How to pick the best wildcard vendors
Exclusive CEO Olivier Breittmayer and COO Barrie Desmond tell CRN how they go about picking the right new vendor in a market crowded with start-ups
At a time when picking the next big vendor is akin to entering the lottery, VAD Exclusive Group has developed an uncanny knack for buying the winning ticket.
In its security arm Exclusive Networks, the distributor brought the likes of Palo Alto Networks and Fortinet to the UK, while its datacentre distributor BigTec currently carries storage superstars Nutanix and Rubrik.
Exclusive Group recently recorded its best-ever half year after revenue jumped nearly 20 per cent to more than ￡650m. This growth was attributed to the "core vendors" that Exclusive has taken from being market entrants to dominant players.
Where other vendors have entered the UK market and fallen away, Exclusive has made many of its selections stick. Choosing the right vendors is obviously key, but Exclusive CEO Olivier Breittmayer attributed the distributor's track record to a unique makeup of employees.
"The big difference between Exclusive and the more generic distributor is the number of technical people we have on board," he said.
"Thirty per cent of the team are engineers or technical support and that's a big part. We have one sales guy for one technical guy and most of the time it's the technical guy who convinces the reseller to engage with new technology."
However, as these once-emerging vendors take a stronger position in the market, Exclusive, by default, becomes a distributor that works increasingly with the established players.
In a further push into the mainstream, Exclusive took an unprecedented step to distribute an incumbent vendor earlier this year by signing up Symantec in the UK. The addition of the security giant does not however represent a shift in strategy - with Exclusive focusing primarily on "three or four" new technologies that Symantec is bringing to market - making the deal not too dissimilar to Exclusive's other vendor relationships.
"Our model remains the same: to have a tailor-made approach for each vendor," Breittmayer said.
"For sure what we do with Symantec will be a bit different to what we do for a new technology, but we adapt everything we do for each vendor to make sure that we are aligning for the vendor.
"That's very important. We have to be aligned with the vendor and their strategy. We don't want to have one model, we have one model per vendor."
How to pick the best wildcard vendors
Exclusive CEO Olivier Breittmayer and COO Barrie Desmond tell CRN how they go about picking the right new vendor in a market crowded with start-ups
Emerging, growth, and core
While the work with larger vendors is paying dividends, Exclusive remains true to its roots and continues to bring emerging vendors to market.
As such, it splits its vendors into three categories - emerging, growth, and core.
"A great observation I would make is the balance that we have," said Exclusive COO Barrie Desmond.
"High growth would be the likes of Nutanix, but we've been working with some new and exciting technology at the next-generation end-point such as SentinelOne. We've done all the footwork in the last quarter and that is really starting to gain momentum now.
"I look at Exabeam where there is an interest in behavioural analytics and a new type of technology in the network beginning to gain a foothold. These are some of the newer vendors we've begun to work with and there is an amazing opportunity for the channel because of the number of vendors and tools you need now."
Desmond said that while these vendors offer vast opportunities for the channel, it is these areas that require the most work and investment from Exclusive to create a market and drive business.
Exclusive, he explains, provides a "triage service" by putting the vendors through a rigorous due-diligence process.
"We're good at offering a triage service for the channel to look at these vendors, go through a tried-and-tested due diligence process and bring out the ones that we think address a growing market and that we think can be disruptive," he said.
"When you look at people such as Exabeam - where we're talking artificial intelligence, behavioural analytics, machine-to-machine learning - you have to begin to make the market and that's where you get the scars. That's where it takes investment. Hopefully the service we provide acts as that triage and is a proxy for the channel, whether you're a global SI or a regional reseller."
While this process can be painful for Exclusive, the outcome can be incredibly fruitful for both the distributor and the channel. The realisation that a new technology is needed to provide more comprehensive protection means that channel partners have an opportunity to change the service they provide to customers - focusing more on managing a portfolio of products, rather than just selling products.
"There's an amazing opportunity for the channel because of the amount of vendors and so-called security tools you need in the infrastructure now," Desmond explained.
"It's becoming very complex and very heavy duty to manage, and with the lack of security skill sets it's a huge opportunity for the channel to work with their customers and almost become a portfolio manager. They can give them a level of managed services, consultancy - really value-based high-margin revenue stream which keeps that complexity out [for the customer]."
How to pick the best wildcard vendors
Exclusive CEO Olivier Breittmayer and COO Barrie Desmond tell CRN how they go about picking the right new vendor in a market crowded with start-ups
Vendors diversifying
Picking the right emerging vendor is key, but often an existing vendor diversifying into a new space can bring that new technology into the portfolio without having to seek an entirely new relationship.
In particular for Exclusive, the likes of Palo Alto Networks and Fortinet have broadened their horizons which has helped drive Exclusive's own growth over the course of this year.
"If you look at the way the market is growing in some of the key sectors that we're in - the next-generation firewall [and] security infrastructure - it's a big market and they grow single digit at the top of the range," Desmond said. "The vendors we're aligned to outpace that three, four, five times, which means that we're grabbing the growth but also market share.
"For instance, Palo Alto has begun to make great inroads into the next-generation end-point market [and] Fortinet continues to develop and expand its fabric to protect other elements of the security infrastructure.
"[So] as well as the core vendors taking market share from their peers, we're also beginning to open up bigger addressable markets for these vendors which in many respects is a great opportunity for the channel. Very often you just have the one technology play, but as they expand… it begins to open up the addressable market."
The opportunities might be coming thick and fast, but they are also becoming harder to spot. Cybersecurity start-ups are coming out of Silicon Valley and Israel at an unprecedented rate, all packing vast VC capital and promising the world through marketing campaigns. Even a distributor with Exclusive's track record is finding it increasingly difficult to find the needle in the haystack.
"It is harder," Desmond said. "I think last year there were 400 technology start-ups coming out of Silicon Valley, Germany and Israel and they all have this huge amount of capital swashing around for people to use and take their ideas to market with. They all have incredibly talented management teams and loads of experience, so which one do you pick?
"We continually beat ourselves up here, but we haven't missed much. I don't think we've missed anything, to be honest."