Friday, April 29, 2016

Spreading a Wider IT Net At UCG Technologies - IT Jungle

By Alex Woodie

Selling boxes in the midrange isn't easy. A shrinking customer base, falling margins on hardware sales, and tight IT budgets combine to put the squeeze on even the best-run reseller outfits. For longtime business partner Jim Kandrac, the shift was palpable enough to lead him to rename his Cleveland, Ohio-based company from United Computer Group to UCG Technologies.

It's notable that "computer" is no longer in the name of Kandrac's company. Are computers no longer important to the business? "The word computer is becoming more passé," he says. "They're still important, but they're less important."

In the heyday of the AS/400 and the iSeries, Kandrac's company would make 80 to 90 percent of its revenue from hardware sales. IBM's midrange server was the Golden Goose that kept United Computer Group humming, and put Kandrac's kids through college. But today, hardware sales account for less than half of UCG's revenues. The company still counts on a loyal group of customers in the Great Lakes region, but it's also been forced to broaden its horizons, and today UCG has customers spread across 31 states and Canada.

Serving such a geographically dispersed client base isn't easy. "It's challenging," Kandrac says. "In the old days, when you'd sell, you'd call somebody, make an appointment, and see them face to face. That's fine if they're local, but on a nationwide basis, it's more challenging."

To be sure, the midrange reseller channel has been evolving since the dot-com and Y2K bubbles popped in 2000. UCG has managed to hold its own and maintain share in a stable-to-shrinking market. But competition on hardware deals is fierce, and Kandrac is under no illusion that Power Systems sales will ever be as lucrative as AS/400 and iSeries sales once were, or that UCG will come to dominate the channel.

"We're a boutique firm," he says. "We're not going to be a $200-million business partner. It's not really our market. We're definitely in the midmarket. We've done business with 1,500 companies, and have a core base of 250 or so. We're looking to reach out from that and look at different segments."

As Kandrac looks to the future, he sees new opportunities rising in certain areas. The biggest is cloud-based backup, disaster recovery (DR), and high availability (HA), which today accounts for 35 percent of UCG Technologies' revenues.

Over the past 10 years, UCG Technologies has carved a niche for itself in this market through VAULT400, a backup and DR environment. While the VAULT400 name is going away, the service itself isn't changing. And without the "400" attached to it, perhaps more customers will tap UCG Technologies to protect Windows, Linux, and UNIX servers as well. (The company has supported these platforms with VAULT400 for many years.)

Ten years ago, when you tried to sell a cloud-based solution, people would look at you funny, Kandrac says. But today, people just seem to get it. With that said, the cloud discussion around the IBM i has its particulars.

"The reason for going to the cloud with i is more administrative, and getting it off your plate," he says. "You don't have 10 people in IT anymore. You have four or five, and you want to spend more time on running and supporting your internal applications. If you look at the cost dollar for dollar, it's one thing. But when you start looking at the people and the resources--that's really where the money is saved."

Kandrac is also keen to sell business software--in particular the IBM i-based ERP software from his partner, VAI. The combination of industry-specific software for apparel, durable goods, retail, food, and pharmaceutical companies and cloud-based backup, DR, and HA and VAI's applications gives UCG Technologies an edge, Kandrac says.

Jim Kandrac, President
UCG Technologies
Security training is a new thing for UCG Technologies. Last fall, the company announced that all subscribers to its cloud backup solutions would automatically receive ransomware awareness training from its partner, KnowBe4.

The ransomware epidemic is rampant at the moment, and several of UCG Technologies customers have fallen victim to cyber criminals who trick unsuspecting employees into clicking on links that then encrypt the contents of hard drives. 

"Do we make a lot of money? Not really," Kandrac says. "But I feel it's so critical to protect the data, so we include it. It's a cost. I get it. But there's no magic dust out here we can sprinkle to take care of data."

Kandrac ran into IBM CEO Ginny Rometty at the recent PartnerWorld conference, and came away believing that things like Watson and analytics could have a real future. Whether or not it plays with the IBM i platform has yet to be seen, but the pervasiveness of data is certainly getting to a point where it might.

"I think people have to be creative and ultimately come up with new ideas," Kandrac says. "When big data and analytics and Watson first came out, I wondered if this was new term for business intelligence and whether you run it on spreadsheets or Cognos. I'm starting to sink my teeth more into Watson and the cognitive era, and my eyes are starting to open. I'm a conservative person so I don't jump on the bandwagon, but I see how it can potentially help."

There's nothing on the drawing board at this point, but Kandrac recognizes the importance of being nimble. The stress and toil of the rebranding exercise ("It's like December 8, 1987--the day I started the business--all over again") was a potent reminder that creation and recreation is a never-ending process.

"I need to sink my teeth into something, and sink my teeth into things that are valuable for my client base, and how I can do more with less," Kandrac says. "Our eyes and ears are open."

Reprinted with permission from Guild Companies. Copyright 1996-2016 Guild Companies, Inc. All Rights Reserved.

Tuesday, April 12, 2016

Is Your Network Safe?

Cyber criminals are coming up with more and more sophisticated ways to threaten your security. Your network is only as strong as its weakest link and that is why training your employees in security awareness is crucial. 

Train Your Employees. Protect Your Network.

We have your data protected, but not from "human error”. It’s imperative to ensure all employees are educated and up to speed on how to spot ransomware attacks BEFORE they click on a dangerous link.

UCG now provides the following base value-added service at no additional cost to current and new UCG Enterprise Cloud Backup & DR (formerly VAULT400) subscribers.

  1. Phishing test for all active email users.
  2. List of users whose email addresses are exposed.
  3. Twenty-five users will receive online cyber security training. (Additional training may be purchased for $10 per user plus $2 every six months for maintenance, updates and support. This is a complete managed service.
  4. UCG will schedule ongoing phishing tests and training on your behalf.
  5. Quarterly reports will be emailed to bring your attention to violators who can then be scheduled for additional online training.

Bottom Line: Your organization is 20 to 40%+ risk of being hit with ransomware. With this training, it will reduce to negligible single digits or eliminate it completely.

800.211.8798 |

Sunday, April 03, 2016

Announcing UCG Technologies!

April 2016

Dear Valued Clients and Partners,

One lesson I’ve learned in the 29 years since I founded UCG is that your brand says a lot about not only who you are but also what you want to be. That’s why I’m pleased to announce that:

United Computer Group, Inc. is now

No new owners or a sale or merger, just the same top quality personnel and engineers our clients have worked with since 1987.

Why the change? And why now?

Well, we’re not just a computer company any more. In the early years, 80% of our sales were hardware related. While we’re still one of the largest independent IBM hardware business partners, our business has grown and diversified.

Today, computers account for less than 40% of our revenues. Most of our business is derived from UCG i Cloud, VAI’s S2K ERP solutions, UCG enterprise cloud backup, disaster recovery, and high availability offerings. And now enterprise security training, but more about that in a moment.

Our rebranding prepares us for the future.

The cloud presents dramatic new opportunities for us to solve customers’ problems in ways that would have been impossible just a few years ago.

For example, I recently had a chance to hear IBM CEO Ginni Rometty describe a vision that IBM calls “cognitive computing.” The presentation energized me because it outlined a new vision of computing powered by the intelligence of technologies like Watson to discover insights and relationships that are too complex for human beings to see.

IBM expects half of all software applications developed three years from now to have cognitive capabilities, up from just 10% today. The possibilities for us to apply cognitive reasoning to make our customers’ enterprise applications more efficient is exciting. Its potential to open up whole new areas of analytical insight is astonishing.

Our new name reflects our bigger goal of being a provider of integrated services that help our customers and manage their IT operations and their businesses more effectively. One example of how we’re making this transition is our new Enterprise Security Awareness Training.

Why Enterprise Security Awareness Training is integral to an organizations success.

Over the past 18 months, several of our clients have been hit with cyber-attacks. Phishing and Ransomware have become some of their most worrisome vulnerabilities. So UCG Technologies has partnered with KnowBe4 to offer free phishing and email exposure tests to our cloud clients. In addition, each Enterprise Cloud Backup & DR client will also receive a 25-user license for Kevin Mitnick’s superb nine course Cyber Security Training program. 

One client that recently took the phishing exposure test got an incredible 48% click rate on the malicious messages sent to employees. Thanks to the free training we’re providing, I believe they can reduce that vulnerability to negligible single digits. 

We want to be your full-service IT partner.

We’re expanding not only our product line but also our geographic scope. In fact, UCG Technologies now has corporate clients in 31 states, Canada, and in Europe. Our phones are ringing and our business is growing in excess of 20% annually, but that doesn’t change the principle that got us here: a firm commitment to complete customer satisfaction.

I’m proud of the team that has guided our growth, but most of all I’m grateful to our customers for showing their faith in us.

Thanks, and here’s to new opportunities ahead!   

Jim Kandrac, President