Shared destiny
Comstor is synonymous with Cisco in the UK, but the duo are jointly targeting new customers outside Cisco's networking stronghold in 2016, as Doug Woodburn reports
For a company that claims Cisco is "in its DNA", Comstor is arguably under more pressure to make the right bets with the networking giant than any other distributor.
The Westcon-owned distie claims to represent more than half of Cisco's UK business, and in turn relies on Cisco for 95 per cent of its own sales.
And never has making the right investment decisions been more important for Comstor as Cisco charges full bore into security and emerging markets such as the Internet of Things (IoT), hyperconvergence and SDN.
"I think we will see growth this year, and that is partly because we've got that real focus into areas where Cisco is seeing strong growth," said Comstor UK lead Clive Hailstone.
Chief among Comstor's big bets this year is security, an area Cisco CEO Chuck Robbins recently said remains "the most critical priority" for its customers. Cisco's total security sales leapt 11 per cent year on year in its most recent quarter, with advanced threat security up 180 per cent and web security up 40 per cent.
Hailstone said the Cirencester-based distributor had responded to Cisco's call for one of its distributors to get laser-focused on security.
"There was a bit of concern that Cisco might go and sign a specialist security distributor," he said.
"But we said we are absolutely able to do that and are willing to co-invest in becoming a security distributor that happens to have security in our portfolio, rather than a Cisco distributor that sells Cisco."
In the last six months, the distributor claims its partners have carried out 46 security assessments using Cisco's firewall appliances, generating a pipeline of $1.4m.
Comstor has also thrown its weight behind Arbor Networks, a DDoS mitigation vendor with which Cisco has an OEM relationship. Recent Cisco acquisition OpenDNS, as well as Cisco-owned wireless vendor Meraki, will also form part of the distributor's security offering.
Comstor UK commercial director Richard Carpenter said a key challenge will be dispelling the perception among end users and resellers that Cisco lacks clout in the security space.
"Cisco say they have 21 per cent market share, which makes them number one," he said. "But I came [to Comstor] from a security background and Cisco was never mentioned in the security marketplace. There's a real drive from Cisco to show the market that they have some really good solutions in their portfolio, and their aim is to stand up and be counted."
The professionals
Following the acquisition and integration of Cisco services firm Intact, professional services is Comstor's other key focus for the year ahead as it strives to help resellers get up to speed on newer areas of Cisco's portfolio, such as IoT, Hailstone said.
"If you look at Comstor, we've always wanted to be at the forefront of new technology; and the only way to do that is to have a services organisation that can stand alongside the partners and help them move into these new areas, whether that be IoT or software or hyperconvergence or security, which is the big focus," he said.
"Now we have this enhanced service string to our bow, it means that we can really push the envelope in terms of new partners. If you look at the areas Cisco is going into - IoT is the classic one - all of a sudden there's a whole new partner community that Cisco has a real interest in working with.
"But Cisco can be quite a complex beast to get your head around. Cisco makes it complex and we can simplify it."
More than 95 per cent of Comstor's revenues come from Cisco, with the remainder drawn from complementary technology such as Plantronics headsets, APC power supplies and hyperconverged infrastructure from Simplivity.
A short-lived and doomed partnership with Cisco rival HP ProCurve (now HP Networking) at the turn of the last decade proves that Comstor works best when all its resources are pointed behind Cisco, Hailstone said.
"That was not one of our better decisions," Hailstone said.
"Cisco is absolutely in our DNA. We won't sell anything that competes with Cisco - it has always got to be part of a Cisco-centric solution."
Comstor's UK business trades with about 400 partners in any one month, which Hailstone said reflects its emphasis on building deep partnerships with select resellers.
"We tend to measure how many partners buy from across the full suite of Cisco products," he said. "We're not a broadliner, so we're never going to be touching thousands of partners. What works for us is where we're working with partners that really want to develop a Cisco business."
Hailstone (pictured below) revealed that Comstor is looking to bring on board 2,000 new mid-market end users in its current fiscal year, which started in March. This mirrors a similar mid-market quest at Cisco itself, he said.
"That's where having these intimate relationships with the partners really comes to bear," Hailstone said. "We want to hone in on a limited number of committed partners that can bring net-new mid-market customers to the table.
"The ultimate aim is not to enable partners to nick business from their neighbours; it's really about generating net-new business for us and Cisco, therefore [our metrics] are aimed at net-new end users."
Closer co-operation between Comstor and its sister brands, Avaya distributor Westcon UCC and security VAD Westcon Security, is also on the cards.
The three businesses were brought under the same roof in 2014, with key account managers now representing the trio for larger resellers.
"Previously, it was globally aligned along Comstor, Security and UCC, and now it is much more territory-aligned, with [UK boss] Tony Nevill now getting paid on the UK and Ireland number," Hailstone explained.
"We get together as one team, and will continue to work more closely together to make sure we are leveraging the back-end part of our business as effectively as possible, and having a single point of contact for that piece.
"The bit we don't want to dilute is the bit that differentiates us - that specialism, whether that's the Comstor-Cisco piece, or the security piece."
In October, Comstor parent Datatec announced that a business process outsourcing firm in Romania would take charge of some of the distributor's EMEA finance and operation functions. Some 300 of Westcon Group's 1,900 EMEA staff will be affected by the move, it said at the time.
Hailstone said the phased migration, which is set to be completed by mid-2017, is "progressing as it was designed".
"Our focus has always been on the sales and marketing and technology piece, and that will remain," he said. "What this does is bring together some of that operational piece as a Comstor-Westcon group, but really it's business as usual.
The big focus for us is to make sure we are adding value and touchpoints from a sales and marketing and tech point of view."
In its fiscal first-half ending 31 August 2015, Westcon Group saw global revenues rise 12 per cent year on year to $2.5bn, with Comstor's Cisco business generating 45 per cent of the total.
In the UK, Comstor enjoys the lion's share of the Cisco market, Hailstone claimed.
"Our market share is 50 per cent-plus," he said. "We always wanted to be, and remain, twice as large as our nearest competitor."