'We're in a real sweet spot of the market' - Nuvias rolls out Digital offering as it sets €1bn revenue goal

Nuvias Digital will support partners with as-a-service and subscription-based selling as it sets itself three-year revenue goal

Nuvias has launched new on-demand and subscription services which it claims will support partners in embracing digital sales models.

Nuvias Digital is divided into four tools: SkillUP, PowerUP, Nuvias Subscription Services and Nuvias Supply Chain Portal.

SkillUP and PowerUP offer on-demand training and on-demand marketing and communications respectively.

Subscription Services meanwhile enable automation and provisioning, including as-a-service subscriptions, for Watchguard and Kaspersky products, using embedded Nuvias Capital financing solutions.

Lastly, Supply Chain Portal enables real-time inventory and order tracking, Nuvias claims.

Additional features and vendor products will be added to Nuvias Digital on an "ongoing basis", with Bitdefender and Checkpoint subscription services set to be coming soon.

Nuvias Digital is available immediately, Nuvias claims, through single sign-on access.

Nuvias CEO Simon England told CRN that the suite of on-demand tools will support partners in executing as-a-service-based sales models for their customers.

Unlike services from other distributors, England said that Nuvias Digital goes well beyond just supporting a subscription-based transaction, or converting a capex transaction to an opex one.

He said Nuvias' offering is designed to help partners find success in subscription-based sales models.

"Moving towards the subscription economy actually changes the sales motion quite significantly," said England.

"Because the actual transaction that is won is only maybe a quarter of the size or maybe less of a perpetual licence model, and it requires three annual renewals just to get the same amount of volume. Engagement with the customer to support that next step in that procurement becomes a much bigger chunk of the business."

"There is more required after the sales effort to secure the success of the subscription model. And this is something that we've put a set of digital tools around," he added.

England said he believes Nuvias, which specialises across cybersecurity, intelligent networking and unified comms, is sitting in a "sweet spot" of the market and is bullish about the distributor's prospects.

He told CRN that Nuvias is aiming to more than double its revenues to €1bn (£857m) over the next three years. The distributor achieved €475m in sales for its year ending 31 March 2021, with UK revenues soaring by 11 per cent to £220.7m.

England said that he's confident Nuvias will be able to continue growing its top line revenue at a fast rate, despite the diluting effect expected from a shift to subscription selling.

"Look at Nuvias Digital as more than just a transaction platform. In terms of the revenue, yes, of course, if we expect that a certain percentage of our business will move from a perpetual license model, for example, to a subscription service model and that will also affect the revenue line, and the same for partners.

"But we believe that the growth that we're seeing in the business will more than compensate the potentially diluting value against the top level revenue line coming from a growth in subscription services. We're bullish in the regard that we believe that we can grow both on subscription services and on our top line revenue number."

Mergers and acquisitions will play a part in turbocharging the Nuvias business towards its €1bn goal, England said, but organic investments such as Nuvias Digital will also help partners "tool up" for new ways of selling.

"The €1bn revenue goal is an aspiration that we hold on to with full backing from our shareholders," said England.

"We'll be expanding our base, both from a technology stand point and a customer segment standpoint, we believe there's also room there and will be accelerating with M&A. Really with an output of saying we believe we're in a in a real sweet spot of the market."

England did not say outright what form Nuvias' M&A strategy will take, but he said that the distributor's centralised back office functions will enable it to scale out into more countries very easily.

"We see an opportunity to accelerate against our strategies is by bringing in competent skill sets and tooling on the digital side. If you think of the journey of Nuvias through its original acquisitions, we have a scalable IT platform, we have a scalable logistics platform, we have a scalable back office," he said.

Several distributors have moved to capitalise on a perceived surge in demand for as-a-service models as of late. Ingram Micro, Tech Data and Arrow, Exclusive Networks and now Nuvias have all developed their own flavour of billing and aggregation platforms to adapt to cloud-based selling.

Newer "born in the cloud" entrants to the market, such as US firm Pax8, are also looking to disrupt the status quo by going all-in on as-a-service selling.

Its UK chief channel officer, Phylip Morgan, recently told CRN that the distributor is adding 120 staff every month, claiming that "distribution is broken."

When CRN asked England about the success of new rivals like Pax8, he agreed that the competitive landscape is changing and distributors need to adapt.

"I think there was a time when distribution didn't know quite where to play in cloud," he said.

"If you take a wider look at the channel, and a wider look at distribution, then there were still distributors out there who were getting a lot of their value from the logistic services. We support global logistics, we support global project rollouts for our partners, we believe that's a value add and we define ourselves via a logistics value add. Then there was a time when, for many vendors, if you would have asked them why they work with distribution, the answer maybe would have not been logistics anymore, it would have been that they helped me by providing credit to so many parties, because the vendors don't want to provide credit themselves. So there was a financial merit in having distribution."

England argued that Nuvias was created as a cloud business from its very beginning.

"I really believe that the evolution of the cloud model has really emphasized the need in distribution to understand their role as a go to market partner. And some of distributors will embrace faster than others and others are maybe also held up a little bit more in their legacy investments that they've made. If you've invested in significant warehouses then you're going to struggle to accept that maybe working with third party providers can be a cheaper way and the most valuable way to do it," he said.

"If distributors look at their value proposition to be supporting partners in a changing cloud environment, I think distribution has to evolve - and I think it is evolving."