Unidentified Analyst: Hi, thanks for taking the question, good morning. How do you anticipate improving your margins, especially as it relates to Flagship?
Chuck Piluso: Sure Flagship, primarily, their relationships with IBM and a few other large providers. The margins were small leads would come in or do come in from IBM, HCL, Red Hat and organization like that. And these clients would get entertained that they bring in to those services, which are typically 20% to 35% margin on that. So we’re redirecting all of the events and flagship has had – they have a great director of marketing and has done a fantastic job with many events throughout the United States over the 15 months since we purchased Flagship. So we’re working with Director of Marketing and moving that – some of those events more towards not introducing IBM’s cloud, but now our cloud, our infrastructure, our disaster recovery.
So that movement of 20% to 25%. And it could be higher to 35%. We’re hoping to see more of the 50% margin products introduced to the folks that are attending these events. So it is a part of our marketing plans that we’re putting in place for 2023. So I would say that that’s one way of improving margins. Also, Flagship has a data center in Miami Chuck Paolillo, our CTO along with, you know great staff at Flagship and also CloudFirst, we’re going to be migrating that data center to one of the six Tier-3 data centers we have throughout the United States with a four in the United States. And we’ve also centralized operations between Flagship and between CloudFirst, and under Chuck Paolillo, the CTO. And with that, we believe that, let’s not go add someone so fast to it, let’s see what the talents are in the organization to be able to see who can cover that.
And we’re uncovering some of those things today. Although, we need to add, if we’re going to continue to grow, we need to operate as we call service delivery and infrastructure. We’ll need to add to that. But right now, the situation is you know, Flagship could be using some contractors. And looking at those numbers Chuck Paolillo, we’ll see whether we should hire an employee that’s more cost effective. So I would say on centralizing operations, Miami data center and moving these marketing events, to not say that we’re selling IBM cloud, but selling our own cloud where we have millions of dollars invested in the six data centers. We’re also introducing as well, continuing the marketing programs will continue for cybersecurity and other IT services.
But we’re not going to bring in IBM and sell their cloud when we know we have greater than a 50% margin. And that’s something that we aren’t just not doing any more, frankly. I hope that answered the question on margins.
Unidentified Analyst: Yeah, thanks.
Operator: Your next question is coming from .
Unidentified Analyst: Hi, thank you, thank you for the questions today and appreciate your time on today’s earnings call. Could you comment a little bit more? You’ve touched on quite a bit about initiatives related to the sales strategy and sales pipeline as well as improving margins. Could you comment a little bit more give more color to timelines as to when some of these initiatives may materialize?