Startup ITXchg aims to address the IT needs of the SMB market

When it comes to services, we have seen a lot of startups take on the role of enablers to service providers. Startups like WorknHire, WorkMonk, IdeaDemocracy, and more recently, Dwll, a startup that aims to bring best of interior designers on a single platforms, have dabbled in this space. While this has worked very well for freelancers, there is still need for a platform that addresses the IT needs of SMBs.

The SMB market represents more than 50% of total IT spends worldwide ($3.7 trillion) and is growing at a CAGR of 7-8%. SMBs in the US and Europe markets have revenues between $25 million and $250 million are currently dependent on value added resellers and managed service providers for their services. They have various reasons to outsource -- cost saving, lack of skilled resources and lack of experts. And, this is the market that startup ITXchg wishes to serve.

ITXchg is a Campbell, California based startup with the sole purpose of bringing together midsize IT buyers and service providers. Sanjeev Kapoor had completed 20 years in the corporate sector with Infosys and thought of taking the plunge into the world of entrepreneurship. “I didn’t want to take up another job. After spending a few weeks at home, the idea started developing in my head. Within six months I had put a plan in place along with the team and I announced the launch of ITXchg services in Feb 2013,” he says.

Sanjeev correctly identified the gap in the way needs of SMBs are being addressed, and jumped right into it. The actual epiphany happened when he was at home mulling over different business ideas where he could leverage his Infosys experience of advising global IT sourcing companies and apply the learning to the SMB segment.

Team ITXchg

Today, he is assisted by Gayatri Buddha, who comes with 15 years of marketing experience at companies like MakeMyTrip & Monster, and shall be managing sales and marketing activities for ITXchg. She is currently pursuing higher studies and will join Sanjeev full time after she completes her course in July 2013. Vivek Shah has 11 years experience in the IT and ITES industry and will be leading ITXchg’s alliance development initiatives.

How does ITXchg work?

To explain ITXchg’s offerings, Sanjeev shared an example. In his own words:

“Imagine you are a cruise liner based in Miami and you need to build a custom application for scheduling the cruises. The rest of your application portfolio is based on .Net technology. Your small IT team is stretched to support the existing applications but building the scheduling application is critical to your business. You need a partner who that can be trusted with this important work. Or take the example of a cloud technology company that has several engineering resources but the marketing team needs a set of new features to be developed for an upcoming campaign that the existing team cannot support. The need is for a company that understands cloud platform development and will integrate with the existing team seamlessly.”

ITXchg is the platform that companies mentioned in the above examples can reach out to address that need -- an extended IT arm that can support them both for their short-term and/or long-term IT objectives. “We help them source IT service providers that we have empanelled after rigorous quality checks. ITXchg also assists the buyers monitor and manage their service providers,” says Sanjeev.

Updates

They’re just a couple of months into the beta launch and working with their first set of customers and prospects. Their offerings are based on the freemium model with some basic services available for free, and they will primarily make money from the commissions the service providers pay them for bringing them the project, and other value added services provided to both IT buyers and IT service providers. They’re planning to take the B2B mode for arriving at business decisions.

Challenges

Coming from a corporate world, the startup culture is something that Sanjeev is yet to adjust to, but he’s loving the feel of it. The multi-tasking on all business functions from sales to technology: from putting together a team, closing sales, working on getting the platform off ground to finding suitable office space, is something new for him.