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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. Robert Simpson, who the UK. It recently developed a Revenue: £40.3m (+64%) founded Electrosonic in 1964, was chatbot named ‘Natbot’. Net profit: -7.3% Staff: 89 awarded an MBE last year. The Dartford-based firm, whose clients Elite Group Founded by a gaggle of former include Kennedy Space Centre and 98 2e2 executives, and after a £10m Eversheds, appointed a new CEO Revenue: £40.2m (+22%) investment from BGF in 2018, this July in the form of former Net profit: 5.2% Staff: 146 this Newbury-based outfit HCL bigwig John Hancock. recently acquired Citrix and This unified comms reseller Oracle partner Esteem Systems, Natilik recently rebranded from Elitetele. propelling revenue run rate to 99 com to Elite Group to hammer the £80m mark. Recently filed Revenue: £40m (+23%) home its recent diversification into accounts for holding company Roc Net profit: 5.4% Staff: 128 IT services. The Chorley-based Transformation show a net loss of firm has made 16 acquisitions £1.5m on revenues of £20.2m for

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Margin of terror Resellers have spent recent years attempting to counteract declining hardware and software margins by building out more profitable, services-driven revenue streams. Judging from our analysis of the top 100’s bottom lines, however, such efforts haven’t been enough to arrest falling profits – both as a percentage of sales and in absolute terms – over the last two years. The 92 firms that qualified for this analysis* banked collective net profits of £304m in their most recent financial years on record, equating to 2.4 per cent of their total sales of £12.5bn. That’s down from the £313m in net profits they racked up a year earlier, which equates to 2.8 per cent of their £11.1bn previous year’s revenues. Looking at it a different way, mean net profit margins among these 92 firms stood at 1.8 per cent, down from 2.9 per cent a year earlier. In order to eliminate outliers, we also looked at the median net profit. This measure also fell, from 2.1 to 1.6 per cent. From whichever direction it’s viewed, profits across the industry are down, at least when it comes to the net profit measure on which we have standardised. In last year’s Top VARs, when we standardised around operating profit, average (mean) margins fell from to 4.4 to 3.4 per cent, with the top 100’s collective operating profits also falling from £376m to £308m.

Margin distribution of the 92 firms that Median profit margins by company size

reported net profits 3.03.0 2018 2017 4 2.52.5 2.6% 19 10-20% 2.3% 2.3% 16 2.02.0 5-10% 3-5% 1.8% 1.51.5 1.6% 9 2-3% 1.4% 1.01.0 18 1-2% 0-1% 11 0.50.5 18 Loss-making 0.00 Top 20 21-50 51-100

*Eight Top VARs were excluded from this analysis. WWT and SHI don’t report any UK numbers; BT, KCOM and Capita don’t split out net profits for their relevant divisions; and PCM hasn’t yet reported numbers that show a full year’s trading. We also opted to display EBITDA numbers for Daisy and Six Degrees due to the way they are financed. the six months ending 31 March 31 December 2017. Trams put This Cisco and Microsoft partner 2018 – numbers annualised its improving numbers down to endured a five per cent revenue for this profile. Roc’s operating continued growth in storage and slump during its year to 31 May company made a profit of £5.4m. its own in-house cloud services 2017 as its strategy of pursuing for the management of desktops, services resulted in lower tablets and smartphones. During equipment sales. Although gross 96 Trams the year it acquired media margins rose, net profits fell from Revenue: £40.5m (+16%) technology solutions specialist £850,000 to £674,000 as foreign Net profit: 1.7% Staff: 45 NMR Consultancy. exchange losses stemming from Brexit weighed on its bottom line. Despite grumbling about falling Boasting offices in Leatherhead, computer prices and margins, 95 Cisilion Heron Tower in London, New this London-based Apple reseller Revenue: £40.7m (-5%) York and Hong Kong, Cisilion managed to grow both its top Net profit: 1.7% Staff: 98 recently promised further global and bottom lines in its year to expansion.

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year to 31 December 2017 show company Icomm at the start of the 94 Ampito Group revenue climbing 12 per cent to year hit its first-half performance. Revenue: £40.8m (+60%) £41.6m, with £15.8m of that total Probrand recently launched an Net profit: 11.2% Staff: 36 coming from the UK. Net profits online B2B marketplace designed hit £488,000. to ensure it stays relevant in the This highly profitable Gatwick- industry. It claims the platform based IT and comms provider Intercity Technology was instrumental in driving a 22 re-enters Top VARs this year on 91 per cent rise in revenues in the the back of a 60 per cent annual Revenue: £41.7m (+4%) first half of 2018. growth spurt. Founded in 2006, Net profit: 6.1% Staff: 219 Ampito trades through a number of subsidiaries, including Vanix, With a heritage in the mobility 88 Nine Telecom Object Source and Appcelerate, space, this Birmingham-based Revenue: £43.7m (-6%) and boasts offices in locations firm is seeking to reposition Net profit: -1.9% Staff: 107 as far flung as New York, Hong itself as a “complete technology Kong and Kenya. Net profits for its service provider”. Organic growth This Gloucestershire-based year to 30 September 2017 nearly across unified comms and IT telecoms provider sells direct to doubled to £4.6m. ensured revenues for its year to customers and through resellers. 31 December 2017 grew four per With its 2017 results overdue, Solid Solutions cent to £41.7m. Since its year we’ve annualised old accounts 93 end, Intercity has sold its Dutch covering an extended 18-month Revenue: £41.3m (+36%) business as it looks to focus period to 30 June 2016, which Net profit: 11.2% Staff: 182 growth on the UK market. showed revenues of £65.6m, compared with £46.7m for the Billing itself as the largest Hardware Group previous 12 months. It also slipped UK partner of CAD vendor 90 to a £1.3m net loss. But Nine Solidworks, this Leamington Revenue: £41.8m (-7%) said it “maintained strong sales” Spa-based outfit saw annualised Net profit: -10.2% Staff: 137 during the period as it pointed to revenues soar by over a third in its write-off of a bad debt as one its most recent accounts, which This Swindon-based Juniper reason for its profit woes. covered a truncated nine-month Networks, Dell and HP partner period ending 31 December 2017. specialises in complex network Its numbers were bolstered by its solutions and counts service 87 Printerland acquisition of fellow Solidworks providers, e-tailers, universities, Revenue: £44.5m (+20%) reseller, NT Cadcam, for £5.5m in airlines and online gaming firms Net profit: 7.9% Staff: 47 August 2017. Solid Solutions has among its clients. Parent company 18 UK and Irish regional offices. Hardware Holdings saw net losses Billing itself as the UK’s largest narrow from £5.2m to £4.2m and printer and consumables reseller, Kinly (formerly Viju) revenues slide seven per cent in its Printerland saw revenues jump by 92 year to 31 March 2017. Although a fifth to £44.5m in its year ending Revenue: £41.6m (+12%) international sales generate almost 31 March 2018. Net profits shot up Net profit: 1.2% Staff: 152 half of the total, Hardware Group from £2.7m to £3.5m. Harbouring scaled back its US operation at the a goal of exceeding £1m of revenue Private equity house Avedon start of 2017. per employee, the Cheshire-based claimed in September 2017 firm expects to break through that it had created a leading the £50m revenue barrier in fiscal global audiovisual and 89 Probrand 2019, driven by growth in its collaboration provider with its Revenue: £42.2m (+3%) managed print division. double acquisition of Viju and Net profit: -0.3% Staff: 131 VisionsConnected. A new brand TET identity for the duo, Kinly, was This Birmingham-based VAR 86 unveiled in February 2018. The fell to a £135,000 net loss in its Revenue: £45.7m (+28%) Microsoft Surface Hub and Cisco year to 31 December 2017 as it Net profit: 1.5% Staff: 44 partner’s UK accounts for the admitted its merger with sister

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Q&A: Neil Muller, Timico Newly appointed CEO on joining the £50m-revenue, private equity-backed managed services provider Your previous roles include UK MD of What are your ambitions for Timico? Computacenter and CEO of Daisy. How does this As you would expect, we are highly ambitious but challenge compare with your previous roles? the results (and the growth of the business) will be There are similarities from both a capability and defined by us delivering on our customer promises platform perspective, with differences from a target in the UK mid-market. As with any private equity- customer and company size point of view. Timico is backed organisation, Horizon Capital will look to wholly focused on enabling the growth of deliver shareholder value and returns and that, of ambitious UK mid-market customers course, is my job. I’d like to think I will be running through relevant IT, connectivity Timico well into the long term, and I’m sure capital and cloud managed services. and ownership structures will evolve along the way. I continue to be a fan of the “ever-converging” world of IT, Timico just announced its acquisition of 25sevenIT, telecommunications and cloud, its first purchase since Horizon Capital bought a so capability-wise majority stake for £50m in February 2017. How Timico is right in my does it fit into the acquisition strategy? sweet spot. 25sevenIT adds a significant quality of mid-market I also continue customers to the base and enhances the IT to believe that this capability from a skills point of view. The 25sevenIT business segment colleagues will join the Timico team, making it is being wholly around 300-strong at present. Our growth strategy underserved over the next 18 to 24 months will be a combination within the of organic growth and M&A activity with the support converged world. of Horizon Capital.

This London-based reseller by schools left its mark on this intent on branching out from admitted that results for its year education-focused reseller’s results its heritage as a comms VAR, to 31 March 2018 were “mixed” as for the year to 31 March 2017, as acquiring Citrix and Microsoft its small US arm failed to match revenues dipped eight per cent partner Shift F7 in August 2018 the “outperformance” achieved and net profits halved. During before changing its name from by its UK business, which was the year, Oxfordshire-based AdEPT Telecom to AdEPT established in 1985. Total revenues European Electronique claimed Technology Group on 2 October. rose 28 per cent to £45.7m, but that it invested heavily in its core In its fiscal year ending 31 March net profits fell from £1.1m to vendors including HPE, Aruba 2018, AdEPT saw revenue rise by £688,000. During the year the HP and Fortinet, adding that its 35 per cent to £46.4m. This was and NetApp Gold partner, whose own-branded Freedom cloud more than matched at the bottom full name is Trans European offering now services more line, as net profit hiked from Technology, moved its HQ to than 100,000 users across 75 £2.7m to £3.9m. It claims to have Charterhouse Street. institutions daily. over a million Office365 users.

85 European Electronique 84 AdEPT Technology Group 83 CSI Revenue: £46m (-8%) Revenue: £46.4m (+35%) Revenue: £46.4m (+19%) Net profit: 0.3% Staff: 140 Net profit: 8.5% Staff: 179 Net profit: 2.5% Staff: 168 A lack of investment in technology This AIM-listed outfit is clearly CSI chief executive Simon Payne

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Laughing all the way to the bank Which firms banked the most net profits, and how does that compare with the previous year? Most recently reported year

£55m £41.2m £28.7m £22.6m £21.6m £14.8m £12.9m £12.6m £9.6m £8.9m Softcat Computa- CDW BJSS Telent Avanade RM SCC CACI ANS center Previous year

£44.9m £40.1m £34.8m £32.2m £16.2m £14.8m £12.2m £11.6m £9.8m £9m Computa- Softcat CDW Telent BJSS SCC Blue Chip RM Avanade Apogee center told CRN in February that this also rose from 59 to 66. Net profits IBM and SAP partner’s revenue 81 Blue Chip Customer fell from £361,000 to £315,000. run rate now stands at £57m Engineering It sells to businesses, the public following its acquisition of Revenue: £47.1m (+6%) sector and education, as well as struggling rival Niu Solutions, its Net profit: 8.6% Staff: 242 consumers. first deal since taking on fresh private equity investment in Founded in 1987, this IBM RedstoneConnect 2017. In its year to 31 December maintenance specialist claims it 79 2017, the London-based managed manages 10 per cent of the UK’s Revenue: £47.6m (+15%) services specialist saw revenues banking traffic from its tier- Net profit: 3.2% Staff: N/A clamber 19 per cent to £46.5m as four datacentre. A new holding its purchase of APSU fed into its company for the Bedford-based RedstoneConnect holds the top line. Net profits, however, fell firm reported revenues of £47.1m distinction of being the only firm from £3.2m to £1.1m. in the year to 30 September 2017, in this report that no longer exists. up six per cent on an adjusted The AIM-listed outfit rebranded basis. Net profits fell sharply as SmartSpace Software in July 82 Bechtle to £4m, however, as Blue Chip 2018 following the sale of its Revenue: £46.8m (+29%) admitted that a change in its managed services and systems Net profit: 3.2% Staff: 57 revenue mix in favour of managed integration activities to Excel IT services stunted margins. in May. It now focuses solely on The UK arm of this Germany- developing its own occupancy headquartered reseller behemoth PC Specialist management software, an activity enjoyed a decent year, with 80 that generated just £5.3m of its revenues powering up 29 per Revenue: £47.6m (+8%) £47.6m revenues in its year ending cent and net profits hopping Net profit: 0.7% Staff: 86 31 January 2018. from £1.2m to £1.5m. The wider Bechtle business operates 70 This Wakefield-based PC builder MCSA “system houses” in Germany, enjoyed another year of solid 78 Austria and Switzerland, as well as growth as rising demand for Revenue: £49.2m (-18%) e-commerce businesses in some its custom devices fuelled an Net profit: -4.9% Staff: 133 14 European countries, turning eight per cent sales rise in the 12 over €3.6bn in its last financial months ending 31 August 2017. This Buckinghamshire-based year and employing more than The average number of production multi-vendor support specialist 8,000 staff. and warehouse staff it employed stumbled to a £2.4m net loss

8 CHANNELWEB.CO.UK CRN TOP VARs 2018 in its year to 31 March 2017 as design. Despite referencing a number of exceptional costs, 75 Millgate “difficult market conditions”, including a settlement with Revenue: £50.1m (+14%) the Cheltenham-based business HMRC, weighed on its bottom Net profit: 1.3% Staff: 116 packed an extra £8.3m onto its top line. Revenues also tanked by 18 line in its year to 31 January 2017 per cent, which it attributed to This Sheffield-based reseller thanks to a combination its “planned withdrawal” from broke through the £50m revenue of organic growth and its low-margin business. The Huawei, barrier in its year ending 31 July acquisition of Wiles Greenworld. HPE and Fujitsu partner claimed, 2017 on the back of 14 per cent Net profits fell slightly to however, that actions it has taken growth. The impact of currency £816,000. during the year will set it up well movements stemming from the for the future. Brexit referendum squeezed its Proact margins, however, causing net 72 77 Viadex profits to shrink from £997,000 Revenue: £50.6m (-9%) to £654,000. Sister company Net profit: 4.2% Staff: 230 Revenue: £49.4m (+51%) Millgate Connect, a wireless Net profit: 1.9% Staff: 57 comms specialist whose numbers This storage integrator is in the are not included in this profile, minority in that it increased its This Surbiton-based VAR is one turned over £4.7m in its year to profit margins in its latest year, of the most globally diverse firms 31 December 2017. despite complaining that its in the top 100, having completed core business is coming under projects in 104 countries as far Options IT pressure from public cloud. Net flung as Tanzania, Cameroon, 74 profits came in flat at £2.1m in its Bahrain and Taiwan in the last Revenue: £50.4m (+38%) year to 31 December 2017, even 18 months. It climbs 20 places Net profit: 1.3% Staff: 172 as revenues slid nine per cent. in this year’s Top VARs courtesy Headquartered in Stockholm, the of a 51 per cent revenue boom in Despite being headquartered in wider Proact business employs its year to 30 June 2017, with just London, this managed service 800 staff in 15 countries and over half of that total generated and IT infrastructure provider claims to manage 100 petabytes overseas. This summer it opened to the global capital markets of data in the cloud. Key vendors a Dubai office and launched a joint industry now counts the US as include NetApp, Dell EMC, AWS venture with cybersecurity VAR its largest market. Revenues and Microsoft. Performanta. rose by 38 per cent to £50.5m in its year to 31 December 2017, 71 Axians 76 Sabio with £32m generated by its US arm and £16m by the UK. Revenue: £51.4m (-14%) Revenue: £49.5m (+14%) Net profits fell from £3.1m to Net profit: 3.8% Staff: 83 Net profit: 4.9% Staff: 234 £662,000. In October 2018 the company, which counts Brocade, Part of French engineering This Avaya Diamond partner HPE and Microsoft among its monster Vinci, Axians bills claims that 19 years of consecutive partners, opened an office in New itself as a high-performance growth have made it Europe’s Zealand. networking specialist and turns “leading specialist” in the support over €2bn globally. Its UK arm, and delivery of contact centre Commercial which has a laser focus on service technologies. An acquisition spree 73 providers and the public sector, bankrolled by its private equity Revenue: £50.5m (+21%) enjoyed a “solid year” to 31 house, Horizon Capital, helped Net profit: 1.6% Staff: 57 December 2017 despite revenues swell revenues by 14 per cent in falling 14 per cent. Net profits its year to 30 September 2017. Founded in 1991 by brother almost halved to £2m but the Since year end it has snapped up and sister Arthur Hindmarche Cisco and Juniper Networks analytics specialist Bright UK. and Simone Hindmarche-Bye, partner held up a rise in gross London-based Sabio’s clients Commercial offers everything profits as evidence that its pursuit include the AA, SSE and Liverpool from IT and managed print of a more service-driven model Victoria. services to stationery and interior is paying off.

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period to 31 December 2017, show to press, in the shape of former 70 Zones a net loss of £3.7m on revenues Daisy and Computacenter bigwig Revenue: £51.6m (+11%) of £8.6m, we felt it was fairer to Neil Muller (see our interview Net profit: -0.4% Staff: 71 rank PCM using a revenue run with Muller on p7). It has also rate figure based on the $17.3m just made its first acquisition Having acquired its way into (£13.3m) the UK operation turned under new private equity owner the UK in 2011, this US-based over in Q3 2018. Horizon Capital. Accounts for reseller’s local arm now turns over Timico’s new holding company, more than £50m, split roughly ProAV Steeple Topco, were overdue as equally between the UK and the 67 Top VARs was published, meaning EU. Although revenues grew 11 Revenue: £53.3m (-10%) we have had to fall back on old per cent in its year to 31 December Net profit: 3% Staff: 304 numbers – covering the year to 31 2017, it slipped to a small net loss December 2016 – for the purposes of £203,000, compared with a This Egham-based audiovisual of this profile. £1.6m profit the previous year. specialist recently opened its The HP, HPE, Apple, Dell and seventh UK office in Edinburgh, Cisco partner said it is currently and also boasts a presence in 64 NTT Data evaluating the benefits of Germany and China. In its year to Revenue: £57.1m (-2%) incorporating a separate business 31 March 2017, ProAV – which has Net profit: 0.9% Staff: 472 entity within the EU. a 25-year relationship with Barclays Bank – saw revenue dip 10 per cent A lack of new UK accounts Xeretec to £53.3m, although net profits means we’ve had to recycle last 69 widened from £1.5m to £1.6m. A year’s numbers for this Japan- Revenue: £52.6m (-6%) “smart home space” project for based Oracle, SAP and Salesforce Net profit: 5.3% Staff: 198 John Lewis’ flagship Oxford Street partner. NTT Data’s UK arm saw store is among the case studies net profits halve to £535,000 on Billing itself as Europe’s largest displayed on its website. revenues that fell two per cent to Xerox partner, Xeretec now claims £57.1m in its year to 31 March to employ over 250 staff across Focus Group 2017. In August 2018, parent 14 offices in the UK and Ireland. 66 NTT announced it would roll all A new holding company for the Revenue: £54.2m (+19%) its businesses, including NTT Wokingham-based firm, Xeretec Net profit: 7.6% Staff: 239 Data and fellow Top VAR NTT Group Limited, racked up net Security, into one giant entity profits of £3.2m on revenues of Selling direct and through a called NTT Inc. £61.4m in the 14-month period reseller channel, Focus works ending 31 August (we have across the voice, mobile, IT and annualised these numbers for this data arenas, and recently began 63 Stormfront profile). In 2016 it swallowed HP work on building a new 30,000 sq Revenue: £57.4m (+3%) print specialist Landscape Group. ft head office. The West Sussex- Net profit: -0.4% Staff: 316 based outfit said in its 2017 annual PCM report that it is looking to secure This Exeter-based Apple Premium 68 up to £25m of funding to make a Reseller’s latest results were hit Revenue: £53.2m series of acquisitions over the next by Apple’s decision to hoist UK Net profit: N/A Staff: 240 few years. Revenues last year hiked prices by up to a fifth in the wake 19 per cent to £54.2m, with net of the Brexit referendum. The This US reseller landed in the UK profits up 23 per cent to £4.1m. move led customers at its 23 with a bang in May 2017, quickly stores across the UK to buy fewer hiring scores of sales staff and Timico high-margin items, pushing making two small acquisitions, 65 Stormfront to a £212,000 net loss including Scottish Cisco partner Revenue: £55.7m (+6%) in its year to 30 September 2017. Provista (see our interview with Net profit: -3.7% Staff: 357 During the year, it took action UK MD Donavan Hutchinson on to cut its distribution costs by p12 for more). Although its first This mid-market MSP unveiled a reducing expenditure in its retail set of UK accounts, covering the new CEO as Top VARs was going stores and head office.

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In the war for talent, differentiate or die

Robertson Sumner’s MD Marc Sumner on how to search for the best talent

The UK IT industry has faced 1) Change how you approach the market and what a skills and talent shortage you’re able to offer the available talent. for a few years and this has Firstly, before businesses have even approached been particularly prevalent in the market, they’re spending a good amount of time 2018, especially in the reseller/ putting themselves in their candidates’ shoes and managed services space. This introducing benefits (home-based working, 30-plus doesn’t mean that VARs days’ holiday, innovative monetary incentives) to aren’t growing, in fact at differentiate their message to the market. Robertson Sumner we have 2) Fish in a different talent pool and grow your seen some massive success own talent organically. stories this year; the simple The second method resellers are adopting is to difference between the look in a different talent pool. Searching for a ‘book soaring and stagnant VARs is that the growing of business’ reseller candidate can take months, VARs differentiate themselves. which is time that most resellers just don’t have. Most VARs spend a lot of time identifying and Therefore VARs need to ask themselves: ‘If we can’t articulating how their products and services or get a billing reseller candidate on board, what’s the strategy differentiates them from the competition next best alternative?’ in order to attract clients. However, how much time Robertson Sumner has found four key pools is spent differentiating their offering or recruitment that businesses have targeted to keep up with their strategy to attract the best available talent? aspirational growth plans, which are laid out below. If UK VARs don’t start thinking about how they To conclude, whether you differentiate by offering can differentiate themselves, the talent pool will the talent market a truly bespoke offering or if you continue to shrink and this will eventually lead to decide to differentiate by targeting a different talent multiple VARs dying. pool, Robertson Sumner’s strong recommendation But how can resellers differentiate themselves in the in these current market conditions would be current market? We see two simple ways to do this. ‘differentiate or die’.

Who does this Talent pool well? (year-on-year Pros/cons revenues) Graduates Storm Technologies Storm and many other VARs target graduates to meet ambitious growth goals. (£81.7m > £93.2m) Graduates come into the business with limited experience but equally have no bad habits and, in cases such as Storm, have grown into credible account managers and the future management of the business as they are highly engaged with the business and its values. Apprentices CCS Media Apprentices come into a business with a lot of energy, low salary expectations (£153m > £180.2m) and are easily mouldable. If a firm has the resource to train and develop such talent, this is a brilliant method to bring through its future salesforce. Vendor or Vohkus There is less of a shortage of talent in the vendor and distribution markets, distribution (£64.4m > £67.1m) which can therefore offer a talent pool used to selling IT solutions with a full candidates understanding of the channel but lacking a book of business. If you can offer end-user training, it’s an easy transition for business and candidate. Sales Softcat Softcat has arguably seen the biggest amount of growth in the reseller experience (£832.5m > £1.08bn) space (over 1,000 per cent growth in the last 12 years) and it has done outside the this by aggressively hiring candidates who fit the culture regardless of their IT industry background. This strategy has led to growth over 50 straight quarters.

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Q&A: Donavan Hutchinson, PCM

PCM’s UK managing director opens up on its first year’s trading on this side of the Atlantic and his aspirations of being a top 10 player PCM set up shop in the UK in May 2017. How did challenges we face is being the unknown within the first year of trading go? the marketplace. But we have now defined who Although we launched in May last year we didn’t we are as an organisation and have been able to start physically trading until much later in the year, create a robust offering spanning six pillars: product when our systems were implemented. Our first and volume business; cloud; networking; security; 12 months of trading have been very exciting and datacentre; and the digital workplace. challenging as well, but in a positive manner. We’ve learned a lot about the UK industry and have so far What are your ambitions for PCM UK? been relatively successful in gaining market share. We certainly have high aspirations, and want to be part of the top 10 [of CRN Top VARs]. We want How many staff do you now have? to grow rapidly but how long that will take, who We have just over 200 people in the UK, but we knows? Our aspiration is to take market share have more joining us. We also and be chosen by customers to be their digital have about 40 people in Manila transformation partner of choice. There is a lot of supporting the UK. untapped opportunity for us, particularly around the public sector as we’ve not been on the frameworks. What has been the most challenging aspect of getting Which of your peers do you most respect, and for a UK business off the what reason? ground from scratch? I have a lot of respect for Softcat as they’ve grown Like any start-up, organically and their market cap is exceptional. I it’s always going to also have a lot of respect for other organisations that be tough. One of have come to the UK and put a stake in the ground the most difficult and achieved exponential growth, such as CDW.

62 Academia 61 Annodata 60 NG Bailey IT Services Revenue: £60.1m (+26%) Revenue: £60.5m (+1%) Revenue: £60.7m (-20%) Net profit: 0.7% Staff: 103 Net profit: -2.7% Staff: 311 Net profit: -0.7% Staff: 415 Concerned that its brand name This Hertfordshire-based Part of facilities management implies that it sells only to managed print, comms and firm NG Bailey, this networking schools, this education specialist IT provider has aligned its specialist posted a 20 per cent launched a new unit – Atama financial year to match that of drop in revenues and a small – this April in order to target new Japanese parent Kyocera. net loss in its year to 2 March the commercial space. The Losses for the nine-month period 2018 as it complained of turbulent London-based Apple, Jamf, HP ending 31 March 2017 hit £1.2m, conditions within the structured and Microsoft partner enjoyed compared with a £4.4m profit a cabling market. During the a barnstorming year to 30 June year earlier, as investments in its year, the Cisco partner racked 2018, as revenues rocketed by 26 ICT capabilities and one-time up a whopping £1.7m in per cent and a net loss of £70,000 loyalty bonuses associated with exceptional costs related to its last year was reversed to a profit the Kyocera acquisition weighed restructuring efforts, and in of £399,000. In October 2018 on its bottom line. However, addition took a £200,000 bath it invested in fellow schools IT revenues rose by one per cent on relating to the liquidation of supplier Vital York. an annualised basis. Carillion.

12 CHANNELWEB.CO.UK CRN TOP VARs 2018 Home is where the VAR is Where all 100 Top VARs have their headquarters YORKSHIRE & THE (or UK headquarters in the case of the 22 HUMBER BJSS (West Yorkshire) international VARs) Insight (South Yorkshire) Harrogate (North Yorkshire) eBuyer (Lincolnshire) Kcom (East Riding of Software Box (North Yorkshire) Yorkshire) GCI (Lincolnshire) Banner (South Yorkshire) NG Bailey IT Services (West Buy IT Direct (West Yorkshire) NORTH-WEST Yorkshire) Millgate IT (South Yorkshire) BT Business Direct (Lancashire) Phoenix Software (North PC Specialist (West Daisy (Lancashire) 10 Yorkshire) Yorkshire) NCC Group (Manchester) GBM (Manchester) Scan Computers (Lancashire) 13 EAST MIDLANDS Chess (Cheshire) XMA (Nottinghamshire) Timico K3 (Manchester) CCS Media (Derbyshire) (Nottinghamshire) ANS (Manchester) Jigsaw24 PCM Printerland (Cheshire) (Nottinghamshire) (Northamptonshire) Elite Telecom (Lancashire) Total Computers Proact (Chesterfield) (Northamptonshire)

7

WEST MIDLANDS 6 SCC (Birmingham) Telent (Warwickshire) 6 Stone (Staffordshire) Probrand (Birmingham) Intercity (Birmingham) EAST OF ENGLAND Solid Solutions (Warwickshire) Computacenter (Hertfordshire) CAE (Hertfordshire) Storm Technologies 24 (Hertfordshire) Altodigital (Bedfordshire) Annodata (Hertfordshire) 29 Blue Chip Customer Engineering (Bedfordshire) 5

SOUTH-EAST LONDON Softcat (Buckinghamshire) NTT Security (Berkshire) CDW IDE Group SHI (Buckinghamshire) AVMI (Middlesex) Capita Academia Bytes (Surrey) Focus Group (West Sussex) WWT Zones Dimension Data (Hampshire) ProAV (Surrey) Avanade NTT Data SOUTH-WEST Apogee (Kent) Xeretec (Berkshire) Maintel Options IT Stormfront (Devon) RM (Oxfordshire) Axians (Hampshire) Six Degrees Sabio Commercial (Gloucestershire) Comparex (Middlesex) Viadex (Surrey) Claranet Redstone Connect Bechtle (Wiltshire) SoftwareONE (Surrey) MCSA (Buckinghamshire) CACI CSI Nine Telecom (Gloucestershire) Bell Integration (Hampshire) Adept Technology Group NSC Global TET Hardware Group (Wiltshire) Logicalis (Berkshire) (Kent) Getronics Kinly Ultima Business Solutions European Electronique Cloudreach Trams (Berkshire) (Oxfordshire) Itelligence Natilik OCSL (West Sussex) Ampito (West Sussex) Centerprise (Hampshire) Cisilion (Surrey) OneCom (Hampshire) Roc Technologies (Berkshire) Vohkus (Hampshire) Electrosonic (Kent)

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Q&A: Edward Cook, AVMI The CEO of the largest audiovisual specialist in this report explains why Brexit is driving its international growth What would you pick out as the key driver for the considerably above anyone else. I think the market growth you have seen in the last year? is moving in our favour. Because AV has become We are seeing the shake-up that is being caused by mainstream, big corporates are looking for big Brexit, meaning that our big clients are opening up suppliers. new offices in quite a major way and we expect that We now have 490 staff, but the fact that amazes to carry on right through the Brexit transition. everybody is that 250 of those are in our services Our client space is particularly strong in the department, either on-site running the AV systems, or financial services area, so a lot of our big banking service engineers doing more traditional support. We clients are considering the implications of Brexit and certainly feel that is a big part of our success. are all looking at moving staff to Dublin, Frankfurt and Paris. On the back of that demand we decided Do you envisage more consolidation in the market, we needed to have a local capability in Dublin. and are you on the lookout for further acquisitions? We have now made nine acquisitions so we always AVMI is now the largest AV have our eyes open, and we have always had provider in the UK. What do success with acquisitions. If one is going to play on you think has contributed to the global scale, organic growth takes too long. You you holding that position? want that as well, but the opportunity is now. With Focus21 (which AVMI acquired earlier this year) Are there any emerging technologies or trends you we are now well over £75m expect to become more prominent in 2019? turnover, so unless some of We think Zoom is going to make a big impact on the the competition have had some mobile videoconferencing space, and we have spent amazing growth – which they the last year getting fully up to speed on that, so might have done – I we’re now an authorised integrator. We are seeing think that we are quite big interest in that from our large corporate clients.

59 ANS 58 AVMI 57 IDE Group Revenue: £62.7m (+36%) Revenue: £64.2m (+13%) Revenue: £65m (+50%) Net profit: 14.2% Staff: 260 Net profit: -1.7% Staff: 410 Net profit: -17% Staff: 519 A lack of new accounts for this This audiovisual integrator claims Built through a series of quick-fire Manchester-based Cisco Gold it is seeing growing demand from acquisitions, this mid-market MSP and Advanced AWS partner customers that are relocating is now being dismantled just as means we have had to recycle activities to European locations in rapidly under new CEO Ian Smith, last year’s numbers, which response to Brexit (see interview who upon his appointment in showed a net profit of £8.9m on with CEO Edward Cook, above, for September declared the firm had revenues that rose 36 per cent to more). In its year to 30 June 2018, been heading for insolvency under £62.7m for its year to 31 March revenues hopped 13 per cent to the previous management. IDE 2017. Last December, ANS £64.1m, with £6m of that drawn sold 365 ITMS for £3m in October, acquired cloud transformation from outside the UK, while net leaving it with two remaining and application development firm losses narrowed to £1.1m. The businesses in Selection Services Webantic. It now claims to have Sunbury-on-Thames-based firm and C4L. The fire sale comes after more than 300 Microsoft and reignited its M&A engine in May the AIM-listed Cisco partner AWS certifications, equal to its by acquiring £10m-revenue rival swung to an ugly £11.2m loss for tally of customers. Focus 21. its year to 31 December 2017.

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Q&A: Matt Riley, Daisy

The Daisy founder talks to CRN about why he has opted to take a more active role in the business after the converged comms giant missed its revenue targets You ended your fiscal year with revenues of £684m conversations with a number of potential investors and adjusted EBITDA of £127m. Was that in line which helped us evaluate the current strengths with expectations? and weaknesses of the business. There are lots of No, this wasn’t our original expectation. While we different ways for us to realise value, and at the missed our overall revenue number, our EBITDA moment our focus is on bedding in the new structure performance was strong and importantly, we and growing the business. delivered high levels of recurring revenue. We understand the reasons behind the miss, and we What are your plans for the next year or two? have since made changes to the structure of the Our focus is on capturing the growth opportunities business, including giving more autonomy to the being driven by the demand for technology we see divisions. This will better enable them to drive future in UK business – for example, the shift to the cloud, revenue growth. or the need to enable more flexible workforces. By 2023, the UK addressable market for converged IT What made you decide to take a more active and telecoms will be worth £39bn, up from £33bn role in Daisy this summer, and why has Daisy in 2015. reportedly shelved plans for a trade or private equity sale? Discussions to buy TalkTalk’s Direct B2B For the last three years, as non-executive chairman, business fell through in June. How important are my role has been supporting the team in integrating acquisitions for Daisy going forward? the acquisitions and developing our strategy as The potential TalkTalk deal was at an early stage and well as our range of products and services. We announced because of its listing requirements. It is a are in a strong position - Daisy is the number one good business, but once we were able to look at it in independent business communications, IT and cloud more detail, we felt it was not the right fit for us. services provider in the UK. Acquisitions are always difficult to get over the line Our scale has benefited us on the one hand in but a big attraction of Daisy is our track record of terms of product development and pricing, but I successful completion and integration. believe our existing group structure has slowed This means I would expect lots of down our decision making and the speed at opportunities to present themselves which we work. Working at speed was one of the moving forward, which we will hallmarks of the business I founded. The market is evaluate on their merits. We will moving incredibly quickly and we need to be more continue to look for smaller deals responsive. such as recent acquisitions Voice So I want the Daisy divisions to have more Mobile and DV02, but our main autonomy to better focus on the specific needs of focus is on organic growth. their customers. The MDs of each division now have We wouldn’t rule out any deal if we greater control to shape the strategy and approach, thought it could add value; and I chair their monthly board meetings, working however, that is increasingly with them to set the right targets and plans. We have a high bar. I don’t think we no need for a traditional group CEO role. will be as acquisition-led In terms of the reported sale process, any private as we have been in the business like ours with different investors will past, which reflects the occasionally look at what is the most appropriate greater maturity of the shareholder structure going forward. We had positive business.

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NTT Security including consulting, managed an additional £3m onto its top 56 services and training, NTT Data- line in its year ending 31 May Revenue: £65.3m (-10%) owned Itelligence claims it leads 2017 despite “streamlining” its Net profit: -11.7% Staff: 270 the way in new SAP technologies, sales team. Net profits fell from including S/4HANA digital core. £358,000 to £288,000, however, Change is in the air at this as an investment in a sleek new cybersecurity integrator – Cloudreach website and the relocation of its formerly known as Integralis 53 London sales office pushed up – after Japanese parent NTT Revenue: £65.9m (+43%) overheads. In May 2018, mid- announced in the summer that Net profit: -11% Staff: 265 market-focused Vohkus bagged it is combining it with its other Titanium partner status with companies into one mammoth Having acquired two US firms Dell EMC. organisation named NTT Inc. since its majority buyout by NTT Security’s UK arm saw net Blackstone Equity in February OneCom losses widen from £2.5m to £7.6m 2017, this London-based cloud 50 on revenues of £65.3m in its year migration specialist now has Revenue: £71.1m (+19%) to 31 March 2017, results it told us its sights set on leaping into Net profit: 6.5% Staff: 356 reflect its recent reinvention as a Asia. A poster boy of the AWS “centre of excellence” for the other channel, Cloudreach saw revenues Hampshire-based OneCom claims NTT companies. power up 43 per cent to £65.9m it is Vodafone’s largest enterprise in its year to 31 July 2017. Net partner, managing 325,000 mobile Total Computers losses widened from £1.1m to connections. Revenue rose 19 per 55 £7.1m, which it said reflected cent in its year to 31 December Revenue: £65.5m (+26%) its investment in future growth. 2017 thanks to a mixture of Net profit: 2.2% Staff: 111 During the year it withdrew from organic growth and its hiving the Salesforce market. up of recent acquisition, fellow This Kettering-based reseller Vodafone partner Evolve Telecom. continues its march up the Top Getronics However, it admitted that the VARs rankings after a growth in 52 EU’s abolition of roaming charges big-ticket deals helped it swell Revenue: £66m (+26%) hit its bottom line as net profits revenues by more than a quarter Net profit: -5.5% Staff: 512 shrank from £7.5m to £4.6m. in its year to 31 December 2017. Revenues hit £65.5m, meaning it This IT services firm’s 2017 UK Altodigital has quintupled in size since 2010, accounts were overdue as we 49 with net profits also bulging from went to press, so we have had to Revenue: £71.2m (+10%) £953,000 to £1.4m. Total moved fall back on old numbers for its Net profit: 0.6% Staff: 492 into new digs and was awarded year ending 31 December 2016, Platinum partner status with HP which showed a net loss of £3.6m Altodigital declared a £13.5m during the year. on revenues that rose 26 per cent dividend to CEO, James Abrahart, to £66m. Globally, Getronics is to facilitate his return into active Itelligence in growth mode, snapping up US management of the Leighton 54 MSP Pomeroy in July in a move Buzzard-based print and copier Revenue: £65.7m (+10%) that propelled its turnover player in its elongated financial Net profit: 6.3% Staff: 254 beyond $1bn. It now has 9,000 year covering the 18-month staff and 2,800 active customers period ending 30 September 2017. With revenues approaching worldwide. He recently told CRN that rival €900m and 7,000 employees, Apogee’s acquisition by HP on Germany-based Itelligence is one 1 August 2018 left it as the UK’s of SAP’s largest partners globally. 51 Vohkus largest independent office and Its UK arm hit £65.7m revenues Revenue: £67.1m (+4%) technology provider. Revenue in its year to 31 December 2017, Net profit: 0.4% Staff: 130 (which we have annualised for a 10 per cent rise. UK net profits this profile) hit £106.8m during inched up from £3.9m to £4.2m. This Southampton-based HP the period, a 10 per cent rise on an Offering a range of services and Vodafone partner packed adjusted comparison.

CHANNELWEB.CO.UK 17 CRN TOP VARs 2018 The year in quotes

“Our aim is to expand our cloud and “We are technically the largest managed services independent office technology provider business and because we don’t have a private equity this requires or venture capital company [backing international us], so we are always going to be a structures.” target in a consolidation market.” Thomas Volk, CEO of Altodigital CEO James Abrahart told CRN in German reseller giant September that the 49th-ranked Top VAR has Cancom, explained no intention of following his rationale for in the footsteps of rival acquiring 44th- Apogee by selling ranked Top up, despite claiming VAR OCSL in it receives “lots of August. approaches”.

“If you’re really going to get close to your “We are certainly ambitious enough clients and understand their true business to get beyond £500m revenues – and challenges, that’s not a then some – but what you’ll see is a conversation you want really heavy focus on net return on that to have over the phone revenue. My feeling is that working – you want to sit down towards – over time – three per cent of and talk face to face.” net revenue would for me say that we have a performance Emma de Sousa, UK VAR criteria.” managing director of Insight, explained to CRN in May Lee Hemani, CEO why the eighth-ranked of XMA, told CRN in Top VAR has three August about his plans times as many staff to turn the tenth-ranked in the field as it had Top VAR into a three years ago. ‘performance VAR’.

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“We are in a digital transformation era, “Stay focused and carry on being who and I think history will remember the you are. He is a great guy so [he should] period 2017 to 2020 just like we view the let that personality shine through and do Stone Age and Bronze Age.” things his way. But also respect the past and the winning formula.” Rafi Razzak, founder of 48th- ranked Top VAR Centerprise, Former Softcat CEO Martin reflected on the pace of Hellawell offered some tips change the IT industry is to successor Graeme currently undergoing as Watt ahead of he told CRN he would his arrival at the be stepping back second-ranked from the day-to-day Top VAR in April. running of the firm.

“In the early days of cloud, some predictions envisioned a future of dwindling datacentres and hardware needs. So far, that hasn’t been the case, as SHI’s cloud and datacentre businesses have been growing in tandem.” SHI CEO Thai Lee asserted in November that hybrid cloud is the order of the day as the 12th-ranked Top VAR announced that its global sales surpassed $7bn in the first nine months of 2018, up 18 per cent.

“If we make this a successful business and it does well, people will say ‘well done’, and if it goes wrong people will “What I hear from the general market chastise us. I can’t believe there will is that the general reseller space is be a situation where people say ‘oh slowing.” sh*t, if only you’d got it for $10m less, it would have been a good deal’. That Jim Kavanaugh, CEO of ninth-ranked Top will not happen.” VAR WWT, told CRN in October he felt Talking to CRN in October, traditional VARs that Computacenter CEO Mike haven’t moved into Norris claimed the number- services will struggle as one ranked Top VAR’s growth cools and more $90m takeover of US IT consumption VAR Fusion Storm moves to cloud. represents good value for money.

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Year ends 35

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5

0 30 31 30 31 31 28 31 30 31 30 31 31 30 31 30 31 31 28 31 30 31 30 31 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 2016 2017 2018 Estimate Run rate The vast majority of the headline revenue figures in this report are drawn from the last UK annual accounts filed on Companies House by the firm in question, as of early November 2018. This covers a big spread of year ends, from 31 July 2018 in the case of Softcat, to 30 September 2016 in the case of Dimension Data. In four cases – WWT, SHI and BT – we have had to provide a revenue estimate based on market sources, while we have listed a run rate figure for PCM based on its most recent quarterly revenues.

Stone Group This Cisco Gold partner was 48 Centerprise 47 set up in 1997 with the aim of Revenue: £72.8m (+23%) Revenue: £73.6m (-13%) managing the global IT needs of Net profit: 2.7% Staff: 162 Net profit: 0.9% Staff: 197 large customers, counting PwC as an early client. Based in London Centerprise founder Rafi This PC builder’s decision to exit Bridge, it now has 26 global Razzak told us last December a lucrative Apple universities offices. For its year to 31 October that he would gradually hand framework – citing a lack of 2017, NSC’s UK arm saw revenue over control of the company to opportunity to add value – fuelled vault 12 per cent to £80.2m. Net newly appointed chief executive a 13 per cent drop in revenues in profits shrank from £4.1m to Jeremy Nash after spending 30 its year to 31 December 2017. But £3.3m as it ate £3.9m in finance years at the firm’s helm. Nash a net loss of £1.2m in 2016 was expenses resulting from foreign is a former RAF officer, which reversed to a £642,000 profit this exchange losses. plays to Centerprise’s heritage time. In May, Stone won a deal to in the defence and public sector supply Public Health England with K3 Business Technology verticals. For its year to 31 6,200 Toshiba and Lenovo devices. 45 August 2017, Centerprise Group Revenue: £83.4m (-6%) saw revenue vault 23 per cent, NSC Global Net profit: -16% Staff: 765 which it attributed partly to 46 an investment in its business Revenue: £80.2m (+12%) This Microsoft Dynamics and continuity and disaster recovery Net profit: 4.2% Staff: 232 Sage partner’s most recent annual business. results, covering an elongated

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17-month period ending 30 May 2018 by new private equity organic growth, without any November 2017, showed an majority owner Mayfair Equity outside investment, funding or eye-watering £13.4m net loss on Partners. debt. In its year to 31 March revenues that fell six per cent to 2017, Ultima’s top line nudged £118m (we have annualised these KCOM Enterprise closer to £100m, with revenues figures for the purposes of this 42 up one per cent, while net profits profile). But the AIM-listed firm, Revenue: £88.1m (-3%) rolled back from £1.5m to £1.1m. which now generates a fifth of EBITDA: 5.8% Staff: 87 The Microsoft, Citrix and revenues from its own intellectual VMware partner recently rolled property, is enjoying a brighter Hull-based telco KCOM’s systems out robotic process automation 2018 under new CEO Adalsteinn integrator arm, KCOM Enterprise, vendor Thoughtonomy across its Valdimarsson following efforts to has 87 staff and punts contact business. restructure and refocus. centre and cloud solutions to large enterprise and government 39 CACI 44 OCSL clients, including HMRC and Bupa. This unit saw revenue Revenue: £99.5m (+6%) Revenue: £85.9m (+9%) fall three per cent to £88.3m in Net profit: 9.7% Staff: 752 Net profit: 1.2% Staff: 217 KCOM’s year to 31 March 2018 due to an unexpected slowdown This technology services giant This West Sussex-based VAR in government business. Despite develops a wide array of its was on the receiving end of one incurring £5.3m in losses from own software, but also acts as of the year’s biggest acquisitions two software contracts it exited, a channel partner for vendors as it was grabbed by German KCOM Enterprise’s EBITDA rose such as Cisco, Qlick, Check Point reseller Cancom for £29m in from £4.5m to £5.1m. and NetApp. Headquartered in August. Cancom will use OCSL Delaware in the US, CACI is a as its new UK hub. It claimed that Storm Technologies $4.4bn, Fortune 1000 outfit, and the HPE and Microsoft Azure 41 its UK business is knocking on the partner generated revenue of “over Revenue: £93.2m (+14%) door of £100m revenues following £70m” in its last full financial year, Net profit: 2.1% Staff: 138 six per cent growth in its year to although the last accounts filed 30 June 2017. Since its year end it by OCSL on Companies House, This Watford-based firm describes has acquired two UK outfits in the covering its year ending 31 March itself as “one of the fastest-growing form of Spargonet Consulting and 2017, show a net profit of £1m on independent IT VARs in the Mapmechanics Software. revenues that rose nine per cent UK”, a billing it honoured in its to £85.9m. year to 31 December 2017 as its Redcentric revenue pogoed 14 per cent. Net 38 43 GCI profits rose by a similar margin to Revenue: £100m (-4%) £2m, while sales from mainland Net profit: 0.5% Staff: 501 Revenue: £86.7m (+67%) Europe nearly doubled to £5.5m. Net profit: -3.4% Staff: 398 The Dell EMC Titanium and HP This mid-market-focused MSP Gold partner said it intended to admitted it “didn’t sell enough” This Microsoft Skype for Business “significantly” expand its office during its fiscal year to 31 March partner expects turnover for and warehouse facilities in its 2018 as its revenues tumbled its current year to top £96m current year to support its growth. four per cent to £100m. But a as it continues to bed down cost-cutting drive, which saw it recent acquisitions, which Ultima Business Solutions trim UK headcount from 387 to include Outsourcery, Freedom 40 347, helped the AIM-listed firm Communications and Blue Chip Revenue: £97.6m (+1%) reverse a net loss of £2.4m in Data Systems. For its year to 31 Net profit: 1.1% Staff: 396 2017 to a profit of £511,000 this December 2017, revenue boomed time around. At the time of by 67 per cent to £86.7m, although This Reading-based VAR and press, Redcentric was hunting net losses widened from £923,000 MSP is among the minority a new leader after binning chief to £2.9m. GCI was gifted a of firms in this report to have executive Chris Jagusz following fresh £60m M&A war chest in built its business through pure poor 1H 2019 numbers.

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Claranet and Palo Alto Networks among privately owned IT and business 37 its growth vendors. Net profits consultancy. Revenues for its year Revenue: £101.2m (+7%) dipped by £300,000 to £1.8m. to 30 April 2018 mushroomed Net profit: 7.3% Staff: 459 The Watford-based firm, which 39 per cent to £116m, with net underwent an MBO in November profits swelling at a similar rate to This acquisitive, London-based 2018, recently celebrated turning £22.6m. Founded in Leeds in 1996, MSP continues to expand, and 25 by treating all staff to a BJSS’ clients include Waitrose, and now boasts a turnover of £325m, weekend break in Monaco. it is one of the largest suppliers 43 datacentres, 1,800 staff and on G-Cloud. Its core propositions 24 offices across Europe and include AI, digital transformation, Brazil. In its year to 30 June 2017, 34 Chess modern managed service and Claranet’s UK arm saw net profits Revenue: £110.3m (+25%) journey to cloud. shrink by £1.3m to £7.4m on Net profit: 3.5% Staff: 528 revenues of £101.2m. A deal to provide managed hosting for the Acquisitive Chess burst through 31 Logicalis micro-sites of Peugeot is among the £100m revenue mark in its Revenue: £116.6m (-24%) the case studies displayed on its fiscal year to 30 April 2017 and Net profit: -6.5% Staff: 435 website. was recently crowned the top UK workplace by the Sunday Times’ The UK arm of this Cisco, HPE Six Degrees Best Companies to Work For and IBM partner saw losses widen 36 2018. With a heritage in fixed-line to £7.6m in its year ending 28 Revenue: £101.6m (+25%) telecoms, Alderley Edge-based February 2017 as it continued EBITDA: 18% Staff: 539 Chess is seeking to re-invent itself to reel from the loss of a key, as a ‘unified solutions provider’ seven-year Welsh public sector Constructed from 20 acquisitions and in April 2017 leapt into the deal. Although revenues are over seven years, private equity- cybersecurity space by acquiring also on the slide, plunging from backed Six Degrees is striving Foursys, a deal it said would add £204m in 2014 to their current to be the UK’s top converged £11m to its top line. level, the directors said they managed services provider for remain “optimistic about future mid-market and large firms. Its prospects” as they detailed plans ultimate parent company, CB- 33 Scan Computers to restructure the firm. Part of SDG Topco, posted revenues of Revenue: £113.1m (+13%) South African IT group Datatec, £101.6m in its year ending 31 Net profit: 1.5% Staff: 228 Logicalis turned over $1.6bn March 2017, up from £61.1m in globally last year. the previous nine-month period, This Bolton-based PC builder and as its acquisitions of Carrenza e-tailer claims to ship 1,500 orders and Insite boosted its top line. a day with a success rate of 99 per 30 Jigsaw24 Although net losses widened cent. It enjoyed a bumper year to Revenue: £128.7m (+35%) to £44.9m on the back of hefty 30 June 2017 as revenues rose 13 Net profit: -0.1% Staff: 229 amortisation and interest charges, per cent to £113.1m and net profits EBITDA rose to £18.3m. widened from £1.1m to £1.7m. Billing itself as the “undisputed Its business division offers Intel leader in the B2B Apple reseller CAE and NVIDIA server solutions and market”, Nottingham-based 35 digital signage, among other things. Jigsaw24 performed a secondary Revenue: £103.9m (+9%) During the year it implemented a MBO in March. Its wackily named Net profit: 1.7% Staff: 242 workplace wellness strategy. parent, Insanely Great, smashed the £100m revenue barrier in its This Cisco Gold partner joined year to 30 May 2017 on the back the £100m-revenue club in its year 32 BJSS of 35 per cent growth, driven by ending 30 June 2018 on the back Revenue: £116m (+39%) Apple and associated services. of nine per cent annual growth. Net profit: 19.5% Staff: 775 However, it slipped to a £183,000 Two thirds of its £103.9m sales net loss as it ate an exceptional are generated by networking, This AWS and Azure partner charge related to 2014 acquisition with CAE highlighting Microsoft claims to be the UK’s largest Matrix Development Software.

22 CHANNELWEB.CO.UK CRN TOP VARs 2018

Bell Integration December 2017 falling short Avanade 29 of expectations at £133.1m. 24 Revenue: £129.9m (+17%) This included a 12-month Revenue: £145.5m (+22%) Net profit: 0.5% Staff: 328 contribution from Azzurri and Net profit: 10.2% Staff: 377 five months from Intrinsic, It was a busy year for this which it acquired in August Mirroring the fortunes of its Portsmouth-based datacentre 2017. But CEO Eddie Buxton sole vendor partner Microsoft, VAR as it snapped up IBM partner said in September that Maintel’s Avanade’s UK arm is enjoying a The Portal Partnership and IT and Avaya practice has enjoyed a growth spurt, with revenues for audiovisual rentals firm Hamilton “resurgence” as he unveiled its its year to 31 August 2017 soaring Rentals. The acquisitions added interim 2018 results. 22 per cent. Net profits increased £6.9m to Bell’s top line in its even more quickly, from £9.8m to year to 31 March 2017, as total SoftwareONE £14.8m. Globally, Avanade – a 50- revenues hiked 17 per cent on 26 50 joint venture between Microsoft an annualised basis to £129.9m. Revenue: £137.9m (+10%) and Accenture – has 30,000 Founded in 1996, Bell bills itself Net profit: 1.7% Staff: 141 staff and 24,000 certifications in as a datacentre, workload and Microsoft technology. cloud migration and optimisation This Switzerland-based software specialist, and has overseas licensing firm has endured an Buy IT footprints in Hyderabad and eventful year, with the untimely 23 Singapore. and tragic death of its founder Revenue: £146.5m (+21%) Patrick Winter in June preceding Net profit: 0.8% Staff: 322 Phoenix Software its blockbuster acquisition of 28 rival Comparex. KKR-backed This Huddersfield-based e-tailer Revenue: £130.3m (+10%) SoftwareONE finds itself one grew revenues by over a fifth in Net profit: 2.7% Staff: 163 place behind Comparex in this its year to 31 March 2017, but report, despite its UK revenues net profits virtually halved to This York-based software licensing for the year to 31 December 2017 £1.2m as a recent infrastructure outfit’s latest annual results cover rising by 10 per cent to £137.9m. investment hit its bottom line. an elongated 16-month period The Comparex deal will swell CEO Nick Glynne recently told us ending 28 February 2018 after it its global headcount to 5,500 that its 2018 numbers will show aligned its financial year end with members of staff. revenue of £182.3m, with most of new parent Bytes Technology the growth driven by IT sales. Its Group, whose principal subsidiary Comparex brands include Laptops Direct, ranks 13th. Revenues hit £173.7m, 25 Drones Direct and Furniture 123. equating to £130.3m on an Revenue: £143.7m (+68%) annualised basis – a 10 per cent Net profit: 0.9% Staff: 48 Banner leap year on year. Phoenix noted 22 that the sales models available Microsoft licensing giant Revenue: £153m (+114%) from vendors in its core software Comparex may have just been Net profit: 0.5% Staff: 243 business are continuing to switch gobbled up by rival SoftwareONE, from on-premise to hybrid or pure but when it comes to UK revenues Starting life 200 years ago when cloud solutions. it is now fractionally larger than it was part of Her Majesty’s its new owner after clocking up Stationery Office, Sheffield- Maintel growth of 68 per cent in its year based Banner claims it is now 27 to 31 March 2018. The fall in the UK’s largest reseller of Revenue: £133.1m (+23%) the pound means the UK has workplace products, holding stock Net profit: 2.3% Staff: 652 become a good location for in excess of £50m and making buying for some European and 18,000 deliveries from a fleet of The financial woes of Avaya global customers, Comparex 350 vehicles per day. It recently left their mark on the last set of noted in its annual UK accounts, launched a dedicated technology annual accounts of this London- adding that it centralised more website offering HP printers, Acer listed comms specialist, with support to Germany during the and Lenovo laptops and mobile revenues for the year to 31 period. handsets. Revenues for its year

CHANNELWEB.CO.UK 23 CRN TOP VARs 2018

to 31 December 2017 more than Where in the world doubled as it brought its Banner Top VARs has an increasingly international feel to it as overseas players and Supplies Team arms into one legal entity. Net profits rose from continue to flood into the UK market. £628,000 to £826,000. Some 23 of this year’s crop are headquartered outside the UK, with eight based in the US alone (see below). 21 Software Box (SBL) Revenue: £155.5m (+19%) US Net profit: 1.4% Staff: 126 8 SOUTH Known for its strong ties with JAPAN AFRICA 3 the Ministry of Defence, this UK 5 York-based Microsoft and Apple 77 partner has developed its own non-internet-reliant software

1 patch delivery service under THE SWEDEN the DOBUS brand. SBL enjoyed GERMANY NETHERLANDS “strong progress” in its year to SWITZERLAND 2 2 31 August 2017, with revenues 2 soaring 19 per cent to £155.5m and net profits coming in roughly flat at £2.2m. It has 69 services in The business of selling and servicing technology is, arguably, becoming G-Cloud 10 and references a deal more of a global game, leading to the emergence of a new ‘super-VAR’ to manage 25,000 mobile devices for DEFRA on its website. elite. The graph below shows the current annual revenues of some of the leading global players, and how much of their revenue they generate from the UK. 20 CCS Media UK portion: Revenue: £180.2m (+18%) £719m 1212 Net profit: 2.4% Staff: 420 Staff at this Chesterfield-based 1010 reseller now have the option of working from one of its 18 offices, £500m working from home, or a mixture 88 of the two, following its “largest ever” investment in technology. £285m For its year to 31 December 2017, £258m 66 £138m revenues pogoed 18 per cent to £502m £180.2m, and 1H sales of £109m

Revenue (£bn) Revenue put it on track to break £200m in 44 £1.5bn 2018. It now has close to 500 staff £47m and 14,000 customers. £144m 22 £591m £53m £117m 19 GBM Digital Revenue: £182.9m (-27%) 00 Net profit: 0.8% Staff: 55 SHI CDW WWT SCC PCM Insight Bechtle Billing itself as the UK’s largest Logicalis Comparex Apple Authorised reseller, SoftwareONE this Manchester-based outfit’s Dimension Data Computacenter revenues for its year to 31

24 CHANNELWEB.CO.UK CRN TOP VARs 2018

December 2017 slid 27 per cent Europe’s largest independent This global Cisco partner hasn’t to £182.9m. GBM Digital sells managed print provider was filed any new accounts for its to schools and businesses, but in acquired for £380m by HP on 1 principal UK arm, Dimension March it leapt into the consumer August 2018 in a deal HP’s CEO Data Network Services Limited, space when it opened a technology Dion Weisler has admitted was a since July 2017, meaning we’ve hub in Manchester city centre defensive move. had to recycle figures from last under the ‘Sync’ banner. It also Speaking at the recent Canalys year’s Top VARs. For its year to partners with Adobe, WatchGuard EMEA Channels Forum, Weisler 30 September 2016, net profits and Jamf Software. was at pains to point out that HP shrank from £8.2m to £2.9m will continue to run Apogee as on revenues that inched up one RM an independent entity, claiming it per cent to £258m. It recently 18 will get no special treatment. The discontinued its Advanced Revenue: £185.9m (+11%) Maidstone-based outfit is thought Infrastructure (DDAI) arm in the Net profit: 6.9% Staff: 1,734 to have around 11,000 managed UK, which had a £30m turnover. print devices in the field, 20 per South Africa-based Dimension RM’s heritage may be in building cent of which are HP branded. Data turned over $11.7bn globally PCs for schools, but it now In its year to 31 December in the 18 months to 31 March draws more revenues from its 2017, Apogee’s revenues virtually 2018, but Japanese parent NTT curriculum resources arm, RM doubled to £208.4m as a full-year is in the process of combining it Resources, than it does from contribution from Danwood fed with its other companies in a ICT. For its year to 30 November into its numbers. Its headcount new giant organisation dubbed 2017, RM’s revenues rose 11 per bulged from 424 to 1,125. NTT Inc. cent to £185.9m, but ICT arm RM Education, which supplies ICT NCC Group Bytes Software Services software and services to 7,000 UK 15 13 schools and colleges, saw sales slip Revenue: £233.2m (+8%) Revenue: £277m (+28%) eight per cent to £70.6m. Net profit: 3.1% Staff: 1,813 Net profit: 2.3% Staff: 266

eBuyer NCC’s CEO characterised its Software licensing powerhouse 17 fiscal year ending 31 May 2018 as Bytes recently told us it turned Revenue: £202.1m (+7%) a “year of recovery” as the London- over £305m in the first half of Net profit: 0.5% Staff: 228 listed cybersecurity consultancy its fiscal 2019, with acquisition continued to overcome the Phoenix Software weighing in This East Yorkshire-based e-tailer indigestion associated with recent with an £88m contribution. defied “competitive pressure” in acquisitions (including 2015 This profile covers only the electronics market to post a purchase Accumuli). principal arm Bytes Software 7.2 per cent rise in sales in its year Having swung to an ugly £39m Services (we have profiled Phoenix to 31 December 2017, with net net loss in 2017, NCC registered Software and cybersecurity arm profits roughly flat at £995,000. a £7.2m profit this time around, Bytes Security Partnerships However, it warned that Brexit with revenues rising eight per cent. separately), however, which saw is likely to “provide challenges”, It claims to have now completed revenues in its last full year ending stressing that it may not be able a rebalancing of its assurance 28 February 2018 vault 28 per to pass on the full extent of the arm away from single-transaction cent to £277m. Although Bytes “inevitable” price hikes associated reselling of third-party products SS complained that Microsoft’s with the impending event. Last and towards high-value activities. decision to hike UK prices by 22 October it launched a managed This bears out in its results, with per cent in January 2017 dented IT and cloud service aimed for products generating just £9.8m of its gross margins, net profits rose business customers. its £194m assurance revenues. from £5.5m to £6.5m. Since year end, the Leatherhead- Apogee Dimension Data based firm – whose parent 16 14 company Altron is listed on the Revenue: £208.4m (+85%) Revenue: £258m (+1%) Johannesburg stock exchange – Net profit: 1.6% Staff: 1,125 Net profit: 1.1% Staff: 621 has bagged a £150m deal to roll out Windows 10 across the NHS.

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SHI This Nottingham-based VAR ending 31 December 2017 thanks 12 recently bagged a monster iPad to a “strong performance” in its Revenue: £285m (+15%) education deal, which will see it public sector business. Hardware Net profit: N/A Staff: 160 deploy 50,000 devices and train sales led the way, swelling 23 per more than 4,500 teachers in the cent to £312m, while software With annual revenues north of technology. sales dipped from £185m to £173m $8bn and 4,000 staff, New Jersey- Chief executive Lee Hemani and services revenues jumped 28 based Microsoft partner SHI is the told us in August that XMA is per cent to £17m. This was more largest US minority and woman- shifting its focus from revenue than matched at the bottom line, owned business. to profit growth as it looks to as net profits widened from £5.1m Based on market sources, become a more services-driven to £8.1m. we estimate its UK arm, which “performance VAR”. In May, UK MD Emma de employs 160 staff in Milton For its year ending 31 December Sousa attributed the firm’s uptick Keynes and has been trading 2017, the Westcoast Group-owned in fortunes to its investment in for 20 years, boasts an annual outfit saw revenues rise 11 per field-based sales staff, revealing revenue run rate of about £285m, cent to £396.6m, with net profits that Insight now has three times 15 per cent up year on year. On hitting £4.9m, but the long-term as many staff in the field than it a global basis, SHI is enjoying a goal is to double profit margins had three years previously. barnstorming 2018, with first-half from 1.25 to 2.5 per cent. revenues rocketing 21 per cent to 7 Capita IT Services $4.6bn and its top four vendors 9 World Wide Technology – Microsoft, Dell, HP and Cisco – Revenue: £507.8m (+5%) all exceeding that figure. Revenue: £500m (+56%) Underlying operating profit: 15.4% Net profit: N/A Staff: 80 Staff: 4,300 Telent 11 This US-based Cisco, VMware, Capita may be best known for Revenue: £386.3m (-2%) NetApp, Dell EMC and HPE its public sector outsourcing Net profit: 5.6% Staff: 1,888 partner has more than 5,000 prowess, but the IT services staff and turned over $10.4bn in division which houses its This Warwick-based player 2017, making it the second-largest reseller brands, including bills itself as “the UK’s leading global reseller by our estimates. Microsoft licensing powerhouse mission-critical network solutions Sizing its UK business is Trustmarque, Pervasive Networks, provider”, and recently won a problematic since it does not Computerland and NTS, is a £450m deal to provide telecoms publicly divulge its local numbers, £500m-revenue monster. services to Highways England. It but at the time it opened its New CEO Jonathan Lewis set has also become a sizeable player Canary Wharf office in 2013, the tone for Capita’s year when he in the ICT channel through recent WWT said it was already warned in January that “significant acquisitions and was recently conducting $100m in business in change” would be needed to get crowned HPE UK and Ireland Europe. Based on market sources, the troubled giant back on track. Solution Provider of the Year. As we estimate its European revenue Three months later it unveiled it hasn’t filed any new accounts now stands at approaching $650m a £513m loss for its fiscal year since last year, we’ve had to fall (£500m), the lion’s share of which ending 31 December 2017. back on its annual accounts is drawn from financial service It was a similarly “variable” covering the year to 31 March and service provider customers 2017 for Capita IT Services as it 2017, which showed net profit in the UK. continued to address the “sales falling from £32.2m to £21.6m on and trading issues” that dogged its revenues that fell two per cent to Insight 2016 performance. £386.3m. 8 Underlying revenue rose Revenue: £502m (+11%) five per cent to £507.8m, with XMA Net profit: 1.6% Staff: 816 organic growth in networking 10 solutions and managed print Revenue: £396.6m (+11%) The UK arm of this global reseller services offset by declines in Net profit: 1.2% Staff: 470 behemoth smashed the £500m technology solutions, managed IT revenue barrier in its fiscal year solutions and major clients within

26 CHANNELWEB.CO.UK CRN TOP VARs 2018 enterprise services. But underlying and datacentre services rising one Having reportedly shelved plans operating profit bounced from per cent £138m, and integration for a £1bn sale this summer, Daisy £47.1m to £78.1m, which Capita activities pogoing eight per cent to is now intent on ploughing on with said reflected the benefit of a £36m. UK operating profits have organic and acquisitive growth restructuring drive and a £9m risen for five straight years. under its own steam (see interview one-off supplier settlement. Part of The Rigby Group, with CEO Matthew Riley, p16). whose interests span technology, Revenues for its year to 31 SCC aviation, real estate, hotels, March 2018, which include the 6 airports and finance, SCC also first full-year contribution of Revenue: £591.4m (+3%) operates in France and Spain, with Alternative Networks, fell short Net profit: 3% Staff: 1,622 offshore centres in Romania and of expectations, rising 14 per cent Vietnam. It boasts group revenues to £684.3m. EBITDA – which is The Birmingham-based channel of £1.8bn, and vendor alliances Daisy’s preferred profit measure bellwether halted a run of three with the likes of Cisco, IBM, (hence why we have taken the straight years of UK sales declines VMware, Microsoft, NetApp, special measure of displaying in its fiscal year ending 31 March Lenovo and Oracle. EBITDA in the headline of this 2018 on the back of an “excellent” profile) – however, powered up 31 second half. Daisy per cent to £127m. UK revenues rose three per cent 5 Having started life in 2001 as to £591.4m, with product supply Revenue: £684.3m (+14%) a supplier of lines and calls to revenues growing three per cent EBITDA margin: 18.6% Staff: 3,479 SMEs, the Lancashire-based firm to £417m, core managed services now has a diversified portfolio The top 100 in figures The £304m net profits banked by the top 100 would be almost enough to buy Leonardo da Vinci’s Salvator Mundi, the world’s most expensive painting sold at auction

At £1.8bn, their revenue growth At £15.7bn, the total revenues would be roughly enough to buy generated by the top 100 is equal both England and Spain’s entire to the GDP of Trinidad & Tobago World Cup football squads At £2.6bn, the combined market At 46,000, the number of staff Revenues and growth by size value of #1 and #2-ranked Top employed by the top 100 firms 88 VARs Computacenter and Softcat is equal to the population of 77 exceeds the predicted Yeovil in Somerset 66 spend for Black 55 Friday this year 44

£bn +12.6% 33 +13% 22 11 +13.9% 00 Top 10 11-50 51-100

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Q&A: Graeme Watt, Softcat

Softcat CEO on what he has changed since he took the reins in April and whether or not he expects market growth to cool You mentioned in your FY results statement that the commentary. There is some macroeconomic 2018 conditions were ‘exceptional’. Is that a hint uncertainty, some supply chain uncertainties around that you think growth might slow this year? Intel chip sets and whether AMD has the capacity to Some of the stuff we saw last year was exceptional. make that up, and some potential price rises coming We had some exceptional growth in our server out of the US-China trade wars. But how they will business, for example, which we wouldn’t affect the demand environment is not clear. necessarily expect to see this year; server There’s also a sense that the market was growth at Softcat was close to 50 per so good last year – we haven’t really seen cent. So you have to look at that and be the market growing at those rates for quite reasonable about it. a while – and there’s just a question of whether or not they can continue growing You opened an Irish office in August. at that rate. Where next for Softcat? If we do open another office in the next Can you give one or two specific 12 to 18 months, it will be in the UK and examples of changes you’ve made to how Ireland. I think there’s probably room Softcat operates since you became CEO? for at least one more regional office They’ve been small things really. I benefited but exactly where is to be from the advantage of coming into a determined. company that is operating very well and that was in the middle of an Softcat has never made exceptional year. Some of the things an acquisition. How likely I’m looking at is to understand what is it that you will acquire those critical success factors are in the next year or two? and to make sure they continue at Unlikely, unless something the same rate or even faster. remarkable happens or We’ve hit the first billion. As we changes. Our focus is move to the second billion, how do on organic – we’re not we protect that culture that is so focused on any M&A important to recruiting people, our targets right now. It’s a existing team, and our customers? strategy that has served We’re also looking at how to us very well – I mean, expand our addressable market. look at the results we’ve This year we’ve made some just published. And investments in cybersecurity we expect to expand and and cloud intelligence improve on them next year. services, and have invested in Ireland. But the focus Analyst Canalys recently remains on the UK and talked about how it expects Ireland for the foreseeable EMEA channel growth to cool. future, and on continuing What are your personal views? organic growth. We talk about I don’t know, and I think making white space purple, and that’s what’s driving some of we’ll continue to do that.

28 CHANNELWEB.CO.UK CRN TOP VARs 2018 and customer base, drawing 2015 acquisition of UK-based Twenty-five years after starting £127m of its sales from networks, Kelway by gobbling up one of life as a mail order software £167m from data, £200m from Europe’s ‘top 10’ largest channel company, and three years after systems, £147m from mobile and players within two years. listing on the London Stock £44m from business continuity; Exchange, Softcat has joined the and vendor partnerships ranging £1bn revenue club on the back of from Vodafone and O2 to Cisco, 3 BT 30 per cent growth in its year to Dell EMC, HPE, Microsoft and Revenue: £1bn 31 July 2018. VMware. Ninety per cent of its Net profit: N/A Staff: N/A Its total sales hit £1.08bn, with revenues are now recurring in software up 36 per cent to £564m, nature, up from 86 per cent year Calculating the size of BT’s hardware bulging 29 per cent to on year. reseller activities is now a guessing £367m and services rising 16 per game following its decision to roll cent to £151m. CDW a clutch of its relevant businesses This was more than matched at 4 – namely BT Business Direct, the bottom line, with net profits Revenue: £719.4m (+11%) Dabs, Engage IT and iNet – into ballooning by £16m to £55m. Net profit: 4% Staff: 1,086 the wider group. Since year end, Softcat has Totting up these various opened its first international office CDW UK has enjoyed an action- interests, as well as the IT product in Dublin, and now employs over packed 2018, bagging the largest resale and related services 1,100 staff. Customer numbers ever G-Cloud deal – in the form activities conducted by BT Global rose by 4.7 per cent to 11,900 of a £25.7m contract with the Services, BT Northern Ireland during the year. Department of Education – and (which has a stranglehold in the Despite this, CEO Graeme Watt snaring the title of Partner of the public sector) and various other struck a note of caution following Year with HPE. units, we would venture that BT the results in October, warning The UK arm of the world’s is a £1bn VAR juggernaut. that macroeconomic and supply largest IT reseller pierced the BT and EE officially turned chain uncertainties could see £700m revenue barrier in its year over £24bn last year, and with Softcat’s growth moderate in its to 31 December 2017 on the back convergence between comms and current year (see interview, p28). of 11 per cent growth. Net profit, IT only accelerating, we would however, rolled back from £34.8m be surprised if IT resale and to £28.7m. By revenue area, £336m related services doesn’t represent a Read on to find out which came from workspace solutions, growing chunk of that amount. £280m from datacentre and channel heavyweight £100m from services. 2 Softcat has bagged the coveted Canalys CEO Steve Brazier number one spot in Top recently predicted that NASDAQ- Revenue: £1.082bn (+30%) listed CDW, which turns over Net profit: 5.1% Staff: 1,130 VARs 2018... $15bn globally, will follow up its Surprising facts Mike Norris of #1-ranked Top VAR #35-ranked Top VAR CAE recently #22-ranked Computacenter is the longest- marked 25 years in business by taking Top VAR standing CEO of a FTSE 350 firm all its staff to Monaco Banner Group started off life 200 years ago as part of Her Majesty’s Stationery Office

CHANNELWEB.CO.UK 29 CRN TOP VARs 2018 1 Computacenter Revenue: £1.496bn (+9%) Net profit: 2.8% Staff: 4,210

Computacenter remains the of FusionStorm. The latter deal shortfall on “tough comparatives” UK’s Top VAR by a country will boost its US headcount to from Q3 2017, telling the FT he mile after its domestic business 1,000 staff and hand it its first was “supremely confident” that returned to growth in its US-only clients. Computacenter would have a latest financial year ending 31 Computacenter got off to a record 2018. “And we will do it December 2017. flying start in its fiscal 2018, with again next year”, he promised. The recent recipient of a ‘Boring first-half revenues powering up by Award’ for its monotonous profit 18 per cent and UK sales booming growth, the London-listed giant 30 per cent. In August, the saw group revenue soar 17 per company’s share price reached its cent to £3.8bn last year, with the highest value since the turn of the UK business generating close to century as chief executive Mike £1.5bn of the total – a nine per Norris (pictured) – who is the cent rise. longest-standing CEO of a FTSE UK operating profits tumbled 350 firm – pointed to “buoyant by 18 per cent to £38.3m, as a market conditions”. shift in the revenue mix towards But the reseller and IT lower-margin software deals and services powerhouse’s higher administrative expenses rapid growth faltered in its dented the bottom line. third quarter ending 30 Underscoring the scale of September 2018. Group its international ambitions, revenues fell three per cent Computacenter acquired Misco’s to £900m, with the UK’s Dutch arm in August 2018 contribution tumbling before making its maiden US nine per cent to £296m. acquisition in October in the form Norris blamed the

UK revenue: last five years Revenue breakdown

1.5 1.5 1.496 1.376 1.398 1.412 1.2 1.2 1.286

0.9 0.9 Managed services Datacentre and 24% Workplace 21% networking 18% £bn 0.6 0.6

0.3 0.3

0.0 0 2018 2017 2016 2015 2014 Professional Software 18% services 10% Resold services 9%

30 CHANNELWEB.CO.UK

CRN TOP VARs 2018 The VAR’s the star Aside from being one of the a market facing multiple new In fact, this year we have biggest injustices in football threats and challenges, including completely overhauled what history, the handball that the rise of new consumption questions we put to the more than eliminated Ireland from qualifying models, margin pressure, Brexit 300 respondents who took part in for the 2010 World Cup may and GDPR. the research. have irrevocably altered the Few would argue with the course of the IT channel, or at contention that the IT channel, VAR visibility least its lexicon. and 100 firms profiled in this The term VAR has always sat Thierry Henry’s undetected report, are undergoing a period of uneasily with many firms that sell, wandering paw is said to have intense upheaval, perhaps more so integrate and provide consultancy, helped fuel the case for the than at any time in decades. managed and professional services introduction of the VAR, or video Against this backdrop, this year’s around third-party hardware assistant referee, a technology that Top VARs end-user research has and software, but this January is currently being rolled out across gone back to basics and addressed detractors were given an added Europe’s top leagues. the very foundations of the value- reason to call its death as video But the incident is also, added reseller model. assistant referee technology arguably, the genesis of an identity How widely is the term ‘VAR’ made its UK debut in an FA cup crisis within the IT channel, actually known among end tie between Crystal Palace and where another group of VARs has users? Do they prefer to buy Brighton & Hove Albion. happily existed for decades. through the channel, or direct The questions is, will there be Google the term ‘VAR’ five from manufacturers, and do room for two breeds of ‘VAR’ in years ago, and the top results they believe the tier of hardware, the public consciousness (even if would all have been about Softcat, software and IT services suppliers one is a synonym and the other is Computacenter and SCC. But that sit between them and those sounded out letter by letter)? today ‘VAR’ will for most people that actually make the technology We put this poser to the conjure up an image of Mark have become more or less relevant respondents of our annual Top Clattenburg sitting in a video suite in the cloud era? What tips do end VARs survey, these being IT with a headset. users have for how VARs should decision makers at end-user Whether the term ‘value-added grab their attention in a post- firms. Respondents worked reseller’ will eventually fall out of GDPR world? for organisations of a range of common parlance is unimportant In another new development, different sizes, from micro- (although if it did we’d certainly we also asked each respondent businesses to large organisations have to review the name of this to rate their experiences with the with 10,000-plus staff (see figure report). But the development UK’s top 50 VARs by revenue 1), and across the full gamut of could be seen as symbolic of (see p34). verticals spanning public sector,

1. How many people are employed by your organisation?

One to 25 26 to 250 251 to 1,000 1,001 to 10,000 >10,000 7% 25% 19% 30% 19%

32 CHANNELWEB.CO.UK CRN TOP VARs 2018

2. Which of these best characterises the industry of which your organisation is a part?

Other professional Education Financial services Manufacturing Retail Telecoms 16% 14% 11% 11% 6% 5%

Healthcare Other public sector Local government Utilities Legal All other 4% 4% 3% 3% 3% 20% education, finance, telecoms, The vast majority demonstrated to say most end users wouldn’t manufacturing and legal (see at least a degree of brand loyalty choose to buy direct if they could. figure 2). (see figure 4, p34). A devoted Resellers can claim several Drawn from the database 11 per cent said they tend to advantages over vendors, most of CRN’s sister publication use the same VAR/IT supplier notably their unique ability to Computing, the respondents for all their IT needs, while the bring together multi-vendor were offered a £3 Amazon largest proportion – 49 per cent solutions, and their closer voucher if they completed the – said they use a small group of proximity to the customer. survey, and 276 did so. Some trusted VARs. But when we asked respondents 435 started the survey, with 79 Some 31 per cent said they shop whether they would prefer to buy screened out because they weren’t around, but also take into account direct from a manufacturer/OEM, IT decision makers. We grabbed past relationships. or indirectly through a VAR, their attention with an email At the other extreme, five per nearly two thirds (65 per cent) asking them to open up on their cent of respondents said they plumped for the direct option (see dealings with CRN’s core audience tend to source products and figure 5, p34). of IT suppliers. services simply on the basis of It may come as little surprise It may surprise many to learn price, with a further four per cent that most end users – at least in that a whopping 87 per cent of saying they aren’t at all brand loyal theory – would want in a perfect the 315 respondents who to any VARs because they tend to world to cut out the middle man. answered this first question were buy direct. More intriguing are the results at least somewhat familiar with Although in practice only for the next question, which asked the term VAR, with 46 per cent the largest enterprises and respondents if they felt VARs had confessing they are ‘very familiar’ government organisations are in become more or less relevant in with it (see figure 3). a position to demand a direct- the cloud era. Video assistant referees may only relationship with most A few years ago, concerns were well be muddying the waters for mainstream IT vendors, that’s not raised that resellers would struggle IT resellers, but for now, it seems, the term has a surprising degree 3. Our industry often uses the term ‘VAR’ as a of resonance among the majority catch-all term. To what extent are you familiar with it? of IT decision makers. Very familiar 46% Direct threat Somewhat familiar 40% Next up, we quizzed respondents on how brand loyal they are when Never heard of it 11% it comes to which VARs they Thought it meant ‘video assistant referee’ 3% work with.

CHANNELWEB.CO.UK 33 CRN TOP VARs 2018

4. How brand-loyal are you when it comes to which top 50 resellers have with our IT VAR/IT supplier you work with? decision-maker respondents. How many of them are familiar Very – we tend to use the same VAR/IT with the likes of SCC, Daisy, supplier for everything 11% eBuyer or Logicalis? We presented them with a list of Not at all the UK’s top 50 VARs by revenue We tend – we tend (based on last year’s Top VARs to shop to source report), and asked them to select around, but from all the ones they had dealt with we take past whomever or were aware of. We also asked relationships is cheapest them to indicate whether their into account 5% encounters with each had been to an extent 31% positive or negative. This question used a slider button, with zero being extremely negative, 50 being neutral, and 100 being extremely positive. Fairly – we Not at use a small all – we We were surprised by the high group of tend to volume of data this question trusted VARs/ buy direct yielded. No VAR received fewer IT suppliers rather than 70 responses. Five – BT 49% than from Business Direct, eBuyer, Softcat, VARs 4% Capita IT Solutions and Daisy – are apparently household names to muscle in on the nascent as-a- expert and impartial hybrid cloud among end users, receiving over service world as more spending consultancies. Others have built 150 responses apiece (see figure shifted off-premises and into the datacentres themselves. 7, p35). The average (mean) cloud. Predictions that a new This was borne out in the response level stood at 100. breed of cloud vendor would survey findings, with only slightly Generally, end users appear to find it easy to bypass the channel more respondents feeling cloud have had neutral, or just better abounded. has rendered VARs less rather than neutral, encounters with But spool forward to today, than more relevant (see figure 6, their VARs (see figure 8, p36). and resellers generally seem to p35). The majority (55 per cent) Across the 50 resellers, the have found a role in the cloud era, plumped for the middle ground average (mean) satisfaction score with many billing themselves as of “roughly the same”. In the eyes was 51.4, with most deviating of end users, resellers are holding from that average by only a few 5. Would you prefer to buy their own in the cloud era. percentage points either way. directly or indirectly? Only one firm – eBuyer – Rate your VAR received an average score of over As anyone who works in the IT 60, which is testament to the high channel and has been met with esteem the East Yorkshire-based Directly blank expressions from friends online reseller and retailer must 65% and relatives when explaining be held in by the majority of its what they do for a living knows, consumer, prosumer and SMB ours is an industry fairly well customers. hidden from the public’s view. Seven other VARs boasted Our loved ones will have heard average scores above 55, with Indirectly of HP, Microsoft and Google, but global reseller juggernaut Insight 35% few would know even the name leading the chasing pack with a ‘Computacenter’. score of 59.3 per cent. Softcat, But we wanted to test out what Scan and Computacenter rounded degree of resonance the UK’s out the top five.

34 CHANNELWEB.CO.UK CRN TOP VARs 2018

6. Do you feel VARs have become more firms all among the lips at the spread of responses, top seven most with significantly more or less relevant in the cloud era? well known. respondents saying their kitty Having said for IT goods and services had that, some of the risen than fallen in their current bigger brands didn’t financial year (46 per cent versus score so well, with 14 per cent). Some 34 per cent juggernaut Capita IT claimed their war chest remained Solutions dead last flat, while five per cent weren’t Roughly the same Less More with a score of 42.7 sure or didn’t want to say (see 55% 27% 18% per cent. Apogee, infographic, p41). Daisy and KCOM When we posed the same were among the question last year, the spread of other bigger brands responses was very similar (48 with below-average per cent up, 18 per cent down and Although it may be unwise satisfaction scores. 30 per cent flat). But the results to search for too many patterns contrast with two years ago, when in this data, there was a high Waxing war chests only 41 per cent reported an uplift correlation between brand Next up, we asked our IT buyers in their budgets. awareness and brand satisfaction, about their tech budgets. Digital transformation is with the top three highest-rated IT suppliers should lick their normally the first bullet point 7. Which of these VARs have you dealt with or are aware of? 200200 At a glance...

178 1 17 2 BT 3 eBuyer Business eBuyer 150 2 Softcat BT Business 178 156 172 156

150 153 150 148 145 Softcat Daisy Insight Average 124

Computacenter (mean) Capita IT Solutions 100 Bytes 100 113 108 108 106 100 105 99 99 99 98 100 97 96 96 95 93 Apogee KCOM 92 SCC CDW 89 89 89 89 Claranet XMA 88 Stone ANS CCS Media 86 86 84 Dimension DataDimension 82 Annodata Scan Computers 113 CAE Altodigital Chess Logicalis RM 80 80 79 79 NCC Group 97 77 Getronics 79 Ultima 76 76 Maintel 75 SBL 73 72 K3 71 SHI Vohkus 82 Phoenix SoftwarePhoenix Avanade Buy IT Direct 90 Jigsaw24 GBM OCSL NTT Security WWT Bell IntegrationBell Redcentric Comparex 50 MCSA Storm Technologies 50 Global NSC NG Bailey IT Services Bailey NG Telent Technology Services Technology Telent

00

CHANNELWEB.CO.UK 35 CRN TOP VARs 2018

8. Rate these encounters from 1-100 where 0=very negative and 100=very positive

80 At a glance...

70 1 2 eBuyer 3 Insight 63.6 Softcat 59.3 58.5 60 6 60 Average

59.3 (mean) eBuyer 3.6 57.4

58.5 51.4 56.2 55.9 55.5 Insight 54.8 54.1 50 .2 53.7 53.1 52.7 52.4 Softcat Bytes 51.9 51.7 51.4 50 51.5 51 51.1 51.2 XMA SCC 50.5 50.3 50.5 50.0 49.6 49.8 49.3 SBL CDW 49.2 49.0 48.9 48.8 48.6 47.9 48.3 48.2 Ultima 48.0 48.0 48.1 47.2 47.4 48.0 Stone CCS Media Chess CAE 46.9 Logicalis Computacenter Scan Computers 58.2 WWT K3 SHI RM GBM 45.7 Maintel Vohkus 49.9 ANS Dimension DataDimension Jigsaw24 44.9 Getronics NCC Group 52.1 Redcentric KCOM Daisy Claranet MCSA 40 OCSL BT Business Comparex 42.7 Apogee Phoenix SoftwarePhoenix 40 Avanade NTT Security Annodata NSC Global NSC Buy IT Direct 47.7 Altodigital Storm Technologies Bell IntegrationBell 3030 IT Services Bailey NG Telent Technology Services Technology Telent Capita IT Solutions

2020

1010

0 0

in the slide deck of any vendor The majority, however, plumped channel – like any other sales- or reseller executive who is for the middle-ground option, driven industry – to tread more presenting on market drivers of saying that DX is “real to a certain carefully when it comes to IT spend. extent, but it is overhyped”. unsolicited sales calls and emails. But we wanted to know how Despite this, when we asked real this trend is in the eyes of GDPR you compliant? respondents to estimate how end-user customers, and whether GDPR is normally the second many unsolicited cold calls we as an industry have got carried item in the fictional slide deck they receive from IT suppliers away with the idea that every cited above, but unlike DX is per week, the average (mean) firm is following in the footsteps a double-edged sword for the response was 19.8 (see figure of Uber or Airbnb by putting channel. Although it will fuel 10, p37). technology at the heart of their an extra $3.1bn in IT security On this note, we next asked business to disrupt their market. software and services spending in respondents to tell us in their own This question (see figure 9, Europe in 2018 alone, according words how VARs should go about p37) drew a mixed range of to IDC, many resellers view GDPR winning their custom in a post- responses, but slightly more as a legal or business assurance, GDPR world. Their tips, which respondents (24 versus 18 per rather than a technology issue, include sending colourful socks cent) said they saw it more as and therefore one outside their and flying from England to Belfast “meaningless buzzphrase” than domain. for an office tour, form the basis a “tangible and important trend”. GDPR has also forced the for the next section of this report.

36 CHANNELWEB.CO.UK CRN TOP VARs 2018

9. Do you feel digital transformation is a real phenomenon or just a buzzphrase generated by people trying to sell IT?

It’s real to an It’s a extent, but overhyped It’s a tangible meaningless and important buzzphrase 55% trend that is prompting 24% 18% change

10. Roughly how many unsolicited cold calls would you estimate you now receive from IT suppliers per week?

15

12.5 Average (mean)

10

7.5 Percent

5

2.5

0 0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 88 92 96 100

CHANNELWEB.CO.UK 37 CRN TOP VARs 2018 Ten tips for grabbing end users’ attention We asked respondents for their golden nuggets on how VARs or other IT suppliers should attempt to grab their attention or win their custom in today’s market. This may be a harder feat to achieve than ever, given the constraints of GDPR and increased savviness of IT decision makers, but 10 themes emerged from the written answers our respondents gave. Quotes are identified by respondents’ company headcount and their sector. 1. Wacky direct marketing stunts can work “VARs and IT suppliers need to find services, a great idea!” multiple calls without cleverer and ‘softer’ approaches (251-1,000, construction) acknowledgement.” to making contact with a clear (251-1,000, message about any USP they “Legitimate direct marketing.” manufacturing) might offer. One reseller got my (1,001-10,000, education) attention by sending me some “Try to be less formulaic.” colourful socks and promising “Good/different: we got a (1,001-10,000, other professional to ‘blow my socks’ off with their ‘team’ cake from one VAR. Bad: services)

2. Get top execs to write blogs and speak to the press “Relevant content and advice.” “Roadshows and media are good be more than (26-250, legal) ways to get the word out.” marketing (> 10,000, outsourcing) fluff.” “Put better information into (1,001- aggregating news/collaboration “Offer valuable, informative 10,000, sites such as ChannelWeb.” content – it doesn’t have to be online (> 10,000, other professional services) vendor neutral but it does have to gambling)

3. Tailored emails beat cold calls “Too many irrelevant cold calls. I – I much prefer to get info via email don’t have the time to deal with or mailshots first, without intrusive them. If they must be used, email sales calls. I’ve had a couple of is better.” occasions where ‘short’ surveys (251-1,000, other public sector) and information gathering kept me tied up for 20 minutes – suffice it “It’s OK to send emails but if the to say none of the offenders got firm gets no response, there should business from us!” be no follow-ups.” (1,001-10,000, education) (251-1,000, manufacturing) is held for contacts who are willing “Interact via email and deliver to speak to them.” “Build a trusted customer database what was promised and not just (26-250, software development) of people who have a legitimate a watered-down solution.” interest in doing business and have (26-250, other public sector) “Contact details need to be given consent to receive marketing accurate and recent. I get emails information.” “Completely remove all data held that are relevant to a role I left (1-25, other professional services) for contacts who do not want to be several years ago; these emails are contacted in the future and make simply ignored.” “I’m not a fan of total cold calling sure that only minimal information (>10,000, other professional services)

38 CHANNELWEB.CO.UK CRN TOP VARs 2018

4. Do your research “It’s all about the relationship. “Do some research. I will not (1-25, other Suppliers that make the effort to answer calls where suppliers have professional get to know me as a person, rather no clue what we do.” services) than a figure on a spreadsheet, will (1,001-10,000, technology) win my business. Suppliers that “Research your want to take me out for lunch, for “Only targeted marketing where the customers before example, do well. Suppliers that VAR has done some research on us contacting them.” offer nights out and more, do even and not just a cold call spouting (26-250, multi- better.” (26-250, utilities) guff about everyone’s problems.” channel retail)

5. Employ a tailored approach “They should actually read my “Engage with us to understand “Find out about your LinkedIn profile and be very specific our marketplace a bit more, target audience rather with their propositions.” understand the change in the than making generic (1-25, telecoms) industry and then come up cold calls.” with solutions that can better (26-250, retail and “Suppliers need to be aware of meet our needs as a growing SME.” wholesale) the peculiarities of HE [higher (26-250, airline) education] and understand that “One supplier had a canned they are complex organisations “A targeted approach showing presentation that had no relevance with varying requirements knowledge of the company’s to our company.” depending on whether they are marketplace and drivers. There are (251-1,000, other public sector) student, research, teaching or still too many VARs using out-of- professional service related.” date contact databases.” “Understand our business.” (1,001-10,000, education) (26-250, healthcare) (>10,000, telecoms)

6. The personal touch goes a long way “I never respond to a hard sell. I like always have pros and cons and trying to get business from us the approach to be tailored to my rough pricing. It’s why I like for a number of years, and a organisation so that it is relevant. working with them.” new account manager came on I need to know the value of the (251-1,000, marine services) board. We are based in Belfast, service being offered and I want and he flew over for a three-hour indicative pricing upfront. One of “Taking time to familiarise meeting and tour of our site and IT my trusted VARs always presents to themselves with our environment, infrastructure. This company will be me very carefully. His presentations or at least get an understanding getting future business.” are short and to the point and they of what we do. A supplier has been (1,001-10,000, retail)

7. Consider free trials “Try-before-you-buy schemes.” site free of charge to work with a load of (26-250, other professional services) with our team in order to PowerPoint demonstrate the value they slides and flashy “Very impressed with one specific could add. Not impressed sales material.” VAR that placed a consultant on our by resellers who simply turn up (More than 10,000, retail)

CHANNELWEB.CO.UK 39 CRN TOP VARs 2018 8. References and case studies are highly prized “Case studies based on “Peer references work best; searching for organisations of the same size in a relevant case study PDFs on their suppliers that comparable sector would help bring website without forms or other are open with ideas to life – especially those that nonsense. A brief email which is their success prove an ROI. Aimless cold calls witty and has a one-line summary.” stories presented as ‘this is not a sales (1,001-10,000, education) through scrape call’ are the worst. And those saying searches on the they can save us money on hardware “Case studies.” internet where I can identify with when a five-minute search presents (251-1,000, education) the stories and have an easier much bigger savings.” follow-up/feedback process.” (26-250, other public sector) “Cold calls do not work – I prefer (1,001-10,000, healthcare)

9. Don’t violate GDPR – but don’t lead on it either “Still have cold calls from security requirements.” security very companies we have not heard of (26-250, legal) seriously’). so I wonder where our details are It needs coming from.” “Don’t lead with GDPR.” very specific (1,001-10,000, other professional (251-1,000, financial services) answers: do you services) store data outside “Some companies have published EEA, is it encrypted, etc.” “Do not violate GDPR when trying to their GDPR and ISO compliance, (26-250, education) gain business.” which I find very reassuring.” (1,001-10,000, financial services) (26-250, other professional services) “Emblazon any recognised certification in their initial “I tend to be swayed by positive “Some companies present generic communication such as GDPR feedback/reviews/word of mouth. GDPR policies on their website compliant, ISO27001 compliant On the negative side, anyone trying which are uninformative (‘GDPR and so on.” to sell on the back of GDPR or data is very important,’ ‘we take data (1,001-10,000, healthcare)

10. Attend industry events “I select usually by having “I normally like VARs or other researched companies and from suppliers to demonstrate how good industry events.” they are. I find that if they host (1,001-10,000, education) seminars or something similar, it gives me an opportunity to see them “My main route for casing out new and ask some of their customers resources tends to be trade shows questions.” – VARs and IT suppliers could do (251-1,000, other professional organisation who is open to taking worse than use those. I never services) calls and when.” did like VARs calling or emailing (More than 10,000, education) me out of the blue so GDPR has “The cold-calling model is a bit had a positive effect for me in frowned upon. A roadshow with a lot “Public webinars are good (it helps that respect.” of suppliers would be one solution. if they are recorded).” (1-25, other professional services) One could openly ask within an (26-250, architecture)

40 CHANNELWEB.CO.UK CRN TOP VARs 2018

“VARs need to be a partner. “Good approaches are to needed most and commercials are This is about understanding our either attend relevant events pushed to the back of the queue to business, building relationships showcasing their services and ensure normal service resumes.” and educating us. Good examples look to build a relationship or (251-1,000, other professional are vendor workshops and briefing use recommendations via groups services) sessions to explore the art of the which are sector related. I very possible. Bad examples are poorly much dislike cold calls as it is “Presence at major shows like IP organised seminars at hotels, which very difficult to stand out from Expo. Marketing via Avail Mail.” are really just designed to build the crowd, which is disappointing (1,001-10,000, other professional marketing lists.” because I could be losing someone services) (1,001-10,000, retail) who could be offering very good services. I look for someone who is “Hold more seminars and build “In my view, expo-type events with looking for a long-term relationship up one-to-one relationships with a good programme of workshops and is an extension of the service customers. Know your market and lectures work best.” that IT provides the business. segments.” (26-250, education) Someone we can rely on when (1,001-10,000, other public sector)

A WORD OF ADVICE... We also asked our respondents for one piece of advice they would give IT suppliers, either in terms of how they pitch for business, or how they work with them once an agreement is in place. A few key themes emerged. ON...HONESTY Don’t lie about where Please let us know I like to work with Always be truthful Be honest, realistic you got my details from, when there are major people I trust, and who with your customers and specific about and when you cold call, issues with hardware, I get on with. Easy to if you have an issue potential benefits. make sure you make it software or services recognise when you that will delay or Be honest and then clear that’s what you’ve we have purchased find it, but hard to write affect the service deliver on what you done. from you. a spec for it. Sorry. you are providing. promise.

ON...NOT OVERPROMISING Please do not Don’t underbid – it Agree early on Suppliers have Focus on delivering what has been agreed make brash undermines your and be clear on a tendency to before trying to sell the next service. To us promises that you credibility when what you will and overpromise and as a business, everything is about delivery cannot keep! extras creep in. will not deliver. underdeliver. and not promises. Once an agreement is in place, deliver on your promises. Seems odd that so many do not. A telco that won some business with me three and a half years ago promised to transition to their network in three months. The transition took over three years, not all savings were realised and I will never use them nor recommend them again – and they are allegedly tier one. Honesty about the limitations of any product/service – everything has them and if suppliers want an ongoing relationship, purchasing stuff with known but under-communicated limitations damages future prospects.

ON...CONSISTENCY AND ONGOING COMMUNICATION Meet commitments Don’t abandon Once an agreement is Maintain the Maintain a good relationship with a – or indicate when the customer in place, be proactive to relationship after single account manager. Swapping they will be met. after you’ve anticipate our needs and the contract is and changing account managers is Don’t just hide. made the sale. make us want to use you. signed. the way to drive me away! Once an agreement is in place I expect the same level of customer experience as I received before the sale. I often feel let down by suppliers who, once they have secured the bid, are totally uninterested in making sure the ongoing relationship is as strong as the first pitch was. Arrange regular calls/meetings to discuss any Continual Keep in contact on agreed schedules, don’t issues that may have arisen. communication is vital. make the customer chase for info/updates.

CHANNELWEB.CO.UK 41 CRN TOP VARs 2018

ON...IMPARTIALITY Give impartial advice Be truly agnostic Agree early on and be Guarantee to us that their Try to provide an or show backup from when recommending clear on what you will advice will be impartial and impartial view on a sources such as Gartner. vendor offerings. and will not deliver. offer a solution for our needs. variety of products.

ON...PUSHINESS Be a partner/friend. Don’t try to Do not be pushy. Expect Stop cold calls – time I can’t stand pushy Stop bugging oversell, it sounds needy. Good sometimes to just give wasting and annoying sellers. I know what me. If I said I account management is key, advice but not get a – I am far less likely to I need at any given will get back to personal skills are important. sale – it’s a service! buy off a pushy firm. time. you then I will. Don’t pressure, and take no for an answer. If you get an in, give it 100 per cent, that will be your one chance. Keep your active salespeople; we dump most suppliers because a good salesperson has left or moved on and is replaced by one who doesn’t do the basics such as keep in touch, keep promises etc. Don’t be too pushy. Ask for a chance by all means. Don’t promise what you can’t deliver. For example, one guy sent me a short message on LinkedIn to say he’d appreciate an opportunity to see if he could be competitive and said he understood I get hundreds of calls and he wouldn’t pursue me but would appreciate a yes or no. I said yes. I liked his humble approach. If a cold caller pretends to know more and tries to get information out of reception, eg ‘can I just double-check the email address?’ They are immediately banned. Don’t lie or cheat! Don’t be too pushy and have more consultative account and salespeople who are not incentivised on sales only. Customer experience is key and too many companies employ aggressive and pushy account teams which are actually a turn-off and are not helpful.

ON...KNOWING YOUR STUFF Suppliers and VARs need to have a good amount of Show the ROI, not just the More technical knowledge, Do your detail to back up their assertions. whizzy new technology. less sales talk. homework. Know more about who you are pitching to and don’t start by talking about yourselves in the presentation. I always say I like working with suppliers who ask more questions about who we are, ie they listen and they show their understanding, rather than talking themselves up and basically saying we’re the best and you’d be stupid not to pick us. Just saying ‘we can help’ Understand the market you Know your customer and No presentations and no isn’t going to work. If you can are trying to sell into. Random what their business is before whitepapers that say nothing. tell us something we didn’t calls with no knowledge of our contacting them. Ensure that We care not who you work already know, we might listen. environment are ignored. the initial contact is positive. with but what you know.

End users’ top pet peeves about IT salespeople Pretending they’ve spoken to you before “Don’t lie to me and pretend that enough or isn’t being truthful. It can we have already engaged at some you’ve already spoken to me!” be funny to listen to their bull.” level. I delete 99 per cent of sales (251-1,000, education) (1-25, other public sector) emails based on this.” (251-1,000, education) “Don’t annoy me by calling and “Do not lie or cold message me pretending we have spoken before.” trying to arrange a meeting or call. (26-250, financial services) The number of cold calls claiming I or a colleague have spoken to them “Because of the nature of our work previously when this isn’t the case gathering data, we have a high level is high and immediately gets the of understanding regarding the company blackballed.” requirements for GDPR compliance. (26-250, legal) We’ve had a few calls where the salesperson either doesn’t know “Be honest and don’t pretend that

42 CHANNELWEB.CO.UK CRN TOP VARs 2018

Cold calls “I am switched off by unsolicited “I don’t appreciate cold calls.” cold calls and marketing. I select by (1-25, other professional services) having researched companies and from industry events.” “I think they should try to partner (1,001-10,000, education) with us and not try to hard sell or cold call us. I am now friends with “Feel free to send generic adverts to our VAR account manager and us but no calls. We will call when we when he changed company I used need something and usually ask for his new company.” pricing.” (251-1,000, transport) (26-250, manufacturing) “We should not be cold called or “Cold calling doesn’t work. I only cold emailed by new sellers. If listen to people from organisations I I answered every cold call, it have personally used before or that would probably take up an hour my peer network recommends.” of my day.” >10,000, transport and logistics) (26-250, other professional services)

Using scare tactics “Overhyped worries and unfounded “Accurate information, advice and scare stories.” guidance are what instil confidence, (1-25, financial services) much more than scare tactics, ie how the VAR can add value to a “The VARs I encountered project.” approached GDPR the same as they (1,001-10,000, other professional did the Millennium bug: with scare services) tactics. In the end we did it all in-house and utilised some “Less hyperbole and scaremongering.” software vendors directly.” (>10,000, education) (26-250, non-profit) “Many make false claims about “Don’t try to scare us by saying our how their product would make us company will cease to operate in compliant and what could happen if order to frighten us. Try to be our we don’t use such a product.” partner instead.” (1,001-10,000, other professional (251-1,000, transport) services)

In your current fiscal year, has your overall budget for IT goods and services: ➡ ? Increased by Increased by Increased by Stayed the Decreased by Decreased by Decreased by Don’t >20% 5-20% <5% same <5% 5-20% >20% know 7% 24% 15% 34% 7% 7% 1% 5%

CHANNELWEB.CO.UK 43 CRN TOP VARs 2018 1-100 index 1 Computacenter £1.496bn 36 Six Degrees £101.6m 69 Xeretec £52.6m 2 Softcat £1.082bn 37 Claranet £101.2m 70 Zones £51.6m 3 BT £1bn 38 Redcentric £100m 71 Axians £51.4m 4 CDW £719.4m 39 CACI £99.5m 72 Proact £50.6m 5 Daisy 684.3m 40 Ultima Business Solutions 73 Commercial £50.5m 6 SCC £591.4m £97.6m 74 Options IT £50.4m 7 Capita IT Services £507.8m 41 Storm Technologies £93.2m 75 Millgate £50.1m 8 Insight £502m 42 KCOM Enterprise £88.1m 76 Sabio £49.5m 9 World Wide Technology £500m 43 GCI £86.7m 77 Viadex £49.4m 10 XMA £396.6m 44 OCSL £85.9m 78 MCSA £49.2m 11 Telent £386.3m 45 K3 Business Technology 79 RedstoneConnect £47.6m 12 SHI £285m £83.4m 80 PC Specialist £47.6m 13 Bytes Software Services £277m 46 NSC Global £80.2m 81 Blue Chip Customer 14 Dimension Data £258m 47 Stone Group £73.6m Engineering £47.1m 15 NCC Group £233.3m 48 Centerprise £72.8m 82 Bechtle £46.8m 16 Apogee £208.4m 49 Altodigital £71.2m 83 CSI £46.4m 17 eBuyer £202.1m 50 OneCom £71.1m 84 AdEPT Technology £46.4m 18 RM £185.9m 51 Vohkus £67.1m 85 European Electronique £46m 19 GBM Digital £182.9m 52 Getronics £66m 86 TET £45.7m 20 CCS Media £180.2m 53 Cloudreach £65.9m 87 Printerland £44.5m 21 Software Box (SBL) £155.5m 54 Itelligence £65.7m 88 Nine Telecom £43.7m 22 Banner £153m 55 Total Computers £65.5m 89 Probrand £42.2m 23 Buy IT £146.5m 56 NTT Security £65.3m 90 Hardware Group £41.8m 24 Avanade £145.5m 57 IDE Group £65m 91 Intercity Technology £41.7m 25 Comparex £143.7m 58 AVMI £64.2m 92 Kinly (formerly Viju) £41.6m 26 SoftwareONE £137.9m 59 ANS £62.7m 93 Solid Solutions £41.3m 27 Maintel £133.1m 60 NG Bailey IT Services £60.7m 94 Ampito Group £40.8m 28 Phoenix Software £130.0m 61 Annodata £60.5m 95 Cisilion £40.7m 29 Bell Integration £129.9m 62 Academia £60.1m 96 Trams £40.5m 30 Jigsaw24 £128.7m 63 Stormfront £57.4m 97 Roc Technologies £40.3m 31 Logicalis £116.6m 64 NTT Data £57.1m 98 Elite Group £40.2m 32 BJSS £116m 65 Timico £55.7m 99 Natilik £40m 33 Scan Computers £113.1m 66 Focus Group £54.2m 100 Electrosonic £39.9m 34 Chess £110.3m 67 ProAV £53.3m 35 CAE £103.9m 68 PCM £53.2m

The figures on this list are intended to be a fair and reasonable reflection of the annual sales of each company that are PROFILES EXPLAINED generated in this country by a UK-registered trading entity. They are based on annual accounts filed at Companies House or, in 2 Softcat select cases, reliable first-hand testimony or informed market research. Figures may have been recalculated to account for Revenue: £1.082bn (+30%)● Year-on-year growth sales or acquisitions; extended or truncated reporting periods; Net profit: 5.1% Staff: 1,130 the identification of a UK sales figure from a larger total; or a ● ● currency conversion at a historically appropriate exchange rate. If you have any questions, comments or complaints, please Net profit expressed as a Average monthly staff email [email protected] percentage of revenues numbers during the year

Incisive Media, New London House, 172 Drury Lane, London WC2B 5QR Tel: (020) 7484 9000 Editor Doug Woodburn 9817 Content editor Tom Wright 9797 Reporter Marian McHugh 9883 Content editor Josh Budd 9854 Multimedia editor Nima Green 9781 Senior production editor Amy Micklewright Commercial director Matt Dalton 9896 Head of global sales Nina Patel Global account director Jessica Feldman 9839 Account manager Jessica Richards 9923 Group publishing director Alan Loader Managing director, Incisive Media Jonathon Whiteley © 2018 Incisive Media

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