Jigsaw24 CEO on why the demand for hardware will continue beyond the pandemic

Roger Whittle talks to CRN about hardware demands, supply shortages, sustainability and plans for growth

The CEO of the UK's biggest Apple reseller, Jigsaw24, expects the demand for the hardware it sells to continue beyond the pandemic and says the ongoing supply challenges are "improving at a very rapid pace".

Hardware demand rocketed during the pandemic as businesses shifted to remote working, with companies investing in their IT to ensure employees could continue their jobs effectively away from the office. But as the demand increased, so did the shortages in key components like semiconductors.

And while the pandemic had a "significant impact" on Jigsaw24's profits, which were expected to be higher pre-pandemic, it still posted record EBITDA and record core revenue for 2020 at £5.4m and £129.6m respectively.

CRN caught up with the company's CEO Roger Whittle to discuss future plans for growth, the demand for hardware, supply challenges and the importance of sustainability.

Apple's results came out recently, posting a record June quarter and increased hardware sales. Have you seen a noticeable knock-on effect?

Yes, we have. Jigsaw's in a very strong position and this has never been better.

Apple run a very strong business and they made some very shrewd strategic decisions many, many years ago and are constantly reaping the benefits of that.

I always try and look at it from an overall view, which is that there are six or seven form factors. Another form factor soon coming I think without doubt is the glasses. And if one looks at that, Apple has a very strong position in all of those.

And that's linked together with a really strong ecosystem with the right blend of hardware and software, and then services, some of them free, some of them chargeable, all of them differentiated. And when you mix it together, it's a really strong proposition.

There's over a billion active users now in the Apple iCloud and that's growing all the time. And I wouldn't be surprised if that hits two billion soon. A third of Apple's gross profit comes from product-related services to iCloud and I don't see it changing.

Are you still seeing the demand for hardware that increased in the pandemic, and if so, how long will that last?

Apple has had double digit growth in hardware for many years now.

What happened was the growth was going from 15 or 20 per cent, towards 50 or 60 per cent. It almost certainly won't carry on at 50 to 60 per cent and will resume at maybe 15 to 20 per cent, but I think there are certain categories always which will overperform.

I think that Apple is unquestionably on the way to continue to sustain double-digit growth. Laptop sales, notebook sales, call them what you want, will continue to be very healthy.

Why is the demand for the hardware you sell not slowing down?

The market is growing, and Apple shares are growing within those markets. Apple is now relevant, I think, in all sectors of the market; it wasn't before but it is now.

It didn't have such a high share as it does now and it will have an even higher share tomorrow. If you look overall on Apple's market share, it's still not that large, there's plenty of space to grow still.

I see a bright future for the rest of this decade and beyond.

How much are the ongoing supply shortages and challenges still impacting what Jigsaw24 can do?

It has been mixed. It has been challenging but it is improving.

I think we're very well placed with Apple. Things are improving at a very rapid pace. Apple are incredibly well funded and financially strong, and I think we'll all start to see some considerable improvements as we move towards the end of this year.

Jigsaw had a strong 2020 despite the pandemic, what are you doing to continue that growth?

We'll keep investing, as we have this year, for example, in the move towards ServiceNow and in the establishment of the new service centre.

We are launching a new service centre this autumn on the M1 which is very well located. And that will have capacity for 150 people, and that's going to be really good.

We're ambitious at Jigsaw24 and we're investing in the future, particularly on services and our managed service capability.

What is driving the move towards services in the channel and what challenges does that pose for your business, which primarily sells hardware?

It's about the customers' needs. They come first, second and third with us, and always will do. They are looking for experience and expertise and we've got both of those in spades.

And it's our job to help them and work closely with them. The customer can turn to us not only for Apple or end user computing needs, but also for help on projects.

It's part of a long-term strategy and it's just constantly happening. So now, I think it's fine, because it's been thought out, captured in advance, and it's been well resourced and well planned. We're ahead of where we wanted to be at the moment at Jigsaw24 and we're very pleased with our progress.

I think the important thing is ambition and investment. That's two important words that are associated with Jigsaw24 because we are ambitious, and we are investing, and if you do that then you reap the benefits.

Is the channel doing enough to be sustainable?

I think that it obviously is one of the biggest challenges facing society at the moment. And what it actually boils down to is changing the way we all do things, and it also boils down to a lot of investment, often in new technology.

We're very close to being able to announce, we're not quite there yet, that we're net zero carbon. We've invested a huge amount in that area and we're going to continue to do so because we think it's really, really important to maintain a leadership position on sustainability, because it's the challenge that's going to define our future for the next 10 or 20 years.

I don't think the channel is one thing, I think it's a bit like society. It's a mixed bag like on most topics, some are ahead, some aren't and some are in denial.

There's a very mixed picture but I think, overall, people are starting to realise how important it is. I think we are reaching a tipping point and I hope so, because there's a lot more that needs to be done. And some manufacturers are leading the way too, which is good.