Dave Atherton claims the IT channel today is "remarkably" similar to the one he left in 2006 as he makes his return to the industry.
A decade after selling Dabs to BT for a reported £30m, Atherton (pictured above, now, and in his Dabs days) is resurfacing in the channel after accepting a role as chairman of distributor Entatech.
Talking exclusively to CRN, Atherton said it was "remarkable how a lot of things haven't changed" in the intervening decade, which has seen him plough his Dabs cash into pub chains, toy makers and music rights companies. He also appeared on Homes Under the Hammer.
Although Atherton has not invested in Telford-based distributor Entatech, which recently underwent an MBO, he revealed that "could be a possibility in the future".
"Generally my involvement [with these investments] was more in years gone by and recently I've had less to do, so it's great to bet back into the channel," he said.
I assumed there would have been a lot more consolidation, but there are still thousands and thousands of dealers.
"I assumed that all dealers would place all orders on a website, and that there wouldn't be any office sales people any more - but there are," he said.
"I assumed that all Chinese companies would look like American companies and have UK offices now, but they don't. I assumed that the industry would be more mainstream in terms of credit, but it isn't. And I assumed there would have been a lot more consolidation, but there are still thousands and thousands of dealers."
Atherton said he took the role at Entatech "largely" because its managing director, Dave Stevinson, who he has known for 25 years, "asked me to".
Atherton built etailer Dabs into a £200m-revenue business and said he would draw on his managerial experience to assist Entatech, which last year posted an operating loss of £1.6m on revenues of £119.7m
"In low-margin businesses, you focus all the time on cost management, because it makes so much of a difference," he said. "I ran Dabs for 20 years but by year ten I'd left product behind and other people were doing that. When you get to a certain size it's about conventional management: is everyone performing; are the departments performing right; are salary levels right? I'll leave product to the others; it's not like I'll be getting involved with vendors or anything like that."
Even now, Atherton refuses to confirm Dabs' reported £30m sale price, citing contractual undertakings, but when we mentioned that is the figure listed on Wikipedia he said he felt Wikipedia is "very authoritative".
Atherton's current investments include a chain of bars, which he said he "used to frequent in the early days, but not so much now".
A company that invents mechanisms for toys, such as those that make dolls' eyes swivel, is among Atherton's other interests, alongside a film music rights company in the West End.
"I got a tidy sum for selling Dabs," he said. "I've been working on investing the money and managing that money. In the first few years, I was very busy sat on all the boards of directors and advising them on how to best run them, as they were largely start-ups. But what happens is you make a few investments and the ones that are going to fail fail quickly and then you're left with the successful ones, which don't need much help in terms of the running."
On top of his chairman's duty of visiting the offices once a month, Atherton said he would be checking his Entatech emails every day.
"I also have some projects Dave has asked me to look at and will be doing that from home," he said.
"That's the one thing that has changed. I remember all the debates from 20 years ago about teleworking, and it's very real now. I can get up and go to my desk at home, and I could be in here in the office."
Atherton said he wants to be known as ‘DA' by his new colleagues, the initials of his name that made up the first two letters of the Dabs acronym (the 'B' and 'S' were provided by Dabs co-founder Bruce Smith).
"Dabs, the name with my initials in it, ceased to exist three months ago," he said.
"But I have kept in contact with various people in the industry on a friendship basis since then. Dave approached me following his recent acquisition of Entatech and said ‘would you like to come on board', and I have done. It's not really any more complicated than that."
Stuart Fenton, managing director of QuantiX - who used to head up Dabs' rival Insight's UK business - said he was surprised Atherton had returned to the industry given his "enormously successful property business".
"Be in no doubt, this is a man who does not need to work," he said.
"I competed with Atherton through the 90s and early 2000s when his business started as a mac-orientated mail-order IT products firm following his rise through the public sector. Incredibly astute, with a gargantuan general knowledge, he was brilliant with IT systems that made Dabs a very slick operation. He was first to embrace and exploit the online business and low cost model. He has certainly been mimicked over the years by Choice, eBuyer and others, but never with the same level of success."
Mark Needham, chairman of distributor Widget, said Atherton would "liven up Entatech's board meetings".
"We remember selling to Dave when he was a retailer," Needham said. "He was a great customer for us back in the day and a strong personality. I'm sure he will be beneficial to Entatech."
Andy Dow, marketing director at Tech Data, said it is "great to have an old friend back in the channel".
Reports from the time suggest Atherton was at one point hoping to sell Dabs for £90m and Fenton said he felt by the time it sold up in 2006 the firm fortunes were on the wane.
"Towards the end of his tenure, I felt that he was surpassed by the likes of Insight, PC World Business (now defunct after Derek Lloyd left), Softcat, Kelway and others because he remained focused on B2C which the rest had more-or-less abandoned," Fenton said. "He didn't have a strong outbound sales focus and so the business was reactive to marketing. It wasn't the future of B2B IT selling - it was and still largely is a proactive sales industry. So instead of being in super cheap locations with super cheap people - you needed to be in cities, near universities and pay good money for good people with rich commission plans. I suspect he would agree that he missed that boat."
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