New Change Organisation CEO slams 'parasitic' grey market

Serial entrepreneur Adrian Barnard claims independent distributors can support the authorised channel as he takes the helm of The Change Organisation

Independent distributors have "a leading role to play" in the IT channel, according to the new CEO of The Change Organisation.

Adrian Barnard joined the 23-year-old distributor last month having founded and sold two communication companies - Modern Communications and Prime Networks - and said he wants to raise the firm's profile.

As well as independently distributing hardware and software from the major vendors, The Change Organisation is also an official distributor of audiovisual manufacturers Triumph Board, RepeatSoftware, Spinetix, Scala, Smart-e and Unicol.

High up on Barnard's agenda at the helm, he says, is distancing the independent sector from the "parasitic" companies operating in the grey market and counterfeit stock.

"It's an important distinction," he told CRN. "There are authorised channels, there are independent [channels] and there are a load of others that I would largely group under the term 'illegitimate'.

"There are people out there who give all of us a bad name and one of my jobs is to talk about the reality of the industry and how independence has a leading role to play," he said.

Barnard (pictured) claims that unlike these illegitimate companies, independent distributors such as The Change Organisation are supporters of the authorised channel, although they are unlikely to ever be publicly endorsed by the large vendors.

"We exist very successfully with the authorised channel prospering - we don't threaten it, we don't undermine it; we support the UK ICT resellers."

"We need to be sensitive to the practical, commercial realities of the big players in the market, but within that we need to recognise that we have a place and a space that we fill honourably.

"There is awareness in the larger vendors that the independent sector exists and it really helps when they need to hit numbers at the end of the quarter. This is the reality that we're talking about globally. The sector exists to serve the vendors."

Barnard told CRN that The Change Organisation has seen a rise in sales of late and is now looking to increase its margin.

For the year ending 31 March 2015, it recorded turnover of £32.3m and net profit of £361,000.

In terms of the wider independent sector, Barnard said that firms need to change their "margin-poor" business models if they are to see better financial results.

A number of players are focusing on volume, which is pushing down the market's margins to a zero level on return - and this needs to be changed, he explained.

"We're not in that camp," Barnard said. "We think by being the Savile Row of the independent sector, by offering a great deal of presales and configuration support to our resale customers, we have a prosperous turnover."