Dealer Profile: Feats of Ledger's Domain

Data Connectivity?s Neil Ledger started out as a trainee for Chelsea FC, but now he?s tackling the world of networking. Emma Tyrrell charts his progress from centre-half to centre stage

Neil Ledger will gamble on anything, from two flies crawling across a window to the future of the networking industry. But the big bet now is whether he and his three fellow directors will stay on at their Datrontech subsidiary after the two-year earn-out period ends in May 1998.

In June last year, 40-year-old Ledger cashed in on a lifetime of risk-taking when he sold networking distributor Data Connectivity to Datrontech for #6.4 million. This month, he and fellow directors Ian Morris, Andi Robinson and Mike Warland started talks with Datrontech about Connectivity?s direction and their future within the Datrontech Group.

So will Ledger settle down with his #1.6 million share of the loot, or will he continue chasing the buzz of new successes? Bets are invited and the book is running.

Datrontech?s position appears clear. Chief executive Steve King says he wants the Connectivity boys to stay on after May. But then Ledger has never been known for his reluctance to take risks.

As a boy, all he wanted to be was a professional footballer. So he walked out of school at 14 with no qualifications and signed up as an apprentice for Chelsea Football Club.

?I thought I was Jack the Lad and had it made,? he says.

But Jack?s ego took a bit of a thumping after two years with the club, when Ledger was one of the 150 out of 160 trainees to be let go from the club.

?Probably with hindsight it would have been better if I?d gone to a less glamorous club or worked a little bit harder. But at Chelsea you do get carried away with it. Until that big release letter comes.?

It is hard to imagine Ledger as the nippy little centre-half he once was. Variously described as a ?big bastard? and a ?big softie?, he stands over 6ft tall and has the girth of a chap who has eating and drinking placed fairly high up on his list of interests.

?I was a racing snake in my football days,? he says. ?But I played in a charity match eight weeks ago and I?m still recovering.?

After spending a short stint on Aldershot?s youth football scheme, Ledger played semi-professional for seven years for non-league teams Guildford City and Addlestone & Weybridge; his football career finally ending with a knee injury in 1980. During this time, the aggressive approach he now applies to business often spilled over on to the football pitch. He jokes: ?I never started a season because I was always suspended from the end of the previous one.?

But Ledger is more of a Dennis Wise than a Vinnie Jones. Colleagues describe him as hard but fair in business and a complete marshmallow out of it.

Richard Jackson, hired and also later poached by Ledger, who is now the new business director at competitor Data Tec, says of him: ?Neil is a lot of fun and very easy to get on with. But he is a shrewd businessman and doesn?t suffer fools gladly.?

Ledger began his business selling advertising space on the Surrey Advertiser in 1976, followed by a spell at computer bureau Jayserve. But by the time he left Addlestone & Weybridge FC, he was working for French company GSI, handling sales, marketing and distribution for the Sinclair account.

He ran a team of 200 people marketing products such as the ZX80, ZX81 and the infamous Sinclair C5.

Sinclair was acquired by Amstrad in1986, forcing GSI to close down the division. ?That was probably the most difficult time in my career, having to lay off 200 people,? he says.

Ledger then joined Rapid Recall, where he developed a loathing for box-shifting. ?I ran a fulfilment, commodity division, absolutely hated it and walked out after six months. It wasn?t selling, it was order taking and buying business at month end. Anyone can give it away.?

He joined Logitek in early 1987 as an area sales manager and was head-hunted a year later by recent startup Data Guardian, run by Clive Cooper and Ged Blackman.

?When I joined they had done #500,000 in turnover in the last year, but I thought networking was the thing to get into,? he says. ?It was great fun, being in at the early stages, helping to grow the business, building relationships with manufacturers and Vars and finding a niche for networking products.?

This approach has defined Ledger?s career ever since. Data Guardian had to go out, find the Vars and work on them. Ledger admits many resellers were sceptical and had to be persuaded of the big growth potential in networking.

After two years Ledger was made sales director, and by the time he left in 1992 he had built up a sales team of 16. But his departure was acrimonious ? after leading a failed MBO, Ledger refused to resign and was made redundant.

He claims the MBO was motivated by the need to tie in salesmen Robinson and Morris to the business. ?Ged and Clive weren?t happy to relinquish any of their shareholding to do that, so I suggested that we buy them out. They asked us to come up with #1 million, which we thought was a little overpriced, but we believed we could take the business a lot further without them in it. We raised the right money and then they had second thoughts.?

Ledger, Robinson, Morris and Warland left and set up Data Connectivity with their own money and a #25,000 loan from cabling company Network Connections. Within 48 hours, 11 of the 12 Data Guardian manufacturers had signed the fledgling firm as a distributor. Ten months later the team bought out Network Connections? share, doubling their investment. The distributor has since built its reputation on taking niche, and often unknown, products to market.

Ledger says: ?I don?t like an easy life. That?s for the fulfilment houses of this world. Once a product matures, all it does is fall off the back of a marketing machine. We prefer to take a niche product that competes against those products, take it to market and then sell it on its features and benefits. Then two things happen: we hold margin and the Var holds margin.?

Connectivity looks for one or two new niche products each year. Its first signing this year was Xylan, but it is still searching for the second. It has 14 vendors, including ACC, Ascend, Gandalf and Newbridge.

Ledger claims one of Connectivity?s differentiators is that its sales people can answer front-line technical support questions. ?If a reseller phones us and says I want 10 routers, we don?t ask for the order number. We ask what it?s for, what the application is, why they want that particular brand and go through the normal sales cycle. With other distributors it?s ?what price have you been offered? Ooh we can beat that!?

Connectivity makes more net profit than most distributors make gross ? about nine per cent a year. In 1996 it made a net profit of #760,000 on a turnover of #8 million. It now has 32 staff and expects sales of about #11 million for 1997.

By contrast, Data Guardian?s last available figures, before Data Tec?s takeover in 1996, show a profit of #300,000 on a turnover of #9 million.

These figures plus Ledger?s reputation inevitably attracted the attention of bigger companies and prompted Datrontech?s acquisition bid.

Datrontech, however, recognises that Connectivity?s success is due to the people running it. Steve King says: ?Neil?s personality is reflected in the business. He is serious, but has great humour. He is single-minded in the quality of people, training and product. His approach filters down throughout all the business.?

Ledger measures his career, both football and business, in terms of fun. His glee in describing how Guildford City FC was announced triumphantly into Guildford nightclubs, almost makes you believe he has no regrets about Chelsea.

Similarly, he claims business success is not just about the bottom line. He has a reputation for looking after his staff and is keen that they get satisfaction out of the job.

He encourages a healthy irreverence among staff and colleagues, with sales director Morris happily describing Ledger?s talent for dribbling ? and we?re not talking football. On a night flight back from Minneapolis, Ledger and Morris took sleeping tablets to see them through until London.

Morris says: ?We?re both big blokes and we were wedged in. When I woke up Ledge was sleeping on the bloke next to him?s shoulder and had dribbled all down his shirt. This guy was completely soaked, but when he woke up Ledge denied all knowledge and blamed it all on him.?

?You?ve got to enjoy life, it?s not a dress rehearsal,? insists Ledger. ?The happier you are the better the business is. It?s easy for some hard-nosed bastard to turn around and say to an employee ?you?re wrong for us, get out of here?. But both of you went into that relationship, so if it?s not right, be upfront and see if there is something else for them. You have to make sure that it works.?

Ledger claims it never entered his mind that the deal with Datrontech might not work out. ?I think we got a good price for it at the time and we got a good partner. Datrontech has done exactly as it said it would and given us complete autonomy to run our business.?

But will Connectivity have the same autonomy after May? And will the directors be there to find out?

Ledger admits he has achieved his main goal of providing his family with security for the future. Happily married to Bev for the past 18 years, his wife and two teenage children are the most important thing in the world to him.

Does this mean there are no more challenges to be faced? It seems unlikely.

Ledger says talks about Connectivity?s future will be complete by October. Datrontech recently merged operations in its core memory and PC component business with subsidiaries Kingston and Peripherique. The Datrontech business made 25 staff redundant as a result.

King doesn?t rule out consolidation involving Connectivity, which works closely with fellow subsidiary Xenon, Datrontech?s server business and Summit Peripherals. But he insists the brand name and the subsidiary?s autonomy will continue. King says: ?We keep being questioned in the press and being told it makes more sense for all the Datrontech subsidiaries to merge. No it doesn?t. The Datrontech brand name stands for memory, but other brands are different and we must go where their image leads.?

Ledger agrees: ?King?s principle is to gain strength through specialisation. If we merged all the businesses, we could end up with a Frontline, a fulfilment house. That?s one of the good things about Mark Mulford (Datrontech Group MD) coming on board ? he?s been there, seen it and doesn?t want to be in that again. We may get central logistics and administration at some point, but sales and marketing will be very much their own entities.?

Ledger sees great potential for Datrontech?s subsidiaries to work together in passing on leads. He believes Mulford will actively encourage this with ?double bubble? commission.

One opportunity for Connectivity, which specialises in Lan applications, is to work closely with Datrontech?s remote access and mobile communications subsidiary Portable Add-Ons.

Ledger would like to stay. ?We went through a lull for about three months after the acquisition, thinking we?ve sold out for #6.4 million, and taking it a little easier,? he says. ?But it?s all about job satisfaction and enjoying it. I?m fired up again and the rest of the team are as well. I don?t know what we?ll be doing, but we?d like to stay on after May.?