Bytes' sales soar thanks to Microsoft boom

Revenue for last fiscal year up 18 per cent annually

Sales at Bytes Software jumped 18 per cent in the last year thanks partly to booming sales of Microsoft licences.

For the 12 months to 29 February, revenue at the Leatherhead-based reseller rose 18 per cent year on year to £194m, while its net operating profits jumped 22 per cent annually to £7.9m, according to managing director Neil Murphy, who spoke to CRN.

The sales boost was partly accounted for by a 20 per cent increase in Microsoft sales, which Murphy said accounts for about 70 per cent of the company's business. On top of that, overall services revenue jumped from £4m to £6m, while the security division saw sales soar 30 per cent over the same period.

Microsoft has made big changes to its channel model in recent years, providing incentives to partners that encourage the consumption of its cloud services and moving away from traditional sales. This has prompted big changes at some of its biggest resellers, some of which have had to overhaul their sales commission structures as a result.

Murphy (pictured) said his sales force has responded well, partly because Microsoft is such a strong and strategic partner.

"Because Microsoft is such a significant part of our overall revenue, the [sales force] has essentially spent more time and effort in understanding that technology and the solutions," he said. "It has been a lot easier for us than it has for some of our competitors who are selling a lot of other products.

"Our sales force is not a telephone sales force, it is field-based, so it is out in front of clients articulating solutions. They are not desk-based like at Softcat or Insight where a lot of people are on phones.

"I think it is [an advantage] because we get to understand the customer requirements better and because we are face to face, we get to articulate the solutions more eloquently. I think that makes a big difference."

Last year, Bytes formulated a five-year plan during which it wanted to double its profits from £6.5m by 2020. Murphy said the company is "well on course to do that" and did not rule out making acquisitions along the way.