US reseller giant CDI opens up on plans to expand in the UK

$650m-revenue giant CDI has already launched new offices in Slough and Dublin, but CEO Rich Falcone tells CRN there’s much more to come in growing its international footprint

US reseller giant CDI is looking to become a £50m-revenue player in the UK within the next three years after officially establishing an international headquarters in the UK last month.

Based in New York, CDI bills itself as a hybrid IT solutions provider which turns over in excess of $650m each year.

Founded in 1995, CDI has risen to become one of the US' most prominent channel partners. In 2019 it landed private equity funding from mid-market investor One Equity Partners, which has previously invested in European resellers including Italian VAR Lutech and Norway-based software reseller Crayon.

CDI set up a new international organisation called CDII (CDI International) last month. Based in Slough, Berkshire, the new entity also has an office in Dublin.

Along with establishing the new international division, the US firm appointed former Telent head Adam Kemp as president of its international operations.

American resellers have been expanding into the UK in their droves in recent years. Alongside CDW's acquisition of Kelway in 2014, other companies such as WWT, Insight, SHI, Zones, Paragon Micro and most recently Presidio have all crossed the Atlantic and built successful businesses in the UK.

In fact, CRN's Top VARs report found that 30 of the UK's top 100 partners by revenue are now based internationally, with US-headquartered firms accounting for 12 out of that 30.

Speaking to CRN, Kemp said that he is confident CDII will become another successful US export. He said he expects the firm to become a £50m revenue operation in the UK within the next three years. The milestone would catapult the business into the top 100 resellers in the country, according to CRN's Top VARs.

"We're a multi-million pound business as we stand. We are confident that within three years this could be a £50m turnover business - without acquisition [and] without huge business development in the UK. That's a large number, but bizarrely, is a relatively conservative target," said Kemp.

At first, the international operation will primarily help to serve CDI's US customers that have business overseas, Kemp said with CDII providing "boots on the street" engagement to fulfil on-site infrastructure services for these customers.

But Kemp added that CDII is already acquiring net new customers in the UK market and will continue to do so as part of its expansion strategy.

"Over time we will look to bring on new clients in the UK. The initial design of this expansion was to support the CDI international client base. But, as our capabilities expand, we will, and we are, picking up local customers."

CDI's offering spans across traditional infrastructure services, managed services, digital marketplace and public cloud infrastructure services.

Its CEO Rich Falcone highlighted its recent investments in ServiceNow, as well as in all seven of VMWare's Master Service Competencies, as important steps in transforming CDI into a modern day solution provider.

He said that he sees a sizable opportunity for CDI to take market share from its competitors which he claims are failing - or unwilling - to keep pace with the market today.

"You don't just spin up a ServiceNow practice; it's a multimillion-dollar decision. When it comes to a lot of these advanced SecOps, or automation, or ServiceNow capabilities, a lot of these other integrators know they need to do it, but they're not sure if they have the time or capital to do it," he said.

"We're seeing a lot of share shifting," he added.

"Some competitors have customers they've been working with for 10-plus years. It's not that they don't like the people, they're just realising they can't give the outcome that our clients are demanding of us in the world we're living in today. And they're moving away from that competitor and over to CDI whether that's overseas or locally," he said.

CDI has made seven acquisitions since 2009, four of which have come in the last two years following its investment from One Equity Partners in 2019.

Falcone said that he's discussing a potential acquisition with a company outside of the US at least "once every two weeks", but stressed that any M&A would be to bring in new technology skills into the business rather than adding scale to what it already does.

"If you look at Kintyre [which CDI acquired earlier this year] they brought us that DevSecOps capability that we didn't have before Kintyre. They happen to be based in Delaware, but if they were based in Paris we still would have done the deal," he said.

"Don't get me wrong, we acquire for geographic expansion, but I think for the right capabilities it doesn't really matter anymore where they're located."