Spanish CRM consultancy RedK targets UK market

RedK recently acquired UK SugarCRM MSP The Sugar Refinery

Spanish CRM service provider RedK has set its sights on the UK market after acquiring The Sugar Refinery.

Founded in Spain in 2005, RedK is a CRM consultant, focusing predominately on delivering services around SugarCRM's solutions, and until the recent acquisition, only had a limited footprint in the UK.

Hideki Hashimura, CMO at RedK, explained that the firm chose to acquire an existing UK-based SugarCRM MSP, instead of expand its own UK team, so it could quickly address a gap in the market.

"We started looking into the UK market as an opportunity to grow because it makes sense," he said.

"A lot of our staff are bilingual - they speak Spanish and English and there's no other market in Europe where we could leverage that specific skill.

"The other thing is that SugarCRM's main market in Europe is the UK and Sugar right now needs more partners that are well positioned in the high end of the mid-market to deliver what [business] they have been winning."

RedK currently has a turnover of just under £4m - with The Sugar Refinery turning over just under £1m - and Hashimura says the new combined entity has set itself a target of hitting £7m next year.

Because The Sugar Refinery has traditionally only worked with SugarCRM technology, its name will be faded out to bring it in line with RedK's ethos.

While RedK actively champions SugarCRM as its vendor of choice, the firm also offers services around IBM Marketing Cloud and Zendesk.

"We are seeing so many players popping up in the CRM space but we have decided to really stick with SugarCRM as our choice," Hashimura said.

"We sometimes deliver projects on other technologies because the client might come to us and say 'we cannot implement a new technology but we need the extra services', but when we can choose, we go for SugarCRM because we believe it's a versatile technology, it adapts very well to business needs and it's got a very strong position in terms of pricing.

"We've encountered customers using other technologies where the entry point is quite accessible but as businesses grow they become unsustainable.

"Many technologies become extremely expensive when the customer starts to grow and one thing that we really like about Sugar is the fact that the total cost of ownership can be planned many years ahead and we're able to know exactly what we're going to have to pay for a project on a three to four-year period, which is almost impossible with other technologies."

Tony Lock, analyst at Freeform Dynamics, explained that the SugarCRM offering is compelling to the channel because of the service opportunities it creates.

"You've got three or four gorillas in the space that sell to large enterprises - Salesforce, SAP and so on," he said.

"SugarCRM tends to sell maybe to slightly smaller organisations but the big difference it has from companies such as Salesforce is that as well as offering you a cloud solution, it also offers the ability to run it on your own systems.

"That is attractive for organisations that want to run things in-house, but also for MSPs who might want to build their own CRM solution, sell it on and host it in their own premises to a range of customers - as well as potentially reselling the Sugar cloud solution."

Brexit defiance

While Brexit has led to financial uncertainty in the UK, Hashimura defended the UK's economy, and said that an increasingly divided Europe means it make sense to have business interests in more than one country.

"Ten years ago the EU looked like it was going to become one single, strong economic power but as time goes by we're seeing that the market is quite segregated and quite granular," he said.

"Economies are trying to be less interdependent and become more independent, so it makes sense for us to diversify the potential for growth in different markets, but also diversify the risk.

"[Britain] is also where services are best valued by customers in terms of strategic thinking and high-performance delivery. These are things that UK companies are willing to pay for and understand that there is a premium [compared with] Italy, Greece, Portugal or Poland [for example] where companies have not evolved to value those types of services yet."