SoftwareONE's UK bosses on recent acquisitions, importance of hyperscalers and Microsoft price hikes

Zak Virdi and Andy Dunbar speak to CRN following the acquisitions of Centiq and HeleCloud

SoftwareONE's UK bosses say the recent acquisition of SAP specialist Centiq is "very key" to the company's overall strategy, and predict a "very buoyant market" for acquisitions over the next two years.

The Swiss reseller's acquisition of Centiq closely followed that of AWS MSP HeleCloud last month, which SoftwareONE said would "expand and strengthen" its AWS capabilities in the EMEA region.

CRN caught up with UK services director Andy Dunbar and UK managing director Zak Virdi to discuss the recent acquisitions, further plans for growth, Microsoft's recent price rises, key focuses for the future and more…

You made a couple of acquisitions recently. What was the rationale behind those and why did you focus on expanding your AWS and SAP capabilities?

Andy Dunbar: "The SAP acquisition is around supporting those workloads and modernising those SAP workloads onto public clouds to enable customers to drive scale. And the same from an AWS perspective, we've got a really strong AWS business."

Zak Virdi: "I think it's in line with our core strategy, in terms of S/4HANA SAP migrations on the Azure platform. And so the acquisition of Centiq basically gives us that capability which we have been building up globally across a number of other acquisitions. And it's another jigsaw piece which fills in that UK, EMEA-centric capability to really have credible experience of delivering projects in this critical area on a local basis.

"It very much plugs a gap that we had and it accelerates our capabilities in the SAP migrations on to Azure. It's a very strategic acquisition that is in line with our growth plans that we've developed as part of our ongoing engagement with Microsoft strategically about driving SAP and apps into the cloud, so it's a very key acquisition for us."

The acquisitions also see an expansion of the UK business. Is this something that will continue to be a focus moving forward through more acquisitions?

ZV: "I think the business is always looking to see where the opportunities are in terms of where the market is moving, and we move very fast within the business to realise that. These growth streams have been incredibly rapid in terms of their development in the last two to three years, and I expect the business to be making the right types of acquisitions for the right types of opportunities. I think the whole industry is moving along that track so I think there'll be a very buoyant market for acquisitions over the next two years."

How is the business, specifically in the UK, performing now and do you see the business growing post-pandemic?

ZV: "I think technology has been, thankfully, one of the areas that has been fairly well protected in terms of its opportunity during the pandemic. The technology sector has been able to work pretty much instantly from home and I think we've been fairly resilient.

"I think where we've had to really help our clients is helping them adopt all that technology in an incredibly rapid fashion. I see that continuing, and I think that actually it is really proven to businesses the need for technology, and actually how technology is an enabler. And that will lead to further growth and further speed in the technology sector.

"There's a number of outcomes that are being forecast in terms of inflation, supply chain issues, skill shortages, shortages in terms of being able to get people into the UK and working visas. I think there's a whole range of different elements that could affect the marketplace. But I think there's a real wave of change that is a really pivotal factor going forward in terms of the opportunity in the marketplace. I see, despite there being some headwinds, and there will be headwinds, that actually the innovation and technology will drive through that and create further opportunities. I'm very optimistic as to how people can adopt technology and the opportunity in the marketplace and what that means for us and our clients."

AD: "Everybody's obviously gone to work from home and is using Zoom and Teams. What we've started to see is customer explore that from a unified communications perspective We've won a couple of big deals around that where customers have seen the benefits of the consolidated platform with Microsoft and are starting to look at those critical workloads and are actually bringing that into the Microsoft stack."

SoftwareONE merged with Comparex not too long ago. Has that process now been completed and how has that changed the business?

ZV: "It was an incredible feat to integrate a business of that size together into one entity, one platform, one operation, you know, a complete integration. We didn't keep the entity separate, we actually have completely incorporated them into SoftwareONE. So it was an incredible task achieved by a lot of very smart people that really deserve incredible accolade for bringing those businesses together."

Which vendors and which areas of business are you seeing perform the best at the moment?

ZV: "I think the hyperscalers really are where it's at with AWS with Microsoft, with GCP, they're all driving forward incredibly fast in terms of their capabilities. I'm seeing some interesting developments now in the multi-cloud where we would find initially, a lot of clients being quite regimented in terms of working with one provider. But now we're seeing a lot more diversity in terms of how they're looking at different components within the different cloud providers.

"I think businesses move so rapidly in terms of deploying a lot of technology that the business has to catch up with the innovation that the technology teams have driven. And that is what is driving the finance part, which is about the financial management of the cloud deployments, as well as the security part, which is trying to identify the increased risks that have been generated as part of that rapid expansion. It's almost expanded so rapidly that the rest of the business is trying to catch up."

AD: "The sense I get from the customers is that, as we come out of the pandemic, the way that organisations are working has changed. So therefore, the end users' demands for accessing applications is changing as well. So this is having a knock-on effect in terms of how organisations can respond. And one aspect is they're looking to move to the whole as-a-service model which is coming to more and more fruition. So you're starting to see the hyperscalers really start to jump that as well.

"The other aspect is around the applications that people now want to access from home or wherever. They need to modernise these old school applications but lack the technical depth, so this is starting to really have an impact on some of the automation vendors, as well as the niche automation vendors, to actually support and provide this."

One of the vendors you have mentioned a lot is Microsoft, which is obviously one of your big partners. What are your thoughts on the recent changes at the company including moving to Azure platform and announcing some price rises?

ZV: "You've got to recognise the amount of technology that's been included. Our customers have actually had huge benefit of that enhanced capability over the COVID time, so it's important to recognise the real benefit that's being provided to clients as part of that. Going forward, I think it actually allows there to be renewed discussion around where the client can now go in terms of some of the other technologies that have been provided and, actually, what is the cost differential in terms of driving those technologies?

"The price increase on the Microsoft platform is really down to the enhanced offering they have included as part of their service and I think the price hike actually reflects the offering Microsoft now have. It's not as if they've increased the price without offering more, they have more and the price is really in recognition of that. So, I think it is down to the enhanced capabilities for where clients perceive value."

AD: "If you look at the Microsoft stack in itself, and then obviously the price rise, you could argue, okay, that's going to impact a lot of people, but more customers are looking at what else they've got in their Microsoft kit bag and are then looking at the other vendors that they've got, and where they can tactically consolidate into that Microsoft stack. And look, not every customer's the same, but there are opportunities to say ‘well, I'm not actually going to pay that fee for that vendor, I'm actually going to consolidate that into the Microsoft stack'."

You mentioned security a moment ago. You work with a lot of different companies and are in a position of responsibility, so how big of a focus is your own cybersecurity at the moment?

ZV: "It's probably the number one priority for us as a business, and for our clients it's absolutely critical, it's actually on the board agenda so it's a paramount element. This is why our clients are looking at some of the enhanced features, for example, on the Microsoft side to actually help resolve some of these cybersecurity issues."