to BYOD to cut IT costs.
Health care cybersecurity compliance laws have also provided a unique opportunity for IT support, Connally said, as updates to government regulations about data storage place greater pressure on hospitals or health insurance providers to keep data secure.
While the new Washington area offices were driven by what Burtzlaff said he believes is an uptick in demand for IT help, the franchise model depends on entrepreneurs willing to operate these offices, he said. Burtzlaff, a former chemical engineer, contacted CMIT in 2009 after Arcade Marketing’s 75-person cosmetics sample packaging company in Baltimore, where he was general manager, closed in 2009.