Next-Gen Cloud Provider Gives Bus Company Budgetary Boost
IndependenceIT (iIT), while a next-gen solution provider, is no stranger to the cloud game, with more than a decade of cloudiness under its belt. And when Student Transportation Inc. (STI) signed on with Allentown, Penn.-based IndependenceIT's cloud workspace, STI saw near immediate results and has managed to reduce its IT spend by roughly 72 percent the industry average.
"We host all of their apps in our environment," said IndependenceIT Senior Vice President, Sales and Marketing Seth Bostock, adding that iIT hosts somewhere in the neighborhood of 40 to 50 apps for STI, including video tools, accounting apps, CRM and other office tools in its Total Freedom Workspace.
Bostock said that STI has about 5,000 employees, nearly 1,000 of whom leverage the cloud apps on a daily basis. Because the company is not spending money on IT staff -- it only has four full-time IT folks -- and other resources, it spends 72 percent less on IT than would a company of the same size.
All told, Bostock said, STI spends less than one percent of its annual revenues on IT operations while still offering full-time access to all apps from any Web-enabled device. The average company spends 3.55 percent of its annual revenue on IT, Bostock said.
"Their IT spend now is just below 1 percent, and that's a constant they can plan on," he said, noting that STI now has a fixed monthly IT cost. "It's all very predictable. IT is not an unknown. They wanted low, predictable monthly costs."
STI is a major player in the student transportation industry with more than 8,000 buses in the U.S. and Canada and contracts with over 200 school districts, the company said. Since its inception, iIT has made more than 40 acquisitions and has grown from one office to 150 offices while also saving a massive $7.6 million.
Using iIT's cloud enables STI to take a "cut and paste" approach when it comes to acquisitions, meaning it has the ability to quickly and easily migrate acquired companies to the cloud. The cut and paste capabilities lets STI bring new companies on board by transparently passing their backend data into iIT's corporate system, meaning new users leverage the same apps they always have without changing how they work.
According to Keith Engelbert, STI's director of IT and investor relations, STI took the approach of, "I'm going to put as much stuff in the cloud as I can until it breaks." And so far, iIT's cloud hasn't broken.
Engelbert said the company may have an old-school business, but it was taking a next-gen approach to IT. It wasn't going to go down the old fashioned technology road, he said. Instead, STI dove headfirst into the cloud and didn't look back. The company didn't want to go in one app at a time.
That method has grown STI to a company with roughly $300 million in annual revenue, a number that Engelbert said is likely to continue to grow.
"This is what enables us to act like a $3 billion company," he said, adding that leveraging the cloud through IndependenceIT makes STI more nimble and standardized. It also gives a competitive advantage in terms of maintenance. Engelbert and his four-person IT staff doesn't have to maintain servers, VPNs software or other resources.
"Living in a cloud environment is a huge benefit for us," he said, adding that the predictable cost structure of the cloud helps him pinpoint STI's per-user per-year costs and since moving to the cloud Engelbert said he and his team haven't been more than $100 off in predicting the annual IT budget.