Sapphire Systems CEO: 'We want to quadruple in size over the next three years'

Boss of ambitious PE-backed SAP, Infor and ServiceNow partner opens up on ITOM acquisition and aggressive growth in the US.

Sapphire Systems is planning to quadruple the size of its business over the next three years as it senses "phenomenal" potential to grow in the US market.

The SAP, Infor and ServiceNow partner started the year with two acquisitions. The firm acquired UK-based ServiceNow partner ITOM Solution and then five days later bought up SAP partner Pioneer BI based in the US.

The London-based firm is being backed by private equity firm Horizon Capital after it acquired a majority stake in the business at the start of 2020.

At the time, Horizon Capital said it identified "huge potential for growth" in the ERP software space.

Speaking to CRN, Sapphire CEO Ian Caswell said he's planning to quadruple the size of its business over the next three years, with M&A expected to contribute around half of that growth.

Caswell said that he is in "exclusive conversations" with another acquisition prospect and expects to close at least two more M&A deals before the end of June.

"We're hoping we'll get another two acquisitions done in H1 and we hope we can expand in H2 with further ones. And we're planning to double our organic turnover in the next 3 years. So there's a lot of money going into that side as well," he said.

The CEO commented that its next acquisitions will focus on the US market. Around 200 of Sapphire's 900-strong customers are based in the US, added Caswell.

"We're particularly looking to expand in the US because our American business accounts for about 25 per cent of our revenue and the plan is to get that higher as a percentage of our total business," he said.

Sapphire has achieved solid organic growth in the US over the last few years, growing its business by 38 per cent in 2019.

And, despite the impact of Covid on its US customers, its Stateside business managed to grow by around three to four per cent in 2020.

Caswell said he is confident that organic revenues in the US will grow by more than 20 per cent this year based on the opportunities he sees for Sapphire across the Atlantic.

The CEO said that Sapphire's standing as the only partner in Manhattan that can offer SAP midmarket ERPs, SAP Business One and SAP Business By Design will put it in good stead to grow its market share further.

"The pandemic is still just rife in the states. We clearly would've done better if the pandemic hadn't hit but we still managed to grow last year in America whereas we didn't in the UK," he said.

"We're pretty confident that 20 per cent organic growth will happen based on our previous growth and the fact we're still tiny in an enormous market."

Meanwhile, Sapphire's UK business has big plans for its recently acquired ITOM Solution business. Caswell said ITOM's ServiceNow capabilities will be a "game changer" for Sapphire's customers

"We think it will really set us apart from our traditional competitors in the market," he said.

"We can use the technology ITOM bring us to really digitise our clients. We're developing workflow to join up all our customers' different applications. So it could be joining up SunSystems with their CRM and HR which could be from two other vendors. And then to automate it all and deploy AI over it as well.

"ITOM are really advanced in all of this and we think this particular strategic acquisition is actually a game changer for us as long as we get it right."

Caswell added that the UK market is starting to see some signs of recovery. January was an unusually busy month for Sapphire as come customers have chosen to press ahead with projects that were originally slated for last summer.

"The market is definitely subdued compared to what it was. If we look at the number of sales opportunities we are working, they tend to get closed six months hence, the lead recovery has been happening since June and July time in the UK and we're back to generating as many leads pre-Covid now," he said.

"So the market for us in terms of lead gen is back but we're not back to our usual bookings yet - except for January which was phenomenal."