Channel firms hold their nerve to make growth list

VARs attaining a place on this year's Tech Track list stress the importance of continual investment, regardless of economic climate

Channel firms that made the cut on this year's Tech Track list have stressed the importance of holding their nerve and continuing to invest during the last few years of economic uncertainty.

The list, compiled by Fast Track and published by the Sunday Times, ranks the UK's 100 fastest-growing privately owned tech firms. Companies are ranked by the compound annual growth rate (CAGR) of their top line over the last three financial years. Leading the pack in 2011 is online lender Wonga.com, which has grown sales by 361.29 per cent annually since 2008.

Telecoms service providers XConnect and Peach Telecom both made the top 10, placing fifth and ninth respectively, while IT consultancy Certeco placed 12th. Email security vendor Mimecast was 16th, while Cisco Gold partner Block Solutions claimed 35th position.

Building Block for growth
The south London-based VAR has enjoyed annual sales growth averaging 72.4 per cent over the last three years and posted a top line of £10.7m in its most recent financial year.

Managing director Jon Pickering (pictured) told ChannelWeb the firm was on course to post 50 per cent top-line growth for the first half of FY12. Block has also recently opened an office in Cheshire, he added.

"It is much more than a satellite office; it is a new strategic location for the business - we already have significant headcount up there: about a dozen people," said Pickering.

Growth in the last few years has been achieved by homing in on key verticals, including healthcare, finance and ecommerce, claimed the Block chief.

"You either stay at one size and potentially run the risk of stagnating with a customer base that is not going to grow, or you can look to acquire new and higher-profile customers and increase your reputation," he added.

Managed services specialist Comtact grabbed 42nd place on this year's Tech Track list, while software consultancy Content and Code placed 53rd. Another IT consultant to feature was London-based Ballintrae in 63rd. The firm has enjoyed annualised revenue growth of almost 50 per cent in the last three years, swelling sales to £5.8m.

Chief executive Ian Pearson said: "Our growth has been largely due to the talent that we employ and our continual development of new products and solutions that anticipate industry issues and reduce costs."

IT services house ControlCircle attained 66th place on the list, while hosting outfit UKFast lay in 76th position. In 80th spot is comms services provider Node4.

Managing director Andrew Gilbert (pictured) said: "We're well prepared to face the challenges and continue to grow aggressively. We have been successful by staying ahead of trends in cloud computing, data centres and communication, and this focus on innovation and reliability will always be at the forefront of what we do."

Invest to impress
One place below was Manchester-based Cisco, NetApp and VMware VAR ANS Group. The firm has grown sales by an average of 42 per cent annually to £29.4m. Turnover is set to be boosted further by its acquisition of storage reseller Alpha in November 2010.

ANS managing director Paul Sweeney (pictured) claimed that, in the current climate, it is more important than ever to be able to demonstrate to customers your financial stability. He added that when the recession bit hard three years ago, ANS had opted not to scale back planned investment.

"We took a conscious decision not to do that," said Sweeney. "Our investment in that period in marketing was bigger than ever. Our strategy was that we would get much more bang for our buck as we would stand out. Every pound we spent on marketing was worth twice as much."

The future's bright for Orange IS
VAR Orange Information Systems (IS) placed 84th on this year's list. Its revenue has enjoyed a CAGR of 41.8 per cent over the last three years, and now stands at £16.8m.

The firm, based near Tower Bridge, will hope to grow sales further through the recent launch of new reseller arm Orange IS Security Solutions. Group sales director Jody Pawson was another to stress the importance of maintaining spending on key growth initiatives.

"We do not want to be one of those resellers that stands still, with the same people selling into the same accounts," he added. "We have continued to market ourselves, continued to get out there in front of people and continued to recruit both technical and sales people. We have recently got our security business [up and running] and have a number of other businesses in the pipeline."

Oracle-specialised consultancy Rocela was one place below Orange IS. Sales have grown more than 40 per cent annually to £29.5m. Head of marketing Greg Rankin had a simple recipe for success. "We did two things this year that I feel helped our success," he said. "These were consistent hard work throughout the whole year, which is a given for any business, and reducing our customers' costs wherever necessary, reducing their complexities and making sure they are happy."

In 96th place on the Tech Track rundown was acquisitive IT services outfit Onyx Group. Neil Stephenson, chief executive of the north east-based firm, claimed acquisitions should be made as a complement to an already healthy firm.

"When the recession came in 2008, we bought two businesses, started two more and moved head office, all during the toughest year in living memory," he added. "I fully expect that we will continue to acquire and continue to grow in terms of geographic coverage. Often people do acquisitions as a substitute for organic growth. That is not the case for us - we make strategic acquisitions."