'I've never seen the industry move so fast' - reseller bosses come together to discuss change and innovation

14 top reseller bosses come together at CRN A-list dinner to discuss where they are placing their bets for the year ahead

Fourteen top UK reseller and MSP executives came together last night to share how they are updating their businesses in the face of growing margin pressure and accelerating industry change.

You can view the pictures from the night, which was in association with A-list sponsors Agilitas, here. The full line up of guests is dispalyed at the bottom of this article.

While some opened up how they are investing in new areas such as chatbots, AI and IoT, and embracing recurring revenues, others stressed the importance of retaining continuity when it comes to their traditional resell businesses.

According to this year's Top VARs report, the UK's top 100 resellers saw average (mean) net profit margins shrink from 2.9 per cent to 1.8 per cent in their latest financial years on record - the second annual fall in their bottom lines.

Savage competition, Brexit and the rise of cloud were variously blamed.

Our inaugural A-list dinner - which is loosely based around our A-list - focused on how resellers are upgrading their business models at a time when their traditional business is being squeezed.

Emma de Sousa, UK managing director at global reseller Insight, used the occasion to reveal that Insight is to launch a new UK practice focused on cutting-edge technology solutions such as IoT and AI in January.

"One of the most significant areas of investment for us has been in our managed services organisations, and we continue to invest in that as we approach 2019," she said.

"We also made some really exciting acquisitions in North America and AsiaPac in the realm of digital innovation and are doing some of the really cool, innovative solutions for clients - IoT, AI [etc] - and we have just invested locally in EMEA to build our own practice that goes live in January next year. It's evolution, but acknowledging that clients need something very different from us today."

Gareth Meyer, director of sales operations at £100m-revenue reseller and MSP Ultima, declared that he had "never seen the industry move so fast" as in the last 18 months as he revealed that the pace of change at Ultima's is also quickening.

"We're scaling down our transactional organisation and we're focusing on what we can do end-to-end, and managed services and professional services is growing," he said.

Andy Barrow, CTO of ANS, opened up on the Manchester-based cloud provider's decision to turn its back on the majority of its hardware sales, which was previously 45 per cent of its business. At the same time, ANS built a new department focused on how to monetise new markets such as IoT, AI and data platforms, which he admitted had presented cultural challenges.

"It was a tough 18 months taking hardware from 45 down to 10 per cent of the P&L and going into that J-curve where you're building services," he said.

We had to recruit some brilliant people on a lot of money and we had to sit and wait for 12 months while it was monetised. The staff challenges were probably the hardest thing, as we had brilliant sales people, engineers and support staff working for us that had been loyal and dedicated, and didn't ask the world when it came to money. They look at the new team you've built and all the innovative stuff and ask why they aren't building bots and AI - ‘I've been here ten years'."

Ben Boswell, regional director at WWT, said the global Cisco partner has carved out a focus on helping accelerate the technology evaluation process for clients.

"We fundamentally believe that companies spend far too much time evaluating technology, and we've spent an awful lot of time investing in a lab ecosystem that is designed to support interoperability testing across platforms," he said.

Mike Danson, CEO of Cisco Gold partner Natilik, which has grown from 28 to 200 staff since its MBO eight years ago, said his firm has been investing in AI and chatbots to drive productivity within his firm.

Bechtle's UK MD, James Napp, said his firm had "grown far beyond" its ecommerce roots in recent years, and is now working more with channel services firms to deliver a full range of services and compete in a wider range of opportunities.

Justin Harling, CEO of CAE, said the £100m-revenue reseller has been grappling with transitioning to a more services-focused business while undergoing "massive growth".

"Frankly, I think everything is changing - how we sell IT, the people we're using to do it, and the systems within the business," he said.

Some of the larger players in the room who resell at scale emphasised the importance of not disrupting their traditional business as they dabble in new areas, however.

Andy Wright, commercial director at XMA, said: "We're investing in all sorts of areas, but what we're very careful of is not losing what we've been good at in the past; even down to our toner business, which is a big part of our business - and I'd highly recommend it because the margins in that are amazing still and the risk is pretty low as you don't get many returns from toner."

Richard Wyn Griffith, solutions sales director at Softcat, said as a publicly listed firm Softcat has to be risk-averse, with the strategy remaining to increase its customer base and sell more technology to existing ones.

"With the scale we have, the innovation and pivoting thing doesn't really play for us. We're proud of being a reseller; it's a good business for us and there's good margin in it," he said. "We have a really simple strategy of selling more to new and existing customers. The two innovation things we've done to drive that strategy this year has been launching in Ireland, which is a big step for us, and looking to evolve our offering with different business lines that we feel are close enough to our core business that we can monetise with it being too much of a departure."

Andy Dunne, availability services director at Daisy, said he is in a similar position.

"We were trying to blue-sky everything and had lots of investments in AI and machine learning, and that's fantastic," he said. "But we've chosen not to enter that arena as when we checked with our customers they were saying that digital and AI is omni-present, but they don't know where it's going to go yet and the three or four things before digital transformation were the normal business priorities. So we've regrouped and refocused on that."

Full A-list dinner line-up

Andy Barrow, CTO, ANS

Ben Boswell, regional director, WWT

Mike Danson, CEO, Natilik

Emma de Sousa, UK MD, Insight

Andy Dunne, availability services director, Daisy

Carl Henriksen, CEO, OryxAlign

Simone Hindmarch-Bye, CEO, Commercial

Gareth Mayer, director of sales operations, Ultima

Dan, Scarfe, UK founder, NewSignature

Andrew Wright, commercial director, XMA

Richard Wyn Griffith, solutions sales director, Softcat