Business model of Quanta Services

Customer Segments

Quanta provides a range of network of services and solutions to a broad network of industrial and commercial customers. The Company’s clients can be organised into two principal categories:

• Power Sector, including energy generators, renewable energy businesses, power transmission companies, and power distribution and marketing companies; and
• Oil and Gas Sector, including national, multinational, and independent oil and gas production and exploration companies, as well as midstream and upstream oil and gas companies.

Quanta serves a number of high-profile customers across the energy sector. This includes well-known businesses such as ConocoPhillips, Shell, Con Edison Development, PG&E Corporation, and Duke Energy Corporation. The Company also serves certain government and public institutions, including the US Department of Defense.

Quanta’s principal market is its native US. The Company, however, also serves a number of international customers across Canada, and Australia, as well as other select international markets.

Value Propositions

Quanta provides value to its customers in the following ways:

• Its reputation and industry standing, with the Company established as leading provider of network solutions to customers across the energy and oil and gas sectors, including a number of prominent names among its client base, such as the US Department of Defense, ConocoPhillips, and Shell;
• Its proprietary technologies, with the Company owing a portfolio of proprietary energised services tools, techniques, and design technologies that differentiate the Company’s service offerings from those of its competitors;
• Its international reach, with the Company serving a broad network of customers in its domestic market of the US, as well as a number of customers operating in Canada and Australia;
• Its industry expertise and experience, with the Company employing specialist technical personnel to work on its various solutions, as well as a team of experienced industry executives.

Channels

Quanta operates a website at www.quantaservices.com, through which it provides information on its various services, solutions, and operating units. The Company does not operate an online sales channel, nor does it provide an online customer portal through which clients can manage transactions.

Quanta make sales through its dedicated in-house sales force who deal directly with clients, subsequently providing specialist technical services through highly-trained, expert personnel. The Company’s sales and service teams are based at the Company’s various offices across the US, Canada, and Australia, including its corporate headquarters in Houston, Texas.

Quanta provides services to customers directly on-site, working closely with client representatives. The Company also operates a network of facilities across its operating jurisdictions, including equipment yards, warehouses, storage spaces, and vehicle shops.

Customer Relationships

The technical nature of Quanta’s various solutions does not allow for it to provide services to its customers on a self-service basis. The Company, instead, provides services directly to its clients through its teams of sales and service personnel. Quanta consults directly with client of a period of time in order to jointly establish a detailed and exhaustive brief covering the aims, requirements, and limitations of each individual project. The Company typically provides solutions on a project-by-project basis, with the quality of its services intended to encourage recurring business.

Quanta provides ongoing technical support services to its customers. The company’s large clients are provided their own account management teams, with which they work closely throughout the duration of each project. Customers are alternatively able to make specific enquiries and queries with the Company over the phone or via email in order to receive personalised assistance. Additionally, Quanta provides various resources through its website, including press releases and safety information.

Quanta also operates social media accounts with Facebook, Twitter, and LinkedIn through which it is able to keep clients updated with corporate developments and interact with customers directly.

Key Activities

Quanta is an international provider of specialty contracting services, principally comprising a range of network and infrastructure solutions designed to support customers in the electric power and oil and gas industries.

The Company aligns its operations into two reportable business segments: Electric Power Infrastructure Services, which provides a range of network solutions relating to the design and maintenance of power transmission and distribution infrastructure, and provides other engineering services; and Oil and Gas Infrastructure Services, which provides a range of network solutions related to the development and transportation of natural gas, oil and other pipeline products.

Quanta’s solutions span the entire lifecycle of power and oil and gas infrastructure, including design, installation, upgrade, maintenance, and repair. The Company principally serves customers in the US, Canada, and Australia, as well as in certain other jurisdictions around the world.

Key Partners

Quanta works in conjunction with a broad range of companies and organisations across its two operating segments. The Company’s partners can be organised broadly into two the following categories:

• Supplier and Vendor Partners, including suppliers of equipment, tools, and materials used in the Company’s various infrastructure projects, as well as suppliers of services and technologies that support the Company’s operations more broadly across both operating segments;
• Contracting Partners, including various contracting and engineering companies that provides services in support of the Company’s various power and oil and gas infrastructure projects around the world;
• Joint Venture Partners, including various infrastructure, engineering, and construction companies with which the Company jointly provides services and solutions through mutually owned entities in various jurisdictions; and
• Strategic and Alliance Partners, including market leading companies across multiple sectors, with which the Company collaborates in joint marketing, branding and other projects.

Quanta has launched a number of partnerships in recent years. This includes a joint venture construction project with Eurus Energy, a training and education partnership with Sam Houston State University’s Department of Agricultural Sciences and Engineering Technology, and a construction venture with ATCO Group.

Key Resources

Quanta’s key resources are its technologies and intellectual properties, its tools and equipment, its IT and communications infrastructure, its storage and equipment facilities, its office network, its partnerships, and its personnel.

Quanta utilises a number of patented products and proprietary technologies in the design, installation, and development of its infrastructure projects. Searches of records published by the US Patent and Trademark Office identified a number of patent applications filed in Quanta’s name, including applications entitled ‘Cutting blade apparatus and methods’, ‘Grout for filling a micro-trench’ and ‘Aggregation of customer transaction data’.

Quanta additionally owns and or leases a network of physical properties that are key to its operations. This includes the Company’s various sales and administrative offices, and storage, warehouse, vehicle shops, and equipment facilities, as well as its various vehicles, trailers, trucks, and construction equipment.

Cost Structure

Quanta incurs costs in relation to the development of its technologies and solutions, the procurement of equipment of supplies, the procurement of services, the maintenance of its physical infrastructure, the maintenance of its IT and communications infrastructure, the operation of its sales channels, the management of its partnerships, and the retention of its personnel.

In 2015 Quanta recorded total cost of services in the amount of $6.65 billion, and selling, general, and administrative costs – including the payment of compensation to the Company’s workforce of 24,500 employees, as well as marketing, office rent, utilities, communications costs – totalling $592.86 million.

Revenue Streams

Quanta generates revenue through the provision of various network and infrastructure services to customers in the power and oil and gas sectors, primarily in the US, Canada, and Australia. The Company’s revenue is principally derived in the form of unit price or fixed price agreements with its customers, agreed mostly on a project-by-project basis.

In 2015 Quanta generated annual revenue in the amount of $7.57 billion, down marginally on the $7.74 billion recorded by the Company the previous year. The majority of the Company’s revenue was generated by its Electric Power Infrastructure segment, which recorded revenue for the year totalling $4.94 billion. The Company’s Oil and Gas Infrastructure segment generated $2.64 billion.