SCC's datacentre investments are paying dividends - Rigby

Birmingham-based integrator sees services revenue rocket in H1 financials, as per its development plan

Ambitious integrator SCC is hailing the success of its multi-million pound investment in datacentres as it celebrates a successful financial half year.

The firm, which sold its SDG distribution business to Tech Data in 2012 and employs just over 1,760 people in the UK, pledged at the time to invest in bolstering and growing its services business, both organically and through acquisition.

It has since bought print services specialist M2 and most recently the datacentre business from energy giant SSE and invested heavily in services over the past three to four years, with investments totalling almost £50m.

The SCC Group (incorporating France, Spain and Romania) increased its revenue by 9.5 per cent to £1.74bn in the last financial year to March 2014, and by the end of September, UK turnover alone had reached £304m with 12.5 per cent gross margins. Services turnover had grown 11 per cent to £69m by H1 end, with gross profit up 24 per cent.

Speaking to CRN, James Rigby (pictured), chief executive of SCC said the firm had made a huge investment in bolstering its services – operating three platforms – its ‘Sentinal’ secure government platform, a private sector platform and finally a backup as a service.

Rigby said the firm was well on track to hit his EBITDA predictions of £50m by 2018.

“Now we have made all the investment it is all margin," he explained. "We want to annuitize more of our offerings and make us more strategic to customers. For our datacentre services (DCS) business for example, turnover has increased 90 per cent to £11m and gross margin has grown 360 per cent."

He added that managed services business was also up four per cent and its brand new division – Flexible Resource – has grown from nothing to £2.6m in six months. Professional services revenue has grown 27 per cent as well, he added.

And following two successful acquisitions, the group has not ruled out further acquisition, he said, but the businesses had to be services based, and exactly the right fit.

The only area of the business which was down was product, Rigby explained, but the firm had planned for this.

“Product is still important, but we don’t want very low margin business with customers that we can’t do anything else with,” he said. “We are going to say no to stuff like that in the future.”

He added that the firm’s sweet spot was clients with between 500 and 7,000 seats.

“I don’t think there are too many of us in the middle,” he said. “We have the resources to provide a proper end-to-end service to our customers from the datacentre right through to the managed desktop.”

Rigby said there was ‘absolutely’ a place for resellers in the cloud equation, and business confidence has been returning since last October.

“For large accounts, cloud is irrelevant because they often have their own datacentres and they have grown weary of the cloud.

“But it is definitely a hot topic for mid-sized companies and there is absolutely a place for resellers in that equation. Yes it does mean reskilling sales people and technicians, but it means a more consultative, value-added approach.

“The role for resellers is to help customers with the complexity of IT, which is exploding,” he said. “We tie everything together and help them reap the benefits of their IT.”