The triple whammy of Brexit, Covid and component shortages has put IT distribution in the spotlight over the last 15 months.
Both figuratively and literally, the stock of the channel's middle tier has arguably never been higher, with publicly listed distributors around the world outperforming Amazon and Google since the start of the pandemic.
Distributors may be facing renewed questions about their role in the ecosystem, but research by CRN confirms the enduring buoyancy of the sector.
The top 40 UK IT distributors on our radar* generated collective revenues of £12.9bn in their most recent financial years on record, up 7.6 per cent year on year.
All are eager that distribution throws off its traditional reputation of being just 'a van and a bank', and recasts itself as the hub of a modern IT channel dominated by cloud, peer-to-peer partnerships and marketplaces.
In this second instalment, we count down those ranked 25th to 11th, outlining their areas of focus and catching up with their MDs along the way. Check out those ranked 40th to 26th here, and the top 10 here.
"We recently committed to becoming the first carbon-neutral IT distributor"
UK revenues: £35.1m (+2%)
UK headcount: 10
Specialism: Digital workspace, security, networking, cloud
Key UK vendors: Citrix, Check Point, Lakeside, IGEL, Ordr
UK HQ: Camberley, Surrey
Largest warehouse? 6000sq feet - Dublin
Founded in 1991, this Irish VAD now generates just over half of its £66m revenues from the UK after launching an operation here in 2016.
Counting Citrix as its largest UK vendor, Dublin-based Data Solutions' UK revenues rose two per cent to £35.1m in the year to 31 March 2021 after more than doubling the previous year, according to figures it shared with us. In April, it claimed it had achieved carbon-neutrality and launched a major campaign around sustainability under the Techies Go Green banner.
Quickfire Q&A with group managing director Michael O'Hara
Which emerging vendors is your UK operation betting big on this year?
Security technology is evolving rapidly in response to modern IT trends and threats, so we have high hopes for vendors addressing these areas such as Orca Security for protecting cloud workloads, Ordr for securing the rapidly expanding world of IoT devices and ColorTokens for delivering Zero Trust and Micro-Segmentation.
Have you made any significant (UK) vendor signings in the last 12 months?
Data Solutions' security division grew significantly in 2020, with revenue increasing by €7.5m (compared to the previous year). Growth was driven by increased demand for IT security solutions and our new vendor partnerships with Orca Security, Neustar and D3 Security. We also added Hive IO and AppCure to our Data Centre portfolio of vendors.
What specialism is your firm known for, and what sets you apart from your peers?
We've seen an increasing realisation from vendors that the biggest is not always the best. Large distributors who built their businesses rapidly have lost sight of their purpose and with it the personal touch. Ultimately, customers don't buy processes and automation - they buy from valued suppliers, those that spend the time to develop relationships, understand the customers' needs and provide service.
Our vendor partners welcome this approach.
Do you expect to grow in 2021?
Yes, we expect to continue to expand our business in the UK again this year. As we come out of lockdown and the economy starts to open up again, there is a growing confidence returning to the market. We feel this will drive sustained investments in IT particularly cloud/hybrid cloud and IT security.
At first glance, the rise of cloud must be pretty devastating for distributors if there is no physical product to ship. How have you adapted?
For many years, the vast majority of DataSolutions' sales have been of software licenses and more recently cloud services. The primary functions of a value-added distributor have moved beyond the basics of providing good logistics and credit terms so selling licenses and subscriptions is nothing new. Many of our vendors have also transitioned to delivering their solutions as cloud services so it has been a steady evolution of our business to adapt rather than being a shock.
Tell us one thing most people won't know about your company?
We recently made the commitment to become the first carbon-neutral IT distributor in the world (to be the best of our knowledge) by 2022. The environment and our planet's future is hugely important to us as a business. We initiated the set-up of Techies Go Green, a community for like-minded technology companies who want to begin their sustainability journey and take positive steps to become carbon neutral. We have over 70 signatories from leading IT companies that have already signed up and our aim is to grow this to 100+ by June.
*Brokers, sub-distributor and others not holding direct contracts with vendors were not considered for this report. We also chose to exclude those specialising in technologies outside CRN's core market. This includes distributors of mobile phones, industrial components, gaming software and office supplies. For the top ten, where possible we have isolated a UK distribution total. But the headline revenue numbers of those further down the list often contain international as well as UK sales. For hybrid reseller-distributors, we have attempted to split out just the distribution number. For hybrid manufacturer-distributors, we chose not to do this. The figures in this report are based on data from Companies House, or figures shared by the company.
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