ANS breaks £60m revenue barrier

Cloud and services drives 36 per cent sales growth for Manchester-based firm

Cloud and managed service provider ANS saw sales grow 35.7 per cent in its last financial year, taking it to a revenue of over £60m.

For the full year ending 31 March 2017 ANS recorded a revenue of just under £62.7m, while adjusted EBITDA rocketed over 80 per cent to £12.3m.

Speaking to CRN, ANS CEO Paul Shannon said that the growth was driven partly by the integration of Eison, which ANS acquired in 2016, but added that rapid growth in ANS' cloud readiness assessment services was the key driver.

After undergoing a shift from low-margin sales to higher-margin services, ANS now draws 70 per cent of its profit from cloud and services.

"We had a period of really big uptake on cloud readiness assessments," Shannon said. "It's been one of the big stokers of the growth; it's been really amazing.

"We tell them which applications can live in cloud as they are, which ones they need to eradicate and replace with a new application, and the ones that they probably don't want to go anywhere near public cloud for now.

"All of our customers now, instead of doing a straight tech refresh, are including cloud - whether it's a small or large percentage."

The financial year saw ANS become an Amazon Web Services Advanced Partner, as well as a Microsoft Gold Cloud Partner.

Some 30 per cent of ANS' gross profit is still related to traditional hardware sales, but Shannon said that this is all from customers who are buying a degree of cloud and services as well - no customers will solely buy hardware.

"They can't move everything [to the cloud] - the business model won't work and technically it probably won't work - but we will only engage with customers that have an appetite to engage exactly where they are and want us to help them develop a strategy of where they're going," he added.

Alongside the cloud growth, Shannon said that ANS saw a strong year with Cisco, in particular some hefty managed WAN and LAN wins.

"We've been able to sell into our existing customers and take their wide area network renewals from suppliers and take over the management of them, as well as the installation of new ones," he explained.

"Also, we've won a small number of very large managed LAN deals, so traditional on-prem networks. The managed services there is the most important bit for us in terms of profitability, because we've managed to not just transition them to a new network, but also take management of the LAN."

ANS has now entered the third quarter of its current financial year and is already seeing a number of the cloud readiness assessment customers take up full projects with the MSP, at a quicker faster rate than was expected, Shannon explained.

"The transformation of the business has happened more quickly this year than we thought it would," he said. "What we've seen is the sheer volume of readiness assessments be much higher [in H1], which is great, but it does mean that we've done a lot more consultancy this year than anything else.

"Given that the readiness assessments almost always turn into full projects, we're starting to see the fruits of the first six months' labour in Q3.

"We're seeing a much bigger increase in really big transformation projects. In almost of cases it's a combination of public cloud and private cloud solutions."