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When it comes to moves, adds and changes, most customers can’t or won’t do what it takes to cut costs. As a result, many VDV contractors are surviving tough times thanks primarily to MACs work. Here’s a quote from Business Communications Review, by Frank Bisbee, a voice-data-video (VDV) industry expert:
“The strongest incentive to better cable management is the need to control costs. When wiring decisions are uncontrolled, companies can suffer from ‘Mac attacks’—moves, adds, and changes that can insidiously devour budgets and devour profits. MAC attacks began when the ‘put an outlet here, put an outlet there’ philosophy prevails.”
The article ran in 1989 and shows some things in the data communications/telecom market do not change, despite technology’s rapid advance. Bisbee wrote his piece before the Internet hit the public’s consciousness, at a time when building-wide data networks were primarily a conversation topic for propeller heads.
The key thing to note: Bisbee was talking about telephone wiring.
Electrical MACs, too?
“MACs are the thing that is keeping contractors going, how they are holding their business together,” said D.A. “Bo” Conrad, a VDV trainer with Crossbow Communications. “Unless the contractor has got some type of strategic alliance with a customer, he’s not going to make any money on bids for VDV installs. Recently, there was a walk-through on a bid for a school district here in San Mateo. There were 38 contractors on that walk-through. Basically, because you get more margin on the MACs work, it’s the only way some contractors can supplement the low bids they have to put in to win new installs.”
For the electrical contractor into VDV, there is a combination of “electrical MACs” and the VDV type. That’s what David Firestone, of Commonwealth Electric of the Midwest, is seeing. Commonwealth tells its customers that it will take care of “tenant finishes,” including the electrical, VDV and security needs.
“It goes hand in hand with us doing the power wiring,” said Firestone, who is the chairman of NECA’s VDV Task Force. “What we’re trying to sell is a one-stop shop. ‘Call us, and not only can we handle your power wiring, but the same person—or someone else in our organization—will take care of all your low-voltage needs.’
“We’ve been doing this for banks here locally, for years, and the same in our Iowa operation,” Firestone added. “For one customer—a facility where we’ve worked for many years—it seems like we’re moving someone virtually every day.”
While VDV and electrical MACs fit together, so does getting the initial VDV installation and landing the MACs work. Some contractors pursue low-price installations, just for the follow-on MACs.
“For some people, this amounts to a business philosophy,” Firestone said. “It amounts to, ‘If you’ve got your foot in the door, it’s a lot easier to get your entire body in.’ The focus seems to be on getting the initial project, at whatever price, and then staying with that customer for ever and ever.”
Some ideas on MACs
Bill Albert, data communications vice president for national distributor Rexel Inc. in Dallas, says MACs work might present contractors with a less-taxing route into the commercial VDV business.
“A contractor who gets into the datacom business probably should not start with a $250,000 job.
That’s a great way to lose money,” said Albert. “Typically, a MACs job is not very complicated. It’s punching jacks, running cable. It allows a contractor that does not have experienced people to get them some experience on a small project. There are contractors who handle moves from the electrical side—receptacles, perhaps some lights—who are now asking to handle the MACs as well. . . . It boils down to the old crawl-before-you-walk, walk-before-you-run approach.”
The best thing about MACs work is that it’s available. Customers may be postponing significant capital expenditures, but they can’t avoid MACs, according to Rob Bezjak, a Graybar vice president.
“Half of all business locations move people in a typical year. People still must handle day-to-day moves, and they are also trying to maximize their use of floor space,” said Bezjak. “This is work that needs to be addressed by a well-trained installer.”
Bezjak suggested capitalizing on the newly ratified Category 6 standard. Though Cat 6 is more expensive, contractors should stress to customers its longer life and productivity potential.
“A higher percentage of MACs are used right away—immediately—than in any new installation,” Bezjak said. “Many times, a customer will specify cabling for future expansion in a new install. In MACs, the customer hires a contractor to do specific work. A user will probably work at that location in a very short period of time.”
But perhaps the work won’t go well. Customers often have a laissez faire attitude, said Pete Lockhart, vice president of new technologies at Anixter in Skokie, Ill. “It’s a weird business. There is more MACs work in these tough times. When a company lays off 10,000 people, the tendency is to pack together the people you still have. So you move them,” he said. “But the results are not so good. End-users are having their contractors pull existing cables out of partitions and reuse them. That’s happening in 30 percent of MACs, we think.
“The customer cares that the green light comes on after a MACs job,” Lockhart added. “But it really doesn’t mean much—just that they put enough voltage through the cable to get the green light on. It doesn’t mean they’re passing any data.”
Contractors, however, aren’t taking shortcuts. “They are doing what the customers asked—paid them to do,” he said. “If the customer had installed a true structured cabling system in the first place, all they’d be doing for these MACs would be moving jumper cables.
“But the customers have been unwilling to make that additional investment. It’s totally dictated by the guy in charge of the facility. If it’s someone that doesn’t understand the infrastructure (structured-cabling) requirements, then he will get what he gets. Often, he’s not willing to pay any more money than he perceives he needs. At some level, the concept for this kind of customer is that he’s wiring the equivalent of a telephone. If the green light is on, that’s good. Of course, he might be losing 30 percent of his throughput.”
No accounting for MACs
Bisbee said little about MACs has changed since his 1989 article. He is president of Communication Planning Corp. and proprietor of Wireville.com, and has spent 40 years in the VDV world.
“Let’s say a business spends $1 million on a datacom network installation. Many businesses experience $1 to $3 million in additional network expense in MACs work, over three to five years. Some institutions have run to six to 10 times initial cost. We have documented this. Why?” Bisbee asked. “How does the customer see the network? Is operating it an expense? Or is it an asset? If it’s an asset, you manage it like an asset, and, by the way, you spend some more money upfront and put in better-quality material. But if you see the network as nothing but an after-installation expense, then you’re doomed to do it (MACs work) over and over again.”
Will customers wise up and end this contractor paradise?
“A contractor paradise is exactly what it is,” said Bisbee. “People like me have been advising the customer for years to manage the telephone systems and data networks as assets. We’ve been ignored—still are.”
Bisbee said if a data network can be cabled for $1 million, it might cost $50,000 up front to set up a records system. If managed over time, three to five years later, it will still be working, and only adds will be needed. This approach, instead of spending another $1 to $3 million in MACs, should appeal to the company’s CEO.
“But the CEO never finds out,” Bisbee said. “No one ever shows him the numbers on it.”
Bisbee doesn’t see more of the same. He thinks MACs will get much worse because customers are undisciplined. There’s no required testing and MACs are made without records. If an installer has to revisit, he or she often has to start from scratch. The federal government estimates 45 billion feet of cable is abandoned in the nation’s plenum spaces. MACs are a big reason.
“Take a typical MACs job. The customer needs it done in a hurry. If the installer tries to use what’s in place, but it doesn’t work on the first attempt, the next move is to pull in a new cable. It’s a lot cheaper for the customer than having the installer spend the time to figure out where everything is.
“So what are you doing, in the end?” Bisbee asked. “You’re piling more and more cable on top of existing cable. That’s how you get 45 billion feet of this stuff, none of it being used, in the plenums.” EC
SALIMANDO is a Vienna, Va.-based freelance writer and frequent contributor to ELECTRICAL CONTRACTOR. He can be reached at [email protected].