David Bailey, Vice President, Protected Trust
Things have been changing at Protected Trust during the past 12 months. Last November it entered into a merger with DocuLex and three other companies. The four companies had the same investment group, which determined to combine all four into one. According to Protected Trust Vice President David Bailey, this made a lot of sense because most of the companies were focused on managed services. In June of 2013 the companies moved in together and now share the same office space in Winter Haven, FL.
This past spring a decision was made to sell DocuLex to DocStar, narrowing the focus to Managed Services with strong focus on the healthcare market where HIPAA compliance remains at the forefront. Protected Trust has its data center in central Florida and offers cloud servers, hosted e-mail, e-mail encryption, and backup, and disaster recovery services.
Last week I spoke with Bailey about the decision to sell DocuLex and the Managed Services opportunities Protected Trust offers to dealers and resellers.
Why did you end up selling off DocuLex?
Bailey: As we were formulating our go-to-market strategy we decided that healthcare was a primary focus for us. One reason was the e-mail encryption solution is the fastest growing part of our business and it’s all driven by HIPAA compliance. We thought if we drive customers through the e-mail encryption solution we can follow with our secure e-mail platform, servers, and backup and disaster recovery, which HIPAA requires for these healthcare facilities.
DocuLex became less and less a fit with our offering and focus on healthcare. It didn’t really have that [tie in to] HIPAA even though the product itself, had meaningful use, it wasn’t a growing market in healthcare because of all these HER/EMR packages that are integrating electronic data management along with document management, thus leaving out the need for standalone EDMS. About two years before selling DocuLex we had already started working in data centers, focusing on virtual servers/cloud storage, and all that. I kind of realized that document management wasn’t a hockey stick any longer.
Where do dealers and resellers fit into the picture for you now?
Bailey: They sell our services, which as you know, especially for the copier dealer, they’re looking to move into Managed Services. They’re looking into recurring revenue models. All of these services we sell we sell to dealers. We also have some dealers that are more IT centric—break-fix dealers for local IT.
With the various segments of your business, who do you view as competition?
Bailey: For e-mail, Gmail and Microsoft are our biggest competitors. Along with our own hosted e-mail solution we are providing support for Microsoft Office 365, at least from the prospect base we’re talking to who require more support for e-mail. A small company wants you to hold their hand. We don’t have much competition in the small business. If you look at healthcare, and most doctor’s offices, clinics, and dental clinics, they’re all small businesses, we do have some hospitals, some with us, and some with Microsoft for e-mail hosting.
On the e-mail encryption side there aren’t any major players. It’s companies like ours. If I had to pick one, I’d pick ZIX.
Can dealers sell e-mail encryption?
Bailey: Yes. Brother Cloud (www.brothercloud.com) is an example of our relationship with Brother Corp. where we provide secured cloud services. Dealers can put our kiosk up on their Website where customers can acquire the service through their Website and we’ll manage that for that reseller and they’ll get credit for it and compensated for it. It’s easy, probably one of the easiest things I’ve ever sold.
Why?
Bailey: It’s a HIPAA requirement. The healthcare industry has to do it. They don’t have to do it with us, but they have to do it with somebody. It’s nice to sell something that somebody has to have.
What should dealers who might not be familiar with Protected Trust, need to know about the company?
Bailey: Dealers are looking for recurring revenue. Every service we offer, offers that. What client doesn’t use e-mail or need backup at the end of the day? The value [dealers] bring is the local presence; they’re onsite and face to face [with the customer].
What kind of training and support do you provide to dealers and resellers?
Bailey: Primarily online. We provide all of the support. We support the cloud servers and the dealer supports the desktop and charges [their customers] appropriately. We support the infrastructure in our data center. There’s a local revenue generating opportunity for the dealer as well besides just marking up our solution.
What are the successful dealers selling your solution doing right?
Bailey: The ones who are most successful are committed to it and have the proper IT resource. They only need one. Sales reps just need to know what to say, but the dealer needs to have at least one competent technical person who understands how it works and knows their way around desktops.
It sounds like there’s a lot of opportunity for the various Managed Services Protected Trust provides. Where does backup fit into the picture?
Bailey: It’s an add-on to all of the other services as well as disaster recovery.
You must have a positive outlook in regards to growth for the business?
Bailey: I just read some numbers on our e-mail encryption service, comparing the first six months of last year and the first six months of this year. We grew at 490 percent.
Why do you think that is?
Bailey: We have the right product in the right time period with HIPAA, SOX and others although we really focus on HIPPA.
