A band of former Arc Distribution employees has formed a new security VAD after concluding that recent market consolidation has left a gap for a new entrant.
Led by former Arc boss Stuart Reay, Alpha Generation Distribution launched in July and counts Secunia, WinMagic and Network Instruments as its first three vendor signings.
With many of the UK's top security VADs having been swallowed up by larger rivals in recent months and years, a hole has opened up for an independent mid-market outfit to fill, Reay argued.
"We are hearing from resellers and vendors that there is a gap in the market where Arc used to be," Reay (pictured) said.
When Reay and his team sold Arc to Exclusive Networks in 2009, the VAD had roughly quadrupled turnover over the previous two and a half years to £16m on the back of the success of key vendor franchises including SafeBoot.
Reay said he harbours similar ambitions for Alpha Gen, whose turnover he forecast will hit £4m in 2014 and £16m in 2016.
Five of Alpha Gen's seven staff are ex-Arc and Exclusive employees, including former Arc marketing director Mark Weatherill, who has taken an equity stake in the distributor after joining this week. Reay's non-compete clause with Exclusive expired in February.
Alpha Gen intends to have six vendors on board by the end of 2014 but Reay said the distributor is unlikely to dabble in the anti-virus space.
"Never say never. But we want to avoid getting into AV as it's just not the most effective part of a corporate network defence any more, and it is so resource-intensive to carry," he explained.
"We are looking to bring proactive technologies to market. We certainly see Secunia as proactive technology as it's taking proactive steps to ensure you do not have holes in your applications for the bad guys to compromise. And WinMagic allows you to encrypt devices before they go out into the field – that's proactive."
Alpha Gen, which is based near Nottingham, has traded with 15 VARs so far and will soon begin offering training and support services.
Weatherill said: "Services and support are important to us as we want to ensure we can offer everything a reseller needs from a distributor. The message coming back is that's what is missing in this particular space."
Computerlinks became the latest security VAD to succumb to global consolidation when it reached a deal to sell up to Arrow last week. Sphinx, VADition and Vigil Software are among the other big names to fall to US or European rivals in recent months and years.
Reay name-checked Cohort Technology and Wick Hill as among the remaining independent players but maintained that new and emerging vendors still struggle to find a route to market in the UK.
Ian Kilpatrick, chairman of Wick Hill, said: "It's nice to see Stuart back. Given the changes in the security distribution sector over the past 18 months, there is plenty of room for distributors delivering value-add."
Grahame Smee, managing director of Cohort Technology, added: "Stuart is well respected and has a history of success. I'm sure he will do well."
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