Distribution big hitter Mark Hatton says that returning to the market with a new VAD would not have been viable two years ago.
Talking to CRN following the launch of Kite Distribution, the former Sphinx boss said his decision to come out of semi-retirement was inspired by the prospect of hooking up with two of his former colleagues to exploit a gap in the distribution landscape.
After selling Sphinx to Arrow in 2010, Hatton spent two years catching up with family life as he waited for the restrictive covenants written into the deal to expire.
"Then I decided I wanted to get back involved in business," he explained.
"I looked at a couple of opportunities but ultimately none appealed. Then I talked to some people I respected in the industry and it became apparent there was a huge gap in the market for a genuine VAD that could help vendors get their products to the market."
Hatton added: "The drive to do this was the prospect of working again with [fellow Kite directors] Dave [Marshall] and Kip [Tumber], who were both ready to take their careers in a different direction. But it was also because the moment was right, whereas I'm not sure it would have been a couple of years ago. The past two years have seen further consolidation and even more lack of choice of distributors for vendors and resellers."
On the face of it, Hatton appears to have a point, with VADition, Vigil, Computerlinks and Cohort among the security VADs to have sold up to global or regional players since Hatton exited the market.
Kite will operate an "old-school" distribution model, with field sales guys on the road working with partners to generate business, Hatton said. The Leicester-based firm, which will have more than 10 staff by the end of the summer, counts Infoblox, BackBox, Bloxx, Cryoserver, Firemon and Spikes Security as its initial vendor allies.
The proceeds Hatton bagged from Sphinx's sale will ensure Kite is well funded, something he claimed differentiates it from some other start-up VADs striving to offer vendors an alternative route to market to the global players.
"I would guess this is the best-funded start-up for a long time and you don't get credit lines from top vendors unless it is well funded," he said.
"There are now a small number of very big [distribution] players that have unbelievably strong logistics engines and lots of telesales staff. They serve some vendors well but not others and I feel there is now a genuine lack of choice outside those worldwide players."
Although Kite will focus on security, Hatton acknowledged that security is becoming increasingly embedded as part of infrastructure. This means that networking and data management will also be a focus, although additional vendors will be added only gradually over time.
Hatton said he did not take the decision to return to the channel lightly.
"When you're running a business, it is all-consuming and there were lots of things I missed out on as my sons were growing up," he said. "I spent a couple of years catching up on that. I also learned Portuguese as I am terrible at languages and wanted a challenge.
"I've had a few years out of the industry, which has all been very enjoyable, so I'm not interested in coming back and doing something small-time. The objective is to make Kite a major player in UK distribution. I will view this as a complete failure if, in two to three years' time, we are not seen as a major player in the UK marketplace and I think the vendors that have committed to work with us demonstrate we are serious about that."
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