Meet the UK's top 35 comms resellers

clock
Meet the UK's top 35 comms resellers

CRN's inaugural Comms Reseller Report ranks the 35 largest specialist comms VARs on CRN's radar by revenue and examines the trends affecting their businesses

The UK's top 35 comms resellers raked in collective revenues of £2.01bn last year.

That's according to CRN's inaugural Comms Reseller Report, which ranks the 35 largest specialist comms VARs on CRN's radar by revenue and examines the trends affecting their businesses.

Collectively, they banked operating profits of £39.3m on revenues that rose 11.6 per cent to £2.01bn in their most recent financial years on record, and saw headcount rise by over 1,000 year on year to nearly 10,500 staff.

The full report, which profiles each of the 35 leading outfits (see bottom for a snippet) is available here to subscribers of CRN's market intelligence service, CRN Essential.

Here we round up six key takeaways from the report.

1. The comms channel is on a journey of reinvention

Comms VARs have spent recent years transforming themselves from mobile or PBX resellers into end-to-end comms, cloud and IT services providers. This journey is best summed up by market giant Daisy, which - through a string of acquisitions including Phoenix IT and Alternative Networks - has moved rapidly beyond its roots as an SMB telecoms provider to become a £700m comms, cloud and IT services powerhouse. But the pattern is being repeated across the market, including at Elite Group, Olive, Charterhouse, G3 Comms, Solar and Excalibur.

2. Those who can't make the change are selling up

Not all resellers in the comms space have been willing - or able - to make the increased levels of investment needed to remain relevant in the market.

Rob Sims

This has led many owners to give up the ghost, and sell up to a more ambitious competitor. More legacy players will come to this conclusion in the coming years as the convergence trend accelerates, which will continue to drive feverish M&A activity in the sector.

"Everyone has had to take a hard look at what they do as a business, and some have said ‘actually, I don't want to go through the pain of evolving into a multi-service solution provider," Rob Sims, director of Elite Group (pictured), says in the report.

3. Top 35's revenue growth is an illusion

The top 35 comms resellers grew their collective revenue 11.6 per cent to £2.01bn in their last financial years on record. Although that sounds pretty impressive, most - if not all - of that growth can be attributed to consolidation, with an M&A frenzy artificially boosting the top lines of about half of the companies in this report.

4. Comms resellers are losing their margin advantage

Margins associated with traditional comms products are higher than in IT, due to the lower cost of service involved, but this advantage is eroding as the convergence trend hits home. At 3.9 per cent, operating profit margins are now in line with the wider Top 250 UK IT resellers. Although comms resellers are having to broaden their offerings, this is sometimes having a negative impact on their bottom lines.

5. Avaya's woes have taken their toll

Many of the 35 providers in this report count Avaya as their largest technology partner. Although Avaya insists its Chapter 11 bankruptcy was about restructuring its balance sheet, rather than an issue of solvency, its partners felt considerable pain as a result of its financial woes.

John Whitty

Some reported a slowdown in new Avaya business last year, with others complaining that it affected their margins. The vendor has a lot of work to do to win back channel hearts and minds in 2018.

"I think there was a lot of concern around further investing in Avaya systems, and certainly we never saw many new sales during the period they were in administration," John Whitty (pictured), CEO of Solar, says in the report.

6. Pockets of growth are emerging

The comms market may be flat, but the rise of new technologies and delivery models is providing pockets of growth for resellers. Unified-communications-as-a-service is one obvious hotspot, with SD-WAN also gathering pace.

Russell Sheldon

In the contact centre space, virtual assistants are currently setting the market alight.

"We are seeing significant uptake and interest from our clients looking at how they can embed virtual assistants into the customer journey," Russell Sheldon (pictured), chief commercial officer at Sabio, says in the report. "Not only in terms of efficiency gains - which is often how it's looked at - but, equally, in terms of speed of response and being able to help consumers in a more effective way."

Comms report snip

More on Management

UK cloud firm Civo moving to four-day working week

UK cloud firm Civo moving to four-day working week

It comes after they trialled the move late last year

clock 22 April 2022 • 3 min read
Ampito eyes £250m revenue goal under new CEO Angela Whitty

Ampito eyes £250m revenue goal under new CEO Angela Whitty

Having called time on her seven-year stint running Cisco’s UK&I channel, Whitty has been tasked with growing Ampito into a £250m-revenue outfit

Doug Woodburn
clock 06 January 2022 • 2 min read
Exclusive: Three top execs including Mark Banfield suddenly depart LogicMonitor

Exclusive: Three top execs including Mark Banfield suddenly depart LogicMonitor

CRO Mark Banfield, EMEA VP Daniela Streng and CFO Ziad Fanous are all departing the vendor

Josh Budd
clock 28 July 2021 • 1 min read

Highlights

Staff & Salaries 2022

Staff & Salaries 2022

A snapshot of pay and headcount trends in the UK channel

Doug Woodburn
clock 09 March 2022 • 1 min read
Midwich CEO on Nimans acquisition, 2021 results and return to pre-pandemic levels

Midwich CEO on Nimans acquisition, 2021 results and return to pre-pandemic levels

Stephen Fenby talks to CRN after Midwich’s 2021 results in which profitability exceeded pre-pandemic levels

Josh Budd
clock 08 March 2022 • 3 min read
4 more vendors suspend sales in Russia following Ukraine invasion

4 more vendors suspend sales in Russia following Ukraine invasion

IBM and Microsoft are among a number of vendors which have also announced that they will halt sales in Russia following the invasion of Ukraine.

Dan Bennett
clock 08 March 2022 • 3 min read