Exclusive Networks founder: We won't sell up - or sell out

Olivier Breittmayer vows to remain loyal to "market-making" roots despite his firm's new-found status as Europe's largest independent VAD

Exclusive Networks' chief executive insists the VAD can retain the "market-making" tag it started out with in 2003 despite it now being Europe's largest independent player, with revenues closing in on €500m.

Talking to CRN after the distributor announced its second acquisition in as many months, Olivier Breittmayer said he still snubs the advances of bigger vendors due to his ethos of working only with disruptive new technologies.

Paris-based Exclusive earlier this year pledged to make a string of acquisitions that will propel its turnover to €1bn by 2017.

Breittmayer said the private equity-backed distributor is on track to reach that goal after following up its acquisition of UAE distributor Secureway with its purchase of Benelux-based VAD Terach. The deal takes its turnover to about €20m in each of the Netherlands and Belgium.

An agreement with a third acquisition target - in an unspecified European country - is in the works and should be closed in the coming weeks, he revealed

But he rejected the contention that Exclusive is now a large outfit.

"People say we are big. We aren't - we are a federation of 15 dynamic companies," he said.

Gap in the market

When Breittmayer started Exclusive in 2003, he harboured no ambitions to grow outside of his home French market.

"I was working to help US vendors develop their business in Europe and started to see that distributors were not doing their job," he explained. "They were not pushing new technologies and were just doing fulfilment so my idea was to do it differently."

Breittmayer's ploy was to sign with new vendors only on an exclusive basis - hence the moniker - and many of Exclusive's vendor contracts today remain as sole-distributor relationships.

"Because this [model] was successful, the idea was to build it out of France but it wasn't to do something this big. After ten years, we discovered we are starting to get big."

But despite Exclusive's broader geographical footprint, the philosophy remains the same, Breittmayer said, adding that his firm refuses to take on empty revenues by signing with the more mature vendors that approach it.

Exclusive Networks' group marketing director Barrie Desmond added: "When you have to learn more about spreadsheets and forms you realise that the value is not in the technology. When vendors come to us saying ‘we need another distributor', quite often it's an admission there's no value left in their technology."

Breittmayer added: "Our focus is to have the reach of a big distributor, with the speciality of a small one. We try not to do what Avnet, Arrow and Computerlinks are doing. We try to have more attractive and disruptive technology. Our job is not just to distribute - we are not a logistics company. We are creating the market; that's in our DNA and we want to continue that."

Placing bets

Exclusive's high-touch approach carries a much higher cost of sale and the model only works as long as the bets it makes on emerging vendors are paying off, as it did with anti-malware FireEye this year, and has done in the past with the likes of Palo Alto and Fortinet.

"FireEye was probably our number-ten vendor in 2012 and in 2013 it was number three," Breittmayer said. "There's still a gap between [Palo Alto and Fortinet] and FireEye but I am 100-per-cent confident they will be close to the same level next year."

Breittmayer tipped two recent vendor signings that sit within its new big data unit - Nutanix and Tegile - for greatness in 2014, with emerging security vendors such as Bit9 also making an impact.

"I'm 100-per-cent confident that Nutanix will become a big one," Briettmayer said.

"Tegile is a combination of SSD, memory and deduplication - it is the sole storage vendor that has the complete solution and noone able to do the same thing at the moment."

Exclusive Networks' revenues are on course to hit €500m next year, making it by the far the region's largest independent VAD following the closure of Arrow's €230m gobble of Computerlinks a month ago.

"We have started to receive calls from vendors who had two distributors and now only have one and we are starting to see unhappy Computerlinks sales people in the market in several countries," Breittmayer said.

"I believe the integration will disturb them and they will lose momentum. It is a great opportunity for us."

Breittmayer reiterated that Exclusive will not consider its exit options until it has executed on its current plan.

"We took the decision at the beginning of the year to do aggressive acquisitions for two years, and organic growth, to go to €1bn," he said. "We are 100-per-cent focused on that and are on target."