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CapRock Shows Vertical Markets Can Pay Off

By | August 16, 2004

      By Paul Dykewicz, senior editor and senior analyst

      One of the most important parts of decision-making for business executives is to know the competitive advantages of one’s own company, and to market its products and services accordingly. Businesses that make the right choices often grow, while those that take missteps typically pay a price.

      An example of how expanding astutely can pay off is occurring with Houston-based CapRock Communications, a provider of satellite and wireless network services for companies that outsource their remote site communications. Outsourcing has become synonymous lately as something that usually involves moving U.S. jobs overseas but CapRock is bucking the trend by adding jobs as a contractor of communications services.

      Part of the company’s growth has been driven by branching out beyond its traditional niche of serving oil and gas companies. CapRock has extended its customer base to include other vertical markets that need remote communications, such as mining, construction, emergency response and maritime. David Myers, CapRock’s vice president of marketing, told me during an exclusive phone interview last week, “We run the communications network for a fleet of ships. We also run communications for a construction company.”

      One key to growth at CapRock during the past two years has been a big push into the vertical markets that operate in harsh environments such as deserts, oceans and anyplace else that is remote or difficult to reach, Myers said.

      “To improve our ability to serve customers in those markets, we have migrated to newer technologies that allow us to provide more cost-effective, shared services,” Myers told me. “It allows customers with a smaller number of sites to economically benefit from satellite technology, without the challenge and the expense of building a private, custom network.”

      For many companies with global operations, there is a need to link the remote or overseas site back to headquarters in the United States. In the past, many companies met this need by building their own self-managed satellite network facility. “This can be an expensive and cumbersome proposition if your core business is not managing satellite communications,” Myers said.

      While managing those functions may be a headache for some companies, they are a fertile opportunity for growth-oriented CapRock. Privately held CapRock’s revenue growth has reached “significant” double-digit percentages, while adding dozens of jobs during the past two years. That surge has been fueled, in part, by taking full responsibility for the management and operation of some of its clients’ satellite networks, Myers explained.

      “For some clients, we have absorbed personnel and assets into our own in-house capabilities,” Myers said. “As we take on that responsibility, the people come with it.”

      The company’s status as a private company makes it difficult to know exactly how well it is performing. However, the company’s move last April into a new 62,000-square-foot facility on a 6.5-acre tract of land is evidence that its owners, The Riverside Company and Houston-based Genesis Park, are confident of CapRock’s future CapRock’s extensive growth during the past year, expanding to all corners of the world, required the move to support the enlarged operations, CapRock CEO Peter Shaper said during the grand opening. In addition to more space, CapRock’s new headquarters feature an increased number of satellite hub Earth stations and an advanced network operations center (NOC). With its network management capabilities, CapRock’s NOC monitors, manages and provisions customer networks around the globe 24 hours a day, 365 days a year.

      CapRock’s willingness to invest heavily in the latest technologies at its new operations center during a weak economy suggests that it is showing no signs of slowing down. The company’s gleaming new headquarters is tangible proof that sticking to what an organization does best can be most rewarding.

      (David Myers, CapRock, 832/668-2300)

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