What do you do when your core vertical market -- energy -- collapses? In RigNet's (RNET) case, the MSP is moving aggressively toward SaaS and security services. The transition won't be easy.
In its Q3 2016, revenues were $50.6 million -- down $15.7 million from Q3 2015. Most of the drop involved managed services revenues -- which plummeted within the company's core oil and gas vertical market.
"We remain focused on continuing implementation of initiatives to improve operating leverage of the company, developing a broad range of SaaS and cyber security solutions for our customers, and growing our business in new vertical markets," CEO Steven E. Pickett said in a prepared statement today.
Amid the challenging energy sector, where oil currently trades at historically low prices, RigNet announced layoffs in July. Many customers were cutting back on their overall oil infrastructure, which squeezed demand for associated managed services. Among the painful data points: As of June 30, 2016, RigNet served 211 jack up, semi-submersible and drillship rigs, a decrease of 59 rigs since June 30, 2015.
Still, RigNet has a range of MSP expertise that it can potentially apply to different vertical markets. The company's know-how includes NOC and network monitoring over wide area networks; proactive IT maintenance for equipment in extreme conditions; and plenty more.
