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Top Vars 2018 Top VARs In association with 2018 BROADEN YOUR SCOPE, ENABLE YOUR GROWTH Delivering technical excellence to the channel A specialist services partner you can rely on: • Strategic IT support • Modular-based service design • Flexible, scalable, adaptable Comms-care is the UK’s leading strategic partner dedicated to supporting the IT channel. A natural extension to your team; we deliver world-class value and services on your behalf, tailored to fit any customer requirement, that help increase productivity and reduce operational costs. For more information contact us on: T: +44 (0) 8702 644 303 E: [email protected] www.comms-care.com calls cost 7 pence per minute plus your phone company’s access charge CRN TOP VARs 2018 Welcome to Top VARs 2018 Uncertain market conditions led to resellers of all sizes seeing a decrease in average profit margins for the second year running, but these resilient VARs fight on, generating a combined revenue of £15.7bn this year I’d like to begin with an apology to neutral or better than neutral any football fans stumbling upon encounters. That said, only one this supplement and expecting of the top 50 polled an average it to contain profiles of Michael satisfaction rating of above 60 per Oliver and Martin Atkinson. cent, signalling that there is clearly There are an estimated 10,000 room for improvement. ‘value-added resellers’ in the UK, Many people feel that ‘VAR’ has and this report – which ranks the become a grossly inadequate term top 100 by revenue – suggests for most companies in this report, they’ve had just as eventful a year and it is true that the majority as their refereeing namesakes. now operate service-led business Led by bullish Computacenter models and even develop their and Softcat, the 100 tech resellers, own intellectual property. MSPs and consultancies profiled What we are talking about is in Top VARs 2018 generated the tier of suppliers that sell, and combined revenues of £15.7bn provide solutions and services Doug Woodburn is editor of CRN in their most recent financial years around, technology made by the on record, a 12.9 per cent rise major IT hardware, software, re-invented themselves as hybrid year on year. comms, audiovisual, cybersecurity, cloud consultancies in recent years. However, average profit margins cloud and print vendors, including New threats – not least the were down, with firms blaming Microsoft, Cisco, HP, HPE, Dell entry of Amazon into the B2B factors ranging from Brexit and EMC, Symantec, Avaya and AWS. technology market – will continue savage competition to the threat Together, they are the prime to appear, but history has taught of the cloud for a fall in their influencers of the majority of us that the channel has resolutely bottom lines. technology purchases made by adapted to every challenge that has organisations in the UK. been thrown its way. VAR from heaven That’s not to say that the firms in This year’s end-user research (p32) Reseller resilience this report aren’t enduring pain, as goes back to basics as we seek to For years, the doom-mongers the profit analysis on p5 explores. explore the fundamentals of the have predicted the decline and Worryingly, average profit margins reseller model in a year in which even extinction of firms that resell have sunk for a second year that other sort of VAR – video technology. running, with the mean net profit assistant referees – made their What the headline numbers among the top 100 now standing World Cup debut. of this report show, however, at 1.8 per cent of sales. We quizzed 276 IT decision is how successful the UK’s top But how indicative of any long- makers about how much the resellers have been in upgrading term trend this is remains unclear term ‘VAR’ resonates with them, their business models to counter while Brexit looms over us, and whether they prefer to buy direct or existential threats, not least the it is a credit to the industry’s through the channel, and whether rise of cloud computing. remarkable resilience that all they feel resellers hold more or less This point is illustrated perfectly of last year’s top 100 remain in sway in the era of cloud. in our end-user survey, where 18 business. In a first for this report, we also per cent of end users said they To borrow a phrase that will asked them to rate their VARs, felt that the rise of cloud has be familiar to any disappointed and it is encouraging that – by actually enhanced the importance football fanatics still reading, the and large – end users reported of resellers, many of which have game is very much on for 2019. CHANNELWEB.CO.UK 1 CRN TOP VARs 2018 Philosophy of change It is time for resellers to adapt nimbly to the fast-changing shape of the IT market and ensure that they can cater to end users’ needs In today’s world of constant evolve by adding value to their turmoil and change, whether end-user engagement through that be in technology, politics or providing new technologies, the economy, it seems the only consultancy/knowledge or thing of which we can be certain adopting a more flexible is that there will continue to be business model. uncertainty. So while traditional values Looking back over 2018, while remain extremely important in the two key strands that we the IT channel and there is still a expected to dominate the agenda place for reselling, now is the time – GDPR and Brexit – largely for firms to truly become value- did, neither of them has yet had added resellers, with the emphasis a clear and certain outcome. on the value-add. While important, GDPR does As noted elsewhere in this not seem to have had the impact report, average profit margins on the channel that many were within the channel have fallen Mark Forster is managing director predicting, and Brexit has been for the second consecutive year, of Comms-care full of mystery and rhetoric with which means the need for firms to very little conclusion. At the find ways to make their businesses time of writing Brexit very much more profitable is ever greater. replaced by a call for consultancy, dominates the agenda and looks It is perhaps for this reason professional services and skills in set to remain a turbulent influence that we see an increasing trend emerging technologies such as for some time yet. towards firms outsourcing key IoT, AI and robotics. areas of their business for a lower The ability to offer a single Theory of evolution cost than they could provide them service to resellers is no longer The IT channel has not been internally. Through partnership, enough; they have increasingly exempt from this change and resellers can skill up or scale complex demands and will seek uncertainty; 2018 saw a continued up quickly and easily without firms that can manage multiple pattern of consolidation through the need to invest in costly new parts of a solution to take the full mergers and acquisitions, driven resources in-house or training headache away. in part by firms recognising that and development; enabling them No-one really knows quite what they need to change, adapt and to meet the need for ‘burst’ this means for the future of the bring in additional skill sets to demand, broaden their service IT channel, but it seems clear that stay ahead of the curve, either to portfolio or even begin to shift resellers will continue to face a meet new competitive threats or their business model towards a host of challenges – both known adjust their business models in more services-led approach. and unknown – as they seek order to embrace disruptive new to reinvent their businesses to technologies. Complex needs remain not just competitive, The competitive landscape This demand has required channel but profitable. in the B2B technology market partners, such as Comms-care, Whether those challenges continues to evolve in the shape to embrace their own philosophy are around ad hoc increased of new entrants. For example, of change and evolve their own resources, offering new services, resellers can now consider that business models and service route to market, articulation to they are competing with the likes portfolios. As resellers start to see end users, training or something of Amazon and as it’s clear they the demand from their end users else, seeking ways to deliver them cannot compete on scale and for traditional support services in a more cost-effective way price, they need to change and decrease, it will increasingly be could be key. CHANNELWEB.CO.UK 3 CRN TOP VARs 2018 THE TOP 100 This Cisco Gold partner enjoyed since it was founded in 2000 and 100 Electrosonic a barnstorming year to 31 March now employs 180 staff across Revenue: £39.9m (+35%) 2018, with revenues ballooning seven offices. Recent deals, Net profit: 0% Staff: 279 by a third and net profits virtually including one for £16m-revenue doubling to £2.2m. Having Nexus last May, have pushed This audiovisual integrator rebranded from Touchbase Elite’s revenue run rate to £57m, sneaks into the top 100 on the UC in 2015, the London-based although the figure stood at back of a whopping 35 per cent collaboration specialist now £40.2m in its year to 31 July 2017. revenue jump in its year to 31 boasts offices in Sydney and New December 2017, although its net York and generated almost £5m Roc Technologies profit thinned from £236,000 to of its £40m turnover from outside 97 £20,000.
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