'I'm fearful about what happens in the longer term' - Reseller bosses on Covid aftershocks, hiring challenges and ESG roadmaps

16 channel executives gathered at The Swan at The Globe in London to swap experiences of how the last two years shaped the industry, and their hopes and fears for the future

Reseller and distributor bosses came together by the banks of the Thames at The Swan at The Globe in London yesterday afternoon to swap experiences about how the last two years have affected their business and share their hopes and fears for the future.

Photos from the afternoon, which was held in association with Agilitas, can be viewed here and the full line-up of guests who attended can be found below.

Reseller bosses exchanged ideas about how the last two years - which have been dominated by the Covid pandemic, supply chain shortages and recruitment challenges - have impacted their business.

Research from CRN's VAR 500 found that the largest players in the channel were buoyed by large product sales to public sector customers to facilitate remote working. For the smaller firms in the top 500, many had to shift towards selling services in order to remain relevant to their customers.

Transputec CEO and co-founder Sonny Sehgal said that the IT sector has thrived over the last two years off the back of demand for remote working.

"None of us around this table suffered any massive downturn. We've all had a pretty good run, because everyone wanted to get more kit and to get their end users out deployed and working well and I think we've all benefitted from that," he said.

"I haven't heard of any major downturn from anybody working in the IT sector. I was a bit shocked at the beginning like a lot of people were - wondering how we were going to deal with this. Moving everyone to home working and getting that adoption was really interesting and it put a lot of pressure on companies like us to enable our customers to get them in that mode of operating as well."

One channel exec added that larger resellers benefitted as smaller competitors putting staff on furlough, rendering them unable to look after their customers.

"We really benefitted from smaller competitors having put all their staff on furlough and not being able to deliver to client needs. So long as you were funded, then you could continue through."

Despite reseller bosses pointing to the industry's health and resilience over the last two years, others sounded a warning about what the long-lasting consequences will be over the next 12 to 18 months.

Simon Warlde, managing director at bluesource UK, said that he fears for young candidates entering the industry.

"I think it has been a great couple of years, but I'm a bit fearful about what happens in the longer term, particularly about youngsters getting trained in a hybrid environment. For us, we found ourselves recruiting more mature candidates because we just don't have the infrastructure to take on youngsters and train them up in that non-office environment," he said.

"It forced us to make a decision about what we are, which is good, but I am slightly fearful for who is going to come up and replace us in the long term."

Agilitas CEO Shaun Lynn argued that the true effects of Covid have not been felt yet, and fears that the next six to 12 months could be tough for some businesses - even in the IT sector.

"Do you think the full effects of Covid have really been felt yet? Because I would argue that they haven't," he said.

"Covid for the tech sector was very good, because of the amount of money that was printed and went into it. There's been challenges, but essentially the government tried to get every sector going and has put a lot of money behind it. But now it's the fact that we've pretty much run out of money and can't print much more that we've now got three big issues which are all going to come and bite.

"You've got dollar value which is going to affect the market, you've got interest rates - most of the businesses have quite a lot of leverage in them, so that's going to hurt. And you've got resources and quality of resource which costs more, is more difficult to manage and wants more soft benefits, so in my view, the effect of Covid is coming and I think we're going to see more businesses struggle or go out of business, or more consolidation opportunities in the next six to 12 months."

The conversation also turned to how the industry can continue to add value for their customers post-pandemic. Lee Dutton from Misco said that his company derives value from effective account management, which allows it to steal business away from the industry's largest players.

"When I think about the really big players in the industry, smaller customers are such a small part of the market that by giving them a better service we can take a chunk out of the big boys without them really noticing," he said.

"I look at the CRN Top 100 now and look at it 10 years ago, the value in those top companies and the revenue they generate is absolutely huge. But we can offer a better service to those customers who are just so small fry that they would get lost in such a big organisation."

For Econocom's UK, Ireland and North America managing director, Frances Weston, taking a joint up approach has been crucial.

"What's really worked for Trams and Econocom is that Trams has benefitted from a network effect which essentially means they're able to widen their value proposition to their underlying clients," she said.

"Before, it was classic reseller shifting tin and moving X to Y. Now it's moving X to Y and then providing a service element on it, or a leasing and a recycling element to it and creating that entire stream and conversation in one hit rather than just a fragment of a discussion.

"For me I look at that as pure, old-fashioned margin accrual from every single step rather than just looking at one single line and doing that day in and day out."

Execs also highlighted working on their ESG policies as a key priority in the months and years ahead. Sehgal from Transputec said his firm has adopted electric cars across the business, while also moving towards eco-friendly options in office spaces.

He said that actually putting in place a sustainability strategy can come at a significant cost for resellers.

"For most resellers, it's a net new change for us and it costs a lot of money. It affects your bottom line to achieve a sustainability road map and accreditations. But it's important from a customer perspective; they want to see your sustainability statements," he said.

Kyocera's CMO, Steve Pearce, meanwhile added that be believes creating a truly sustainability culture within the channel will take time and will depend on the next generation coming through into senior positions.

"We're sales people at heart. But it shouldn't be about trying to sell sustainability. What we're trying to do is make a cultural change for the business so it becomes a cultural part of the company rather than a sales mechanism - and we haven't achieved that yet. It's a cultural shift, and personally I think that's going to come as a generational shift - I think it's that far off."