If you missed the webinar with SLA's founder, Nael Aldoujaili, we’ve summarised some vital information about SLA in a Q&A session.
1. For your Product and Business Model, how scalable are they?
SLA: The IT services market is one of the largest sectors globally and has seen double-digit growth over the past five years. IT services market revenue is projected to reach $1.1 trillion by the end of 2022 and it should grow by 7 - 7.1% each year until 2027. Coming back to the SLA Business Model, 5-year forecasts are accessible to all investors on the deck. Additionally, as we migrate more towards our digital platform, we should achieve 50 million sales within the next five years. However, SLA has a very high scalability across different departments and companies. For example, early next year we will launch a new business unit called Software and Department, providing maintenance and support, tapping into not only data centre and hardware businesses, but also software and cloud. Bringing all our customers into the digital world.
Q2. Can you tell us a little bit about the issues or the pain points faced in the IT sector and how SLA is solving it?
SLA: There are multiple inefficiencies in the industry and SLA solves most of them through a one-stop platform, streamlining a highly complex environment.
The main pain point is the exorbitant post-warranty costs. OEMs and manufacturers ask users to update devices very often. In contrast, we are offering a cost-efficient solution by offering maintenance to existing equipment. We are working to reduce costs.
Another major problem in the IT industry today is dependence on a multi layer distribution procedure which eventually gets added to the margin. End users located in remote areas have trouble accessing engineers locally or remotely.
Finally, spare parts. Spare parts are really hard to find, and we offer a marketplace for it. We offer all players in the IT industry the opportunity to repair machines instead of buying new ones. Because the vendor said it was outdated. No, it's not obsolete.
Q3. The best quality spare parts are provided via the main contractor. So what is the incentive for them to buy them from SLA?
SLA: It is important to understand where spare parts came from in the first place.
If you order a hard drive from HP, Dell, Lenovo, IBM, etc., spare parts are likely from Seagate or Samsung. We guarantee spare parts that have undergone inspection and warranty. We also always calculate shipping costs to your doorstep. SLA eliminates vendors in the middle and sells replacement parts directly to end users, and can lower costs by 50%.
Q4. How is it that you're able to provide the spare parts at a lower cost than the contractors?
SLA: Typically, sellers are incentivised to sell and promote new devices and not to sell spare parts. At SLA, we act as a marketplace for spare parts at a fair market price. We source the parts from brokers globally, add a small fixed margin, and ship it directly to users. In every case, it will be inspected and include warranty.
Q5. Can you share some more information about your clients that you have currently?
SLA: Currently, we are focusing on the telecom sector, because building a data centre for telecommunication companies is highly lucrative. We have agreements in place to service their data centres. For example, we have been working with a major telecom in South Africa as a data centre service provider indirectly for many years, and are now working directly with them without any intermediaries. As we are not in the business of selling new devices, we consult them about the life extension of their data centre, and every time we meet they are astonished to learn that the equipment they have had for 5 - 7 years is still perfectly functional. We provide high quality maintenance through services like upgrading processor capacity, memory, updating spare parts, etc. And in exchange, they get to maintain and enhance their existing data centre without having to rehaul their entire system. We offer a huge value added service for those companies, as it reduces their CapEx.
Q6. Who are SLAs main competitors at this moment? And also there are major players in the IT industry. What's stopping them from replicating your model?
SLA: SLA Expert focuses on extending the life cycle of the existing data centre, while other players are trying to push new hardware and refresh technology to close large sales. We simply have different business models, and different targets.
There are third-party maintenance (TPM) companies that offer cost warranty services but it often results in a cost increment every year. These maintenance companies will buy support from IBM, HP, Dell, etc., for parts. TPM companies are using their own staff and their own warehouses, to maintain and provide services, Resulting in a huge fixed cost and wider margins.
Comparatively, the services provided by SLA are delivered by a network of dedicated experts, whose services are called upon when needed. We are following the Uber model of service technicians while traditional TPM companies take on high overheads and margins.
Q7. Can you just give a little bit more details on how the actual model works or what do you mean by the Uberization?
SLA: We serve as a marketplace where we connect our end-users with a network of 600 engineers and spare parts from the 8 major component suppliers. We offer flexible monthly, quarterly and annual subscriptions, and ticket-based solution tickets. On the engineer-side, we carry out an assessment of their profile, CV and engineering skills before onboarding them to the platform. On the portal, users are able to sign in, create a ticket, locate an engineer, and track the progress. We also offer 24/7 support to our customers.
Q8. Do you only provide Layer 1 service like card swaps or do you provide other services like software upgrades?
SLA: We fully support Layer 1 to Layer 3 services.
Q9. How do you source spare parts for discontinued equipment? Is this something that you offer?
SLA: Not only is it possible, it's one of our core businesses. In the UAE we go to Doha, France, London and Amsterdam. There is a huge market for brokers of spare parts. When companies discontinue products, they often give away equipment for free. Big brokers have large inventories of servers, products, and storage at fractional prices.
Q10. Have you thought of adding a premium service such as using AI to predict when a part may fail and proactively changing the part?
SLA: Not only are we predicting, it's already available from all providers. There are tools that are available to end-users to predict when a device requires maintenance. Every maintenance contract we have in place includes an annual if not quarterly health check-up. Even if there are no issues, we perform site visits to ensure the data centre is functioning properly, down to checking the cooling systems.
Q11. So how do you get around security vulnerabilities on older equipment?
SLA: We do not currently offer cybersecurity servicing, but it is a business unit we're seriously considering, namely cybersecurity and penetration testing.
Q12. What's the average monthly utilisation of your service technicians?
SLA: We are projected to earn USD600,000 in revenue this year, which equates to 20-30 service tickets per month. However, not all the tickets require a technician on-site. At the moment, most claims come from Dubai, South Africa and France but we have presence in 50 countries with over 650+ technicians, so our team is scalable.
Q13. What is the market size for this space?
SLA: The data centre service sector will be worth $1.1 trillion by the end of 2022.
Q14. What will be the use of funds?
SLA: The investment is mainly used for technology development. Our current platform requires significant enhancement. The second largest spend is to grow the broad core team and the third is to develop strong PR and communication strategies for brand awareness. We are investing heavily in technology to roll out and launch an all-new platform early next year.
Q15. Have you offered any commercial penalties? So let's say as per the SLA agreement, you need to deliver within a certain time period. And have you paid out any money this year if you didn’t meet the terms of SLA?
SLA: We put quality of service at the forefront of corporate policy. Therefore, we would like to be able to deliver as agreed. And of course, we always try to reduce this to a certain amount to around 1-5% of the contract value per incident. SLA has not had to pay a fine in the entire 5-year history of the company.