Making the transition from a traditional VAR model to an MSP one while growing the business every year is not an easy feat, but Sipcom has done just that.
Set up by CEO Daniel Allen (pictured) in 2006 after being told by his old boss that his business strategy wouldn’t work, the London-based firm – which still sells product alongside its services – hit £1m revenue in year one and claimed to be one of the first service providers globally to deliver a hosted PBX service that same year. It has paid off its equity investors 12 months early and is in full growth mode.
Allen explained that the business first took off after a close partnership with ISV BroadSoft developed when he attended its Connections event in Arizona.
“I was at this event listening to telcos saying they didn’t know how the technology worked and that is was too early. But we were already doing it. In the end they came to me and I became a consultant for them, flying all over the world to meet their customers and explaining the concept of UC-as-a-service (UCaaS) and how it has 100 per cent more revenue attached to it.”
He said that in 2011 he decided to secure investment in Sipcom iself and organised PE/Angel investment with Puma VCT (part of Shore Capital) with an agreement to pay back the money after three years.
“We actually repaid that investment 12 months early and have moved the business to a new HQ in Aldgate, where we are building out our management team and our sales team,” Allen said, adding that UK revenue has now smashed through the £4m mark.
The firm has also struck up a fruitful partnership with Microsoft, helping the software giant build out its UC offering, and working with the vendor across 31 countries.
“Our technology has global coverage,” he said.
He added that the firm has seven datacentres in several countries: Israel, France, the UK, and the US, with coverage across four continents. It works directly with its own customers, and is also looking to partner with other VARs to sell its UCaaS solutions to their customers.
“We are a cashflow-positive business and next year we are looking to grow revenue by 25 per cent. The valuable thing about our business model is that it is built around recurring revenue rather than a traditional reseller approach. I just want to grow the business and see how far we can go,” he said.
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