Cabling contracting-an emerging giant?
It's difficult to service an account if you don't have an office in that account's city
It's difficult to service an account if you don't have an office in that account's city.
One of the subjects I've been looking into lately is cabling contracting. At almost every industry trade show I attend, for instance, I come across an organization that says it's going national, offering voice and data installation services across the country. At the next trade show, that organization has quietly disappeared, only to be replaced by another.
Why is it so difficult to establish a nationwide commercial contracting business? I took a poll on this question at a recent BICSI show, and got some pretty good answers. The reason, my contacts told me, is that contracting is very much a service business, and it's difficult to service an account if you don't have an office in that account's city.
That's not to say that regionally strong cabling contractors don't work outside their areas. They do. It's just hard for them to build a good client base in a distant city. Expansion, then, for these contractors tends to be city-by-city. One may start in Houston, for instance, and build a business there. When it gets big enough, it may bid on and win a job in Denver. If there's ongoing business in Denver following the first job, which may be managed remotely from Houston, the company may establish an office there.
So, cabling contractors seem to establish themselves in geographic pockets where they can afford to maintain a presence. What has not worked, according to the people I've talked to, has been the establishment of a national clearing house, where a contractor solicits business in many different areas and then franchises it out to its partners in nearby cities.
Is change in the wind? The people I talked to think so. Black Box (Lawrence, PA) has been known in the past mainly as a distributor, but over the past year or so, the company has been acquiring installation companies. According to people I've talked to at Black Box, these are not contracting subsidiaries; they are fully integrated arms of the parent company, responsible for distribution-and also for design, integration, and installation, if you want it.
A quick look at the Black Box Web site told me that the company does not have full coverage of the United States yet, the most gaping hole being in parts of the Midwest. Also, other areas of coverage seemed a little thin to me; half a dozen northeastern states, for instance, were being covered by a single contractor. Even so, industry observers whom I've polled think that Black Box has made an astute business move. If cabling contracting is to succeed in going national, I've been told, this is likely to be how it will happen.
But there is another approach-take a single large regional contractor and support its expansion effort. That's the approach taken by AMP (Harrisburg, PA), which recently acquired a large regional electrical and voice-data contractor, Fisk Corp. (Houston, TX). AMP, a major manufacturer of structured cabling systems, plans eventually to bring Fisk in on any installations the parent company comes across. Fisk, in other words, will be there to support AMP when the manufacturer's salespeople uncover a bidding opportunity.
Will all of this work out? It's too early to tell. Black Box has not yet completed its national infrastructure, and AMP, recently acquired by manufacturing giant Tyco, is still integrating Fisk into its organization. If history tells us anything, however, it's that as an industry grows and expands-as the cabling industry has over the last decade-national chains and franchising operations emerge.
Until now, the whole contracting arm of the industry has been a sleeping giant, in my view. Are we seeing the first signs of its emergence? Is that arm starting to flex itself and feel its power, so to speak?
Arlyn S. Powell, Jr.