Managed services drive up SoftwareONE's profits

Licensing giant sees UK operating profit jump 254 per cent

SoftwareONE's UK arm has seen its operating profit jump 254 per cent as its shift to a managed services provider gathers pace, according to UK managing director Zak Virdi.

For the 12 months ending 31 December 2017, SoftwareONE saw its revenue increase 10 per cent year on year to £137m, while operating profit rose from £800,000 to £2.8m.

The results see SoftwareONE continue a period of growth that has seen its turnover increase by over £100m in the last five years.

Virdi (pictured) said that the licensing giant is placing its bets on managed services, citing the launch of its global network of shared services centres as proof.

"We have a very strong play with the two hyper-cloud leaders in AWS and Azure, with Azure being where we have the most traction and revenue dependency," he explained.

"We are seeing a very big focus on the services we provide and we have also worked with a number of ISVs to enable their technology in the cloud, and then wrapping around our 24/7 managed services through our shared services centres."

Despite the focus on managed services, Verdi said that SoftwareONE's traditional licensing business is still growing, and is acting as a pipeline towards further services business.

"We still have huge opportunities in all markets that we operate in, especially in the UK," he said.

"Our offering is very compelling and competitive for companies that want to get a hold of their on-premise environment and get better visibility.

"That is becoming more critical now because they have to really understand their on-premise environment to then go to cloud infrastructure.

"One of the advantages we have, given our background in software, is that we don't have any legacy tie-ins to hardware infrastructure and that has given us a far more agile engagement with customers. We're not trying to protect legacy infrastructures; we want our clients to realise the benefits of the new opportunities available to them."

He added that the continued shift to software-defined solutions gives it scope to expand into new areas, including unified comms and networking.

Virdi also expects changes in Microsoft's Cloud Solution Provider programme to prove fruitful.

Earlier this month Microsoft raised the threshold for suppliers to buy cloud services direct from Microsoft, with firms not meeting the terms now having to buy via an intermediary.

"CSP is going to be the core platform for driving MSP solutions going forward and of course Microsoft is driving more into those platforms to really enable customers," he said.

"We see that as an opportunity because we see parity between what CSP offers as a platform versus classic traditional licensing, which aligns to our MSP strategy.

"It is something I see as having a harmonising effect."