Exclusive Networks logged another "record" year of growth for its full-year 2019, with annual revenues up 17 per cent to €2.4bn (£2.1bn) and all its regions enjoying double-digit growth.
The last time Exclusive shared its financial results was in 2018, when it reported annual 2017 revenues of €1.75bn - a 38 per cent jump year on year.
CRN's sister publication Channel Partner Insight spoke with Andy Travers, the distributor's EVP of worldwide sales and Barrie Desmond, SVP of marketing, to get the lowdown on the distie's results
1. 'Development' vendors are outpacing the top three
One of their key takeaways is that Exclusive's business from newer vendors in its portfolio, which the distributor calls "development" vendors, is larger than ever. "Development" vendors including Proofpoint, Rubrik, SentinelOne, Infoblox, Nutanix and Gigamon collectively grew revenues at almost 40 per cent year on year.
But the lion's share of the French firm's revenue is still made through its top three vendors: Fortinet, Juniper and Palo Alto. Their revenues grew at 20 per cent year on year.
"Our top vendors still exceeded our expectations for 2019. But the larger growth came from our newer vendors, quite significantly so," Travers said.
The 17 per cent growth seen in 2019 is significantly lower than Exclusive's 38 per cent growth in 2017. But Desmond shrugged off any notion that the security VAD's approach to the market has changed.
"Our key vendors in the sectors in which they play are still seeing above-average market growth - over 20 per cent per annum. And that momentum continues. With the balanced portfolio, across our development vendors where we get in north of 40 per cent growth, we still have extraordinary growth across the board," he said.
2. Cloud business slightly outgrowing cybersecurity business
Split between the two segments, the distributor's cloud transformation portfolio marginally outperformed the larger cybersecurity segment, growing by 19 per cent year on year.
"But there was probably only one or two per cent between them," Travers said.
"I would say the big winners for us were application security and email security, which grew very, very well for us. End-point also grew well for us, and we had phenomenal anti-virus growth through the course of the year.
"We also saw growth in backup and hyper-convergence on the cloud transformation side. Some of our emerging vendors got traction really quickly, in terms of CASBs (cloud access security brokers) and cloud containers."
3. Southern Europe was the fastest-growing European region
The distributor logged organic growth across all its regions: the Middle East (44 per cent), Southern Europe (20 per cent), Pacific (18 per cent), DACH (17 per cent) and UK&I (16 per cent).
In Europe, Iberia was the fastest-growing market.
"We were really pleased with the performance of Iberia that drove the 20 per cent growth in southern Europe," Travers said.
"Iberia had a very, very positive year. France, too, and then Turkey also enjoyed a lot of growth".
4. Exclusive hails successful launch of MSSD
Across every region, Barrie Desmond welcomed a growing proportion of subscription-based revenues.
He said that the distributor sees this as crucial to keep up with managed security services.
"Whether we like it or not, security is still rather complicated and is a complex business and we still as an industry have not managed to fill that skills gap. That's where we're seeing an end-user demand saying, ‘Come on, guys, we need some help here for you to manage our security infrastructure'. More of our resellers and systems integrators have already got that capability, but they also need to evolve to a recurring annuity-based business model to provide these managed services."
This prompted the distributor to launch its MSSD (managed security services distributor) business, which Desmond said helped drive a double-digit increase in services revenues during 2019.
"The MSSD business is designed to help with that knowledge transfer and help the channel evolve their business model towards becoming more of an MSP," he said.
And with the COVID-19 crisis driving more end users to seek help from partners to manage their infrastructure estate and security, the distributor anticipates further growth in services through its FY2020.
"We definitely see that component of our business, our managed services, grow as a part of our business at quite a fast rate," he said.
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