Brits abroad: Which UK resellers generate the most overseas sales?

Amid the fanfare that has accompanied the UK growth of WWT, CDW, SHI, NTT and SoftwareONE over the last decade, it would be easy to overlook an opposing - but equally compelling - storyline in the UK channel.

This overseas quintet have come from nowhere to rank among the UK's largest VARs in the space of ten years.

But what has perhaps received less coverage is the commensurate globe-trotting exploits of their UK-headquartered counterparts.

Proving that the DNA of UK technology solution providers also travels well, exclusive CRN research reveals that UK-headquartered resellers generated over £6.2bn of overseas revenues in their last financial years on record.

Although Computacenter and SCC contributed roughly four fifths of that total, some 121 of the UK-headquartered firms featured in the CRN VAR 350 divulged an international sales figure in their latest accounts.

With recourse to interviews with some of the more ambitious firms within that cohort, CRN Essential's Brits Abroad report examines the size and scope of the international sales opportunity facing the UK channel.

Which UK-headquartered tech solution providers generate the most overseas sales? How might Brexit and COVID impact the challenges and opportunities that come with operating an international tech solutions business? And what are the top tips for building an overseas business if you are an ambitious UK reseller or MSP?

CRN Essential subscribers can view the full report here.

Two-way traffic

CRN's Top VARs has an increasingly international flavour to it, with 25 internationally headquartered firms - including 11 based in the US alone - featuring in our hot 100 in its 2019 edition.

Although the likes of Insight and Logicalis have been a fixture at the peak of the UK channel for decades, more recent overseas entrants such as CDW, NTT, SHI, WWT and SoftwareONE - a quintet who now generate combined UK revenues of £2.4bn - speak to the increasing requirement for the world's largest VARs to have a UK foothold.

But the data in our Brits Abroad report underlines a similar desire among UK-headquartered VARs to play these international VARs at their own game.

UK-headquartered outfits featured in CRN VAR 350 (published in January 2020) generated international sales of at least £6.24bn in their most recent annual accounts (as of the time it was researched last November/December).*

Overseas order

Who are the most successful UK-based VARs when it comes to international sales, and what has underpinned their success?

Leading the way is the UK's largest VR, Computacenter, which generated a record 69 per cent of its £5.053bn group revenues from overseas last year on the back of its acquisition of US counterpart FusionStorm the previous year.

Computacenter has stepped up its international expansion drive in the last two years, making big acquisitions in the US, Switzerland and the Netherlands.

But the firm's motivations for international growth - namely to boost its coverage for existing customers and hunt major new global customers wherever they are headquartered - have remained consistent since the 1990s, CEO Mike Norris told CRN.

"We do big customers, and a lot of big customers have global requirements. So one of the reasons for expansion is coverage for the customer," he said.

"We used to do the US, for example, through a partner, and then in 2016 I stepped in and started the US business. And predominantly to start with it was just to look after our Europe clients in the US. More recently we've expanded out into winning US clients. That's pretty much how we've operated for 25 years - do it for one customer and then try to sell it to many.

"And the second reason is scale. I want to sell in the places where there are big customers, and I want to leverage my skills, intellectual property and tools I've developed across the widest possible customer base."

Ranked 16th in our league table, Viadex provides IT infrastructure to globally distributed businesses headquartered in either the UK or the US. Boasting operations in four continents, it generated £19m of its £32m revenue from overseas in its fiscal 2019.

"In summary, our model is very specifically aimed at a part of the market that is under-addressed by the big [outsourcing] guys because [the client] is too small, and most resellers are built as national players not global players, so they don't have the skills to do it properly," its CEO Dino Cooper (pictured) told CRN.

Viadex also operates a Global Partner Services arm that provides white-glove deployment services to global SIs and resellers, working with distributor Ingram to fill in any gaps in the distributor's global coverage, Cooper (pictured) added.

UK-based tech solution providers enjoy a natural advantage over at least their mainland European and Asian counterparts in that they count the international language of business as their mother tongue.

But their progressive attitude towards technology has also counted in their favour, according to Iain Tomkinson, sales director of ASM, a Cheshire-based distributor with operations in the UK, France and Germany.

"With Computacenter in particular, and I think probably other British resellers, they are more open to new ideas and change," he said.

"It's not just ‘we're going to sell Microsoft, we're going to sell Cisco we're going to sell VMware'. I do think that the larger British companies are more open to looking at tier-two and -three technologies."

Alastair Bell, founder of Bell Integration - an infrastructure reseller that generated £63m of its £149m 2019 revenues from overseas that ranks eighth in our league table - agreed that the unique DNA of British firms has helped Bell expand beyond Europe and into the USA and Asia Pac over the last decade.

Having opened a Singapore office in 2019, Bell earlier this year launched an outpost in Krakow to provide additional capacity for its procurement management solution.

"'A company from here, doing rather well over there' - as a marketing quote from the Hanson Group UK PLC circa 1970s, it sums up the ability of British companies to trade successfully against local companies in other geographies," Bell told CRN.

Looking to the future

In early June, Dutch and British audio visual integrators Kinly and AVMI completed what is arguably 2020's biggest channel deal so far with a virtual fist bump over video conference (below).

The inability of the two executive teams to physically meet up exemplifies the challenge multi-national tech providers have faced in 2020 during lockdown.

Norris conceded that the constraints on international travel had reduced collaboration and resulted in countries acting "a little more independently and a little less as a group".

But COVID-19 has only impacted Computacenter operationally, rather than strategically, he maintained.

Cooper at Viadex, meanwhile, said COVID has forced him to approach further international expansion with "a bit more caution".

"We've heat mapped our existing clients across both sides of the business, and there are 21 [more] countries that we are consistently performing operations in," he said. "We could be in them in a heartbeat and it would develop further business for us. But at this time, we have a fairly good formula in terms of how much business we should be doing in a country or region and what the cost of setting up and entity and running it. And those two things have to balance."

Despite COVID, Norris predicted that Computacenter will continue to expand overseas.

"I imagine the UK element of our business will continue to reduce as a percentage, because the world is a bigger place outside of the UK than inside it," he said.

"We will go into more countries and we'll expand in certain geographies, probably through acquisition, as well as organically. In the next few years, I think we're more likely to buy outside of the UK than inside of the UK."

Computacenter's overseas sales boomed from £2.74bn to £3.47bn last year, with the addition of FusionStorm helping to swell US revenues from £273m to £773m.

"It's clear we are not as big as we would like to be in the US," Norris added, when questioned about specific territories ripe for further expansion.

The overseas exploits of UK-headquartered tech solution providers have often flown under the radar, Norris said, in conclusion.

"There are lots of US and Japanese organisations in the UK, but you've also got UK companies pushing out into the rest of the world," he said.

"I don't want to wear Union Jack underpants and be all kind of ‘Britain's best', but our IT industry needs any help it can get.

"I don't think we support UK tech - not necessarily resellers per sae - but pure tech. [Techmarketview founder] Richard Holway was talking the other day about how ARM is one of the best companies produced - it's probably the best UK company in the last 50 years - and they sold it to the Japanese and now the Japanese are going to sell it to some Americans [Holway was responding to rumours that ARM could be acquired by NVIDIA].

"I'm not for government intervention on many things. But when you've got a company that potentially is the biggest chip manufacturer in the world - it could be better than Intel. And you let foreign buyers have it. And it's exactly the kind of high-end jobs that we should be looking after. I just think any support for British tech for a positive thing."

The full report, which includes breakdowns of the international sales of 121 UK-headquartered resellers and MSPs, can be accessed by CRN Essential subscribers here.

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• Reseller
• CDW
• NTT
• Computacenter
• SCC
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