A couple of examples of areas where Yorktel has taken chances and found great success are its moves into the pharmaceutical industry and telehealth solutions. New Jersey is home to many multinational pharmaceutical companies, notes Gaboury, and working with those clients has meant Yorktel has done jobs in almost 90 countries with great success. Telehealth is Yorktel’s fastest-growing vertical and the company recently hired a business development person to focus on the opportunities there, says Gaboury.
Interestingly, Yorktel’s first job in the pharmaceutical space involved no systems installation or integration; it was purely a managed services deal, says Gaboury.
“We knew what we were doing and we knew there was a demand,” he says. “Companies were spending all this money on equipment they couldn’t use. The investment people make in technology is only about 4 percent of the total package. The other 96 percent is the people who are using it, the level of productivity, those kinds of things.”
“Everything has maintenance to it. Some integrators are still trying to figure that out. We were fortunate enough to have government contracts and able to build it up to the point we now have two VNOCs (video network operations centers). Big organizations understand the return on investment and they’re looking for services at a price point to achieve their goals.”
Since the late 1990s, Yorktel has essentially stopped bidding on jobs that don’t involve some element of maintenance, although Gaboury admits there are some exceptions under certain circumstances.
If you had to use Twitter to describe what your company does (maximum 140 characters) what would you tweet?
@YorktelCorp: We resolve enterprises’ challenges with video communications; UC, collaboration, video conferencing mobility, interoperability and media services.
Yorktel is fortunate to have some of the largest companies in the world among its clients, says Gaboury. But, were it possible to shave the top 10 or so clients off its revenue stream and sign 40 of its other clients to its full suite of services, he believes Yorktel could double in size with no new customers.
“Our services are vast,” says Gaboury. “We don’t rely on any one customer or any one service. We don’t lead with integration. We lead with managed services.” Yorktel works largely with some of the world’s largest companies, but Gaboury notes it’s breaking in with medium-sized firms on managed services.
CFO Judi Pulig says Yorktel’s balance between project revenue and service revenue has served the company well. “With our recurring revenue currently comprising about 50 percent of our overall revenue, this mix inherently provides our bottom line with an element of stability. Similar to the best practice of diversifying a financial portfolio, we are able to earn revenue despite the ebbs and flows of marketplace trends and economic fluctuations,” says Pulig.
Yorktel CTO Bin Guan, who joined the company 18 years ago, is impressed that despite its size, “the company still has a spirit of entrepreneurship. We think small and are very flexible. We’re a technology and thought leader and look at customers as a partner we want to grow with.”
Guan has watched Yorktel grow from almost exclusively a government provider to having about 60 percent of its clients in other verticals and going from almost exclusively an integrator to almost a 50-50 split between its integration services and managed services.
Content Is King
Among Yorktel’s other initiatives is its media services division, which it launched in 2003. The company is focused on growing those services going forward after largely concentrating on editing and captioning of video content to this point.
It’s Yorktel’s smallest division now, but that could change soon, says Gaboury. The revenue from media services “grew in spite of itself” in the past 12 months, but still represents only about 5 percent of Yorktel’s overall revenue.
“It’s the Trojan horse,” he says. “The sales cycle is weeks or a month at the longest. We were looking for another recurring revenue opportunity and content is endless.” Yorktel made some investments in media services in people, equipment and marketing, and Gaboury sees potential in post-production, digital signage, live events and more. He’s looking to double the division’s revenue “in the very near future.”
“We’ve gained trust with our customers to be able to do it,” says Gaboury. “It really came from looking for an ancillary business with recurring revenue. There are better margins doing this than in building something. If you do a good job, they want it again and again and again. We want to scale both inside and outside the U.S.”
Yorktel also recently launched Univago, a self-service subscription-based video conferencing solution that could represent another unique opportunity to expand its reach.
Learning from Mistakes
That certainly doesn’t mean Yorktel has done everything right over the years. Gaboury singles out some of its acquisitions that “we could’ve done different” as learning experiences for all involved, including one in particular in 2007 that “took a chunk out of the company” going into The Great Recession. The deals took Yorktel into the health care and higher education verticals for the first time, but because the company did its own due diligence, “we found skeletons.” They now use partners to help with due diligence before consummating any deals.
Yorktel also put a substantial amount of money into developing its own software at the dawn of the new millennium, but wasn’t able to get venture capitalist funding to bring it to the market, says Gaboury.
“Now, we’re more methodical with our business plans,” he says. “We look a lot more closely at what we’re putting into something and what we’ll get out of it.”
On Top of the Industry
When it comes to due diligence, in some cases Yorktel doesn’t have to look far to explore product or technology trends. The firm sits on the technology councils for Cisco and Polycom, among other large IT developers.
“We have to understand where they’re going so we can work together,” says Guan. “We try to understand our customers’ needs and talk to industry analysts and have them look at our portfolio.”
Yorktel staffers hold some of the highest levels of certifications with the leading video manufacturers.
“Achieving these certifications is a rigorous process, but important because they represent our expertise in the products we are spec’ing/recommending, integrating, managing and servicing,” says Gaboury. “The certifications give us deep product knowledge, as well as credibility and peace of mind with our customers.”
Yorktel employees live and work by a few simple rules. First is “Don’t be a vendor; be a partner.” Secondly, “don’t sell what’s needed now; help position your customer for future trends, upscaling, growth.” The third leg of the stool is “evolve with the market needs/ trends, but don’t dilute your core competency or focus.”
