City of Reno IT services - Move to Switch - Risky or not? probably ok if they go up
Published: Friday, March 8, 2019 written by Drew Jackson
About a month ago, I was looking at investing in the stock market, and one of them that came up was Switch -- and that had to do with both the City of Reno looking to spend $500,000 to move their data services to them and then $120,000 per year in lieu of that.
So, I looked at the risk, emailed the director of IT (no response to a few requests), and then of course, figured, oh they have it figured out, as long as they have they cyber IPS/IDS added and symmetric bandwidth under control and at 1Gb/s up/down at a feasible cost.
caveat emptor - let the buyer beware. i am no financial analyst (professionally) but I know when the bank account tends to be going up, staying flat, or going down. the powers that be in any company are the only ones that know what is really going on. the force of the universe is growth, either through convergence and/or bursts of energy. with that idiom at hand, what does the future hold for Switch? I hope it is great! very great. though i don't work there, it would be cool. i have done a data center and ISP or two before.. doh! not another job!
Seeing how I am about to invest in them, i asked, ... did the City of Reno complete their due diligence on the move? I read the last two years worth of stock holder and shareholder and management notes provided via reporting mechanisms, and they might be at the bottom for a turn around, debt load being mixed with revenue growth, and some strategic alliances being completed... they probably will get a little top heavy in leadership for a while (much like Employers) but that is expected for partnering, as long as they keep the trucks rolling and cash flow positive, and overhead as low to $0 as possible.
Comprehensive outsource risk evaluations can be drawn up into 30+ metrics and 5 dashboard indicators and hopefully all of that was done. Otherwise, another move will be needed by the year 2020 or 2024.
I hope it works out. I am sure Switch will let them out of their MSA (master service agreement) if the situation changes.
Sent: Friday, March 08, 2019 6:43 AM
Subject: City of Reno IT & Budget Office, Jardon // moving to Switch
Dear City of Reno IT and Budget Office, and Jardon Ward 5 City Council,
Did the City of Reno factor in Switches financial position when deciding to move Reno’s IT servers and applications to their data center?
One of the things I did at Microsoft was determine vendor risk (CORE – comprehensive outsource risk evaluation) and using all sorts of metrics to determine if we chose a certain vendor to do business with, long and short term; from edgar to dnb, letters of credit, P&L, cash flow, you name it.. etc.
For me, I am looking at investing in them since they are considered moving to a potential buy, not a hold, wait or sell. I believe they might be looking for a buy out from a larger carrier like Zayo or one of the top five Internet2 carriers.
i went on to say..
Yeah.. this doesn’t look so good from a client perspective
across the long term, but from an investment perspective, they look like a
company worth investing in…
if they get any lower from $8 to $1 /share they will have to
do a reverse stock split to stay listed. I hope it goes the opposite for the sake of the city of reno and their move and go from $8 to $100 per share. and then have to do a 2:1 to 5:1 stock split -- oh the fantasies of growth and success.. who knows. be careful and balance your time and energy..
You can close this ticket. While I would like to know if they did consider the financial situation of Switch, its really none of my business unless we (royal We taxpayers) have to spend another $500,000 to move City of Reno IT again in 2-3 years, and have to pay $250,000 to get out of the contract.
All the best and Happy International Women’s Day.
Your friendly neighborhood computer guy (into the spider verse – can’t wait for in theatres "Capt. Marvel” to play today)
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