‘We are profitable in all areas’: Distology CEO on new vendor tier and crisis management

Hayley Roberts reflects on channel changes, the impact of tariffs, and a decade-long involvement in the channel

As Distology recently celebrated its tenth anniversary, CRN sat down with Hayley Roberts, its CEO, to discuss the distributor’s new partner tier, EBITDA turnover, and response to the tariffs.

While the company has not yet been impacted the US government’s decisions, Roberts expects to see a shake-up in the future.

“A couple of our vendors have hardware elements, so of course we might see changes in manufacturing and cost.

“The exchange rate fluctuations are probably our biggest immediate concern, and something we’re constantly monitoring.”

This is far from Roberts – or Distology’s - first experience of a shaky market. The CEO started diversifying the company’s activities when COVID impacted the industry.

While not refocusing from cyber, Distology is now also involved in identity, workforce, and operational technology security.

“Some of our vendors weren’t doing what we needed them to do, and we needed a much more proactive approach to new technology areas,” she says.

“We’re doubling down on understanding what new technology is out there.”

New targets and new challenges

Having recently passed the £60m annual revenue benchmark, Roberts wants to make sure the company keeps growing sustainably.

She wants to secure the foundations to avoid falling apart under pressure.

This year, the distie grew EBITDA by 23 per cent.

“Just because top-line revenue is growing doesn’t mean your operations are keeping up.

“Growth is great, but it has to be for the right reasons.”

While she considers revenue an important data point, she is more focused on margin growth, as the company is PE-backed.

In 2021, private equity firm NorthEdge invested in Distology to fuel the firm’s ambitions.

Vendor tier

As a boutique distie, the CEO explains she tends to approach vendors as much as they approach Distology.

“We want to work with relevant, high-quality technology.”

To do so, the company recently launched a vendor tier, split into Scale (top), Accelerate (middle), and Develop (entry).

As of today, it counts five Scale vendors.

These companies usually have between £3.5m to £4m in turnover with Distology.

They get dedicated resource across technical sales, partner team, solutions sales team, marketing support, and a dedicated programme of activities.

Most of its partnering vendors fall within the Accelerate tier.

These companies do not get a dedicated sales specialist, but receive a full team across departments, including access to the partner team.

The lowest tier, Develop, comprises companies which are usually early stage.

“They perhaps have no in-country presence, a smaller customer base, or are just beginning their go-to-market efforts,” Roberts tells CRN.

“We can’t assign dedicated full-time heads unless there’s demonstrated growth and investment from the vendor.

“We’ve taken a lot of risks with vendors in the past and seen little reward, so we’ve had to get more structured.

“We want vendors to aspire to move up.”

A vendor that recently moved up tier was OPSWAT, who came in as an Accelerate vendor, and was recently promoted to Scale.

Roberts explains she is confident in this strategy, which allows the distie to allocate resources accordingly.

“We have a team that works with them to get them to the next level.

“They have regular cadence, associated resources - they’re not just thrown into a pot and forgotten.

“In fact, in the early days with Develop vendors, we’re arguably doing more, just in a different way.

“It’s very consultative, and after six months, we’ll review together whether they are moving up or not.

“The level of work is still there, but more concentrated, and rightly so, because we need to be smart about resource allocation.”

A changing channel

While the distributor tries to go above and beyond to make the best partnerships,

channel firms have changed their business approach over the past decade.

Many have shifted towards MSP models, as vendors are leaning into MSP delivery.

“True MSP means monthly billing, easier onboarding and offboarding, more flexibility.

“It’s service-led and fast-growing.”

Some vendors, on the other hand, still struggle with the channel, according to the CEO.

“There’s still a strong desire for channel, but they struggle with the idea of ‘giving away’ revenue to partners.

“It’s still framed that way, as giving something up, rather than investing in channel.

“It takes time to change that.”