Circle IT departs from MSP model in projects push

Welsh reseller on track for £11m revenues for 2015

Circle IT says it is on course to hit its £11m revenue goal this year as it shifts more of its business towards project-based contracts.

The Cardiff-headquartered firm previously based its business around managed services, but now it is much more orientated towards delivering projects involving the installation of infrastructure, Circle IT managing director Roger Harry (pictured) told CRN.

"With the MSP business, we tend to work within our facility," he said. "But when you are delivering projects, you are doing it from Scotland or Saudi Arabia, and hence our growth has been so much. A typical project is you going into a customer and fitting all the infrastructure; so there is lots of kit in there, some professional services and support. But previously we were just selling the support."

Two years ago, Circle IT was split 50 50 between projects and managed services, but Harry said now around 80 per cent of its business comes through projects, with this number likely to increase further.

"As we get to £20m, we are going to go down as low as 10 or 15 per cent of the business [from managed services]," he said.

Although Harry said he was "100-per-cent confident" in executing this projects-based strategy, he said it is riskier than the previous managed services model which guaranteed a steady stream of recurring revenue.

The Dell, Microsoft and VMware partner set its goal of £11m in revenues for its latest fiscal year ending 31 October, up from £7m for 2014, and Harry was confident the firm will meet that target. Harry has previously indicated to CRN, he wants to hit revenues of between £30m to £50m within the next three to five years.

Circle IT bases much of its strategy around its partnership with Dell, and Harry said he was very happy with the channel noises Dell has been making of late.

"Dell is very focused on working with the channel, and they are really making sure the channel knows what's going on," he said.

Harry added that Dell is creating a lot of leads for his business and passing a lot of opportunities to the channel at the moment.

Much of Circle IT's business has been driven out of the public sector and education in particular. But Harry said the reseller is also gaining traction in the healthcare market.

The firm has offices in Reading and a recently expanded base in Cardiff, with a total headcount of 90 staff.