XMA's Hemani: I refuse to get swept up in cloud hype
XMA boss talks Brexit, acquisitions, and how the firm is not a 'framework junkie'
XMA chief Lee Hemani has said he refuses to be caught up in hype around cloud and services, claiming other firms have got carried away and have "caught a cold" doing it.
Speaking to CRN, Hemani (pictured) acknowledged the importance of cloud and services technology, and said XMA is investing in them. But he said he will not make "sweeping statements" about cloud at the detriment of its traditional business.
"We want to protect what we have and not leak it on a crusade to be the biggest cloud mover or the biggest services mover," he told CRN.
"We're incredibly careful to make sure we don't throw the baby out with the bath water. We have traditional supply-chain business and we want to preserve that. [We're not] trying to make an about-turn and saying suddenly 'we're going to be a services-driven business with a cloud-based proposition and you're only going to get paid on those things and nothing else' - you're going to catch a cold doing that.
"It's not a slower pace [at which we are moving], but the point I am trying to get across is that we are investing in areas that we see technology moving in. Yes, the market is moving to cloud, things like Azure are important propositions, and we're making investments and we're driving business forward. When there's an opportunity to drive and invest in that business, we're absolutely doing that where we see it lends itself to XMA's market and future market.
"I have very key relationships with vendors - HP is one of them, Apple is another. Like it or not, they want units sold."
"I am not keen on making sweeping statements saying 'we are suddenly going to be the biggest cloud provider in the country in three years' time'. Frankly speaking, I'm a big player in the UK marketplace, I've got a good market cap and it's growing at a steady rate - net of Brexit, net of how hard the bloody market is. It was hard yesterday, it's hard today, it's hard tomorrow - stop whinging. It is what it is and we've got to get on with it.
"I've got relative scale now in my organisation to move myself in the right direction. Barring an absolutely huge catastrophe in the business, I'm in good shape. I enjoy the shape that I am in and I want to continue to cultivate it.
"I want to continue to add to it and what I won't be drawn into - whether it's the market or by perception - is making sweeping statements about a sudden blast of cloud or a blast of services. All too many times, you see businesses make those statements and then catch a cold. Because they forget that they've got to cultivate their customers and manage their outcomes, and you know what? People still want on-prem stuff. I'm going to be right there supporting my clients' needs in all areas.
"And also I have very key relationships with vendors - HP is one of them, Apple is another - we're very close and we enjoy a very fruitful relationship with both. Like it or not, they want units sold. We want to sell units and we want to put a service and value wrap around that, and we want to be close to our customers."
Revenue rising
Hemani said he and the board are working on the numbers for this year, but he won't disclose them publicly yet because staff have not been updated. But he did say he hopes to exit 2016 with turnover "north of £350m", and is aiming to achieve double-digit growth next year.
In the 12 months ending 31 December 2015, XMA smashed the £300m barrier, posting revenues of £305.8m, up 37.5 per cent from the year before. Profits over the same period rocketed 52 per cent to £5m.
Hemani said the firm's enterprise and services business has room for improvement in the coming months.
"We're very good in client and client value; we're very good in print and print technology," he said. "We have room for improvement in enterprise and services, absolutely we do. In terms of where they align to the other two disciplines, I would like them to be competing a little better than they are today. They're not bad, they're good, but in our ambitions, they could be better. That's an area where we see some very interesting growth next year."
XMA is no stranger to acquisitions - most notably snapping up Viglen in 2014. Hemani said to expect further activity in this space early next year. He said some deals could "sharpen the mind of the market" when it comes to what XMA is about.
"We're not framework junkies, even though it might appear so."
"Enterprise and service is an interesting area for us to take a closer look at," he said. "We have an organic growth target, which includes investment in resource net of acquisition - that includes development in headcount and capital investment, and all that wonderful stuff. We also have an acquisition strategy that aligns to the key parts of our disciplines we want to improve. We're looking at two, three, four organisations in the marketplace which could be good suitors for the business. However, we've got to be clear and grounded. It is easy to get carried away by the allure of acquisition. The danger is, you put a lot of resource into that activity and it doesn't happen. Then you suddenly find a lot of exec resource has been spent on a fruitless quest and they've forgotten their day job. We have a day job and it's driving the business.
"As and when - or if - an acquisition appears, fabulous. I'd like to think there would be something happening in the first half of next year. Actually, I think they would be great news stories because it would change the dynamics of the business and it would sharpen the mind of the market about what XMA are and what we're looking to achieve. I'm moving into the new year with optimism about what our organic growth looks like and our acquisition aligns to that."
"I'm pretty p*ssed off about Brexit"
Hemani told CRN that he voted for the UK to remain in the UK, and admitted profitability has taken something of a hit since the vote. But he remains optimistic.
"I voted remain. I was a remainer. Call it a protest vote, call it what you like, it's here, it's not going away. It's covering a lot of newspapers - it seems to be what I read out of my fish and chip wrappers every Friday. You've got to suck it up. I'm pretty pissed off about it, if the truth be told. But you've got to suck it up. You might not like it, but that's the market we find ourselves in now. In the first few months there's been no real impact.
"XMA's revenues have grown quite nicely, and in line with budget expectations. Profitability towards the tail-end of the year is getting impressed, you could say by Brexit, if you like. We dabble somewhat in the government marketplace and contract renegotiation within a government environment can prove tricky. We do the dance. They do the dance. I've got to stay pragmatic. I can't stamp my feet and bang my fists on the table. There's a steady queue of people behind me doing that. What difference does it make?"
XMA regularly pops up on big government frameworks, including recently on Technology Products 2. Hemani told CRN that the public sector business remains important.
"It has always been a core focus of ours, it will remain so," he said. "I wouldn't say it's increasing. We've always been laser focused. Those frameworks are pay to play. You need to invest to get into them and to get an opportunity and to win market share. We're not framework junkies, even though it might appear so.
"We know the frameworks we're in and we have a lot of focus on the government marketplace and the education space. We have our teams behind them. It is harder and harder to do business in government but that's good if you're us and you're an existing member and you know how to evolve. We know how to evolve - even at our size, we're incredibly nimble. It's a pain if you're net new and you're trying to get into the government mix. You've got to work that little bit harder."