Q&A with Sir Peter Rigby

Stage presence: Sir Peter Rigby (right) in his Q&A session with Ian French

Sir Peter Rigby was yesterday described by Channel Conference chair Ian French as "the grandfather of the channel".

He is a man that not only controls the biggest privately owned reseller/distributor hybrid in the UK in the form of SCH Group, but also owns a chain of luxury hotels, two aviation businesses and until recently owned and flew his own fighter jet. He even arrived at yesterday's Channel Conference in Northamptonshire piloting his own helicopter.

He also owns his own charitable trust and is passionate about keeping business alive in the UK.

Speaking to an enthralled channel audience, Rigby covered a number of topics from how he started his career, to the birth of SCH and his vision for the future, and advice on how to run a successful business.

Rigby started off his Q&A session by describing his humble beginnings.

"I always wanted to start my career in the RAF," he said. "But my father lost his eyesight and I decided to get a job. I was very fortunate to be introduced to a company called NCR and spent five years learning how to program. When I was 21 I went to work for a company called Honeywell. I became their top salesman by the age of 24.

"By my late 20s I decided to have a go on my own. I had saved £2,000 and was lucky enough to have the backing of my wife at that time. I didn't really know where to start, but I had been used to selling big systems to big corporations, so I set up a little office in the middle of Birmingham and also set up a consultancy business and a recruitment business."

French asked Rigby why he had decided to pursue a hybrid model.

"At the time the world was dominated by IBM when I was selling. It had 85 per cent of the mainframe market and also went to market through shops. We are still with IBM 30 years later. No one offers a one-stop solution these days. Clearly, it is better for the channel to have heterogeneous solutions. I can't think of a vendor that is equipped to take on a large organisation's total IT requirement.

"We decided to build a hybrid model – a reseller business and a distribution business. To get in with vendors you had to have a volume business. It is the one thing that they understood – 'how much are you spending with me'. I also decided to build in services from the start.

"We saw the opportunity to distribute as well. There are Chinese walls between our business. I have never had to arbitrate between the activities of my reseller and the activities of my distributor, which is very important."

Rigby also set up his own PC superstore empire in the 1990s – known as Byte: The Computer Superstore – which went head-to-head with PC World. He built his empire to 60 stores across the UK, until it was eventually bought by Dixons.

Technology is a global enabler, Rigby said, explaining to the audience why he decided to branch out to European territories.

"It is more apparent today," he said. "If something is announced at 3pm today it is around the rest of the world instantly. I have always had a vision and always known where to go next. To me SCH was a local business and a national business.

"[When the decision was taken to expand] in early 2000, it was too late to start afresh," he said. "We spent £100m acquiring businesses in Europe and we went from a UK business to operating in eight countries overnight.

"It was challenging as a private company as we haven't got money to print and it can be difficult to integrate new businesses. You see a lot of companies that are on a different planet to other companies in their group, but we have a company that trades the same, looks the same, and acts the same in every territory. I guess that is my manufacturer background coming out."

Rigby said that despite being a £2.5bn privately held company, he is reluctant to make too many disposals.

"The businesses are like my children – I don't like to lose them," he said. "I get more satisfaction from building a business from scratch than I get from turning a company around."

French asked Rigby if he had ever considered going public.

"I have been very close to going public on a few occasions," he said. "In the late 1980s, loads of smaller companies were being pushed to floatations, but often the management was not equipped for AIM or the city.

"I like to feel that my business is a family business. Inside the business we have to make it feel smaller rather than bigger, and people working there must feel valued. I look at public companies today and I don't want some 24-year-old analyst telling me what to do with my business.

"There is a strong sales drive to my business. We are not underhanded in the way we do business. In our industry you get technology driven companies and you get sales-driven companies. We are not a marketing driven company. You won't see SCH spending vast dollars promoting itself. As part of our structured approach we target the type of people who we want to do business with.

"The channel is being pushed down into the mid-tier. It has always done well in the SME marketplace – but SCH does not operate in that sector. That is why we don't compete with our distribution customers because we are more high-end."

Rigby said to stay ahead of the technical curve, he has employed an R&D team whose job it is to follow trends.

"We have been working on Software-as-a-Service (SaaS) for the past four years," he said. "It is not anything new for us."

The customer is the main driver of technology, he added. "Maybe a customer has heard of something or read something and depending on the relationship you have with them, they will ask you to take a look at this technology. Sometimes a vendor might come to us. But for every successful product or technology, there is one that does not work."

He said SaaS has the potential to be huge.

"I think SaaS is a good thing. It is radical. But if the big boys will let the technology trend unfold without playing King Canute – the notion of paying for what you use will take off. However, the opportunity it delivers will also force changes in the channel because the licensed software player will disappear. You have to have a solution spin on any business."

Other areas he tipped for success were virtualisation, security, cloud and server computing and databases.

"Technology that encourages energy saving is also important," he said. " Everybody is adopting it now and desktop virtualisation is long overdue. All these things are coming full circle. When we went through the PC phase there was no control within an organisation, but now with cloud computing, the concept has gone back to the way it started. Why manage these things yourself when somebody else can do it for you?"

Looking forward, Rigby said channel firms must be open to change.

"We talk about the future of the channel. There are some macro changes coming that will impact on the way we do business. The channel has not changed that much but the world is changing. The future generations don't know what client server computing is – they have a device that fits in their hand that combines voice and data and does anything they want.

"The expectations they have are huge. We have to get our heads around these things because they will provide opportunities for our businesses. We have to face change and that is probably the most difficult thing for many people to accept. But if we can't change in the technology business, what hope is there?"