CRN Hot Seat 2013 - Scott Fletcher

Chairman and founder of ANS Group Scott Fletcher tells Sara Yirrell why the VAR has backed the right horse, and extols the virtues of a solid supply chain

What are your plans for this year?

We aim to continue doing what we have done over the past 12 months. We are focusing on our managed services offering and developing cloud services. Over the past year we have doubled our managed services offerings and we plan to do that again over the next 12 months, while maintaining what we have with projects and professional services, which has grown as well over the past year.

In terms of turnover it will remain fairly static, but profitability will increase quite nicely – we are due to announce our results in the near future. It is all going in the right direction for ANS.

Also, by focusing on technology such as Flexpod – which is still doing really well and is providing a cloud-dominant force out there – we know we have backed the right horse.

We are now 150 people strong on the payroll and we are heading for 200 – we have 30 open roles and we plan to take on a further 30 apprentices next year. We have 12 apprentices at the moment and we are taking part in an employer-led apprentice scheme taking on eight kids a quarter. This is our way of dealing with the skills shortage and bringing in a new generation by doing some training of our own. Those guys will progress through the business eventually.

We finished our last year with £6m-£7m in the bank and no debt – who else can say that? We are profitable in cash and are generating cash. We always have our eye on acquisition and if the right one came along, we would definitely look at it. There are a lot of businesses out there that are not worth buying. However, we did buy Alpha [storage VAR for £4.5m in 2011], which propelled us into the top-level partner league and gave us a London presence. If we find something that gives us another string to our bow like that, we will look at it. At the moment, organic growth is working so well, why change it?

What technology trends do you see for 2013?

Because the industry is moving more towards services as opposed to technology, we are seeing different challenges and are looking at how to engage with customers in order to protect them. If you are selling a solution, they want to know what datacentre you are on and how their data can be protected. This is all after 2e2; customers are now asking more questions and doing more due diligence. The soundness of the supply chain and the partner is of utmost importance to them. We are making sure customers are comfortable with that.

However, as resellers, we all have to be cognisant with what is going on with vendors, such as with Office 365 and Google Apps, as that starts to change how we deal with customers. These customers are looking at just a cloud offering and that is it.

Our customers are looking at the cloud as a concept, but we do not deal with the smaller business side of things. Our customer profile is 500 users to 5,000 users who have infrastructure on Flexpod which we manage.

Security is becoming an increasing issue; managing that and making sure [infrastructure] is looked after properly. That technology [Flexpod] is proven – it has legs and will run for three to five years easily. That is where we have been stepping up to the plate.

However, the other question is, is this the year for VDI? The reason we have not had a VDI boom is because some of the technology is still not ready. Citrix has been trying to get things together and I think customers are now looking at VDI and asking whether it works. So one of the things we are looking at is desktop-as-a-service – marketing that to corporations as a managed service.

Smaller customers are looking at it as well. A lot of the time it does not work in the way they want it to work, but if we provide them with a service that can do what they want it to do, VDI will be a big opportunity.

How do you see the economy panning out?

I think we make our own economy. Although it is flatlining at the moment, there are some companies that are doing well. The offering that we have around Flexpod and virtualisation is the reason we have done so well. The message is that we can help to drive costs out of the infrastructure.

Although general growth is set to be one or two per cent over the next couple of years, IT spend is expected to go up. Technology generally drives costs out of business and helps keep outlay down, making customers more competitive; what is not to like?

Five years ago it was a lot easier, but it is still not as tough as it was in 2008 – it is more ‘steady as she goes’. I think the industry will have a reasonably good year next year.

Traditional resellers – those selling tin and a bit of software, or just providing a ‘me too’ service – are going to struggle. We will see more of that over the next 12 months to two years I think; if they have not innovated as a business, they will go backwards.

2e2 was not one of those businesses, however, but it was laden with debt and that is what sent it under. It was a shame to see that happen. But good luck to other businesses that are reselling kit and a bit of licensing – I really don’t think they are going to be around in the next two or three years.

COMPANY PROFILE

ANS Group was founded in 1996 and has experienced 80 per cent year-on-year growth since 2009, with turnover hitting £47m for its last financial year. The firm, which has offices in Manchester and London, has more than 600 customers spread across the public and private sectors. It was the first partner in Europe to achieve the Cisco Cloud Builder Accreditation. Vendor partners include Cisco, NetApp, VMware and Microsoft.