How Comtech Solutions Leverages Data to Manage Costs, Drive Growth, and Negotiate with Vendors
Ethan Farlow and Comtech Solutions: A Family Legacy
Ethan Farlow’s journey to becoming the CEO of Comtech Solutions is as unique as it is inspiring. Founded by his father in 1990 in North Carolina, Comtech Solutions has always been a family-run enterprise. Ethan began working with the company at an early age, assembling computers after school. However, his path was far from linear. He spent several years as a professional rodeo bullfighter before returning to Comtech with a newfound passion for technology and automation. Under his leadership, Comtech has grown into a 30-employee firm specializing in IT services for industries like manufacturing, non-profits, and professional services, with a focus on efficiency and client-centric solutions. His family—his father, mother, and younger brother—play key roles in the company, making collaboration and shared purpose central to their operations.
Driving Efficiency Through Standardization
When asked by podcast host Madhur Duggar about strategies for scaling revenue without proportionally increasing costs, Ethan highlighted the importance of standardization. In the early days, Comtech customized solutions for every client. This approach was unsustainable. By identifying commonalities across clients, they streamlined processes and services. For example, billing practices were revamped to avoid inefficiencies.
Ethan explained: “We bill once per month at the beginning of the month for that month’s services. This system automatically updates agreements when technicians add or remove services, eliminating manual updates.” This change not only reduced billing errors but also ensured that all services were accounted for, preventing revenue leakage.
Leveraging Data for Vendor Negotiations
Comtech has taken an innovative approach to managing vendor relationships, driven by precise data analysis. Ethan shared a strategy they use to negotiate better terms: “If you know your data and your growth trajectory, you can use it to propose better deals with vendors.”
For example, Ethan demonstrated how Comtech’s consistent 20-30% annual growth allowed them to negotiate discounts or marketing development funds from vendors. By presenting clear data trends, such as planned client implementations, they secured benefits that reduced costs on a per-client basis while maintaining high-quality vendor solutions.
Key Performance Indicators That Matter
When it comes to measuring cost efficiency, Ethan emphasized the importance of actionable metrics. Two of the key performance indicators (KPIs) Comtech tracks are:
Hours per Endpoint per Month: Ethan stated, “We aim for 0.4 hours per endpoint per month for IT services, including on-site work. For phone systems, this number is even lower at 0.06 hours per endpoint.” Tracking this metric helps Comtech identify inefficiencies and focus on reducing labor costs without compromising service quality.Tickets per Technician: By monitoring the average number of tickets worked per technician and analyzing ticket trends, Comtech ensures that their technology systems are reducing workload over time. Ethan noted, “If our ticket count doesn’t grow proportionally with the number of devices we’re managing, it means our systems are working as they should.”Data-Driven Automation
Automation has been a cornerstone of Comtech’s operational strategy. Ethan shared an example of how automation improved onboarding and training for new technicians. “We analyzed common ticket categories and created detailed guides and videos for each,” he said. These resources are embedded in their IT documentation system, ensuring that even new hires can handle complex tasks efficiently.
Ethan also discussed automating billing processes to prevent errors. For instance, any change in a client’s service—such as adding or removing Office 365 licenses—automatically updates the billing agreement. This ensures accurate invoicing and minimizes manual oversight.
Best Practices for Hiring
Ethan also shared Comtech’s approach to hiring, a critical area for managing growth without sacrificing quality. “The key is having a clear and consistent process,” he noted. Over the past few years, Ethan developed a hiring framework that includes everything from creating job applications to onboarding new employees.
He explained: “We ensure our job postings are detailed and upfront about salary ranges to avoid mismatched expectations. We’ve also streamlined onboarding with training documents outlining day-by-day expectations for the first 90 days. This clarity reduces uncertainty and sets new hires up for success.”
Another best practice Ethan mentioned is leveraging internal referrals and job platforms like LinkedIn and Indeed to find candidates. By maintaining transparency throughout the hiring process, Comtech has been able to attract and retain talent aligned with their goals. “It’s about reducing unnecessary steps and ensuring that every hire fits both the role and the company culture,” he emphasized.
Offshoring: Current Views and Future Plans
Currently, Comtech does not use offshore resources, a deliberate decision based on their commitment to providing U.S.-based support. Ethan acknowledged that while this approach results in higher costs, it aligns with their value proposition of delivering premium, localized service.
However, Ethan remains open to the idea of offshoring as a future possibility. He explained, “We haven’t found a model that fits our needs yet, but I’m always reconsidering. If we can leverage offshore resources effectively while maintaining our quality standards, it could help us manage rising costs and remain competitive.”
He also noted that some MSPs use offshoring selectively to keep their pipelines ready for scaling operations. Ethan sees this as a potential strategy for Comtech down the line, especially if it allows them to balance cost efficiency with the high-quality service their clients expect.
Cross-Selling and Upselling Through Data Analysis
Ethan described how Comtech systematically identifies opportunities for cross-selling and upselling by maintaining a “client matrix.” This tool helps their account managers identify gaps in services provided to existing clients. For example, if a client uses Comtech’s phone system but not its IT services, the team develops targeted marketing strategies to promote complementary solutions.
“We break down features like call queues and mobile apps and identify clients who would benefit from them. Then, we create a 90-day marketing sprint to focus on these clients,” Ethan explained. This approach not only increases revenue but also strengthens client relationships by addressing unmet needs.
Navigating the Future with Data and AI
Looking ahead, Ethan envisions an even greater role for data and artificial intelligence (AI) in the managed service provider (MSP) industry. He hopes for tools that can analyze massive datasets, such as call recordings and ticket histories, to uncover actionable insights. “I want AI to tell me what I should focus on next,” he said. By leveraging AI for predictive analytics, Comtech aims to stay ahead of industry trends and client expectations.
Ethan is particularly interested in AI's potential to identify trends and optimize operations. He shared, “I want AI to analyze all of our call recordings, tickets, and other operational data to highlight patterns. For instance, if we’re spending significantly more time on a specific type of issue, AI could help us pinpoint the root cause and suggest corrective actions. That kind of insight would be a game-changer for efficiency.”
He also sees AI as a critical tool for proactive decision-making. “Instead of reacting to problems as they arise, I want AI to tell us where we’re headed and what adjustments we should make now to improve outcomes in the future,” Ethan explained. By integrating AI in this way, Comtech plans to enhance both client satisfaction and internal performance metrics.
Advice for MSP Leaders
Ethan’s advice to other MSP leaders is straightforward: “Know your costs. If you understand your per-computer cost and desired profit margin, you can determine the right pricing. Most of the time, MSPs simply aren’t charging enough.”
Ethan’s approach to data, automation, and client-centric strategies has made Comtech Solutions a model for operational efficiency and growth. By leveraging the power of clean, actionable data, they continue to provide exceptional value to clients while maintaining strong vendor partnerships and scaling sustainably.