Not every company that admits to being in the ‘right place at the wrong time’ has survived to fight another day; but Interactive Ideas is not just fighting, it is thriving.
Set up in 1984, the London-based distributor is planning for 15-20 per cent growth in the coming year.
However managing director Mike Trup admits the early days were very much trial and error.
“Before the company was set up I worked in the city. But after a trip to Eindhoven where I saw what was happening with interactive media and multi-media, I saw an opportunity between what was available in the US and what was around in the UK,” he told CRN.
“We started the business importing education lifestyle CD-Roms and that set the direction of the company. The industry was taking off and we started building the relationships with vendors and inviting more publishers starting up in the UK.”
Trup said the firm has changed vendor relationships regularly over the years, to ensure it has the laser focus needed to succeed in an increasingly competitive market.
It now has a two-pronged business approach. One division - Retail - covers gaming, audiovisual, educational, office accessories, gadgets, PC gaming and smart phone/tablets and is growing at around 10 per cent a year; and the other – Software Solutions - which includes enterprise Linux, open source, managed services and licensing, is growing at 40 per cent a year.
“There have been several twists in strategy where we followed the market,” Trup explained. “When we started bringing in Linux CD-Roms – we became known as the source for customers who wanted Linux and more obscure technology products. Obviously we were hit when people stopped buying CD-ROMs and went online. You could say we were in the right place at the wrong time – but that all changed when Linux and Red Hat went enterprise.”
And growth has been a stable presence ever since.
In 2009, the firm was forced to move into new offices because it had outgrown its old home and needed space to accommodate its future growth plans. “In the last two years we have doubled revenue and people,” Trup said, hinting that there was plenty of room for growth.
Return to recovery
“Everybody wants to get into the services business – resellers need support and skills training. We see that as part of our DNA. But we are evangelising new technology,” he said. “We are one of the few disties that regards our vendors as customers.”
But key to growth is ensuring value add, he said. “If all we are is a bank and warehouse – there is very little value that we can add. That’s not where we have a competitive advantage. However at the early to medium stages of a product’s development – that is where we can add the most value. We are almost like a venture capital operation – we really need to have a good crystal ball to see whether a vendor is going to do well or not.”
And now really is the time for Open Source to sell, Trup said. “Open source is the halfway house between SaaS and perpetual licences – the OS itself is free, but the patch management and resulting support costs money. I’ve never understood why some people find it so hard to sell,” he opined. There is also an opportunity in disentangling customers from their legacies of incumbent software which are suffering from high costs of exit.
“The issue is to get the balance right. As long as they are tied down [to an operating system] they are going to carry on paying through the nose,” he said.
Going forward, Trup said he sees Interactive Ideas moving further up the stack into the open source applications area.
“There is a lot of scope to add value – as people start to get used to an open source operating sytem – it doesn’t make sense to have the rest of the stack proprietary so we see opportunities emerging there,” he said.
In terms of company expansion, he said he is not a fan of acquisition, but is keen to grow overseas, but takes a slightly different approach to growth.
“There is still a resistance in the software industry to take advantage of digitalisation. You don’t necessarily need bricks and mortar – you can use local talent or have multi-lingual staff. Fulfilment is done by email anyway, it is not physical.”
And looking forward, Trup is confident the economy will recover.
“The Eurozone crisis has led to a lot of projects where people were sitting on their hands. Company cash is at the highest level it has been since the 1990s, but firms don’t want to spend. Yet they are getting nothing for it.
“When the mood turns, it will turn quickly and will gather momentum fast. Customers can only postpone projects for so long. We fully expect to see a return to 30 per cent growth,” he said.
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