Krome Technologies boss draws recession survival guide for channel businesses

CRN spoke with Krome director Rupert Mills who is aiming to earn revenues of £25m this year, up from its £21.4m FY22 result despite recessionary challenges

A strong set of services is crucial for channel companies wanting to find the light at the end of the tunnel during a recession.

That's according to Krome Technologies co-founder and director Rupert Mills, who recently sat down with CRN after posting solid full-year 2022 financial results which saw revenues grow 22 per cent from £17.2m in 2021, to £21.4m.

Mills credited this growth to how Krome used its time during the Covid-19 pandemic.

"We spent a lot of time working on our internal systems and updating those and getting them ready for when everybody returned back to work," he said.

"I think we've managed to reap some of the rewards of that in the new year once everybody returned to their office. We've got better systems, better processes and some new products in place that we've been able to take forward in the market."

Krome, which bills itself as a service-centric technology consultancy company, was founded in 2009 during a previous recession.

Mills claims his company's foundations prepared it for the current macroeconomic environment and gave a few words of wisdom to other channel organisations on how to navigate these waters based on his experience.

"Krome started during the last recession, which was not a great time to be starting a business but it made us understand the challenges the recession brings to businesses," he said.

"Where we are now looking into another recession is, if you are good at what you do and you deliver a fair service or good service to your clients and you add value, I think that's vital.

"When you get down to the point of choosing anyone who can choose a product at a price, it's no way to do business because you'll just be a race to the bottom.

"Whereas if you are out there providing a real service to customers, they can recognise the value in that hopefully, and that will stand you in good stead in a recession.

"I think if you are a product shift business out there, right now in the channel, it's going to be difficult for you because margins will get tighter and it's less fun for everybody."

Continue reading to find out where Krome wants to expand next into in mainland Europe, and what technologies it sees as its 2023 high-growth areas...

Krome Technologies boss draws recession survival guide for channel businesses

CRN spoke with Krome director Rupert Mills who is aiming to earn revenues of £25m this year, up from its £21.4m FY22 result despite recessionary challenges

Krome sets sights on DACH region

In addition to its UK turnover, Krome also expanded its operations into international markets in 2022, opening a new EU subsidiary, Krome Technologies BV, in the Netherlands; which recorded a turnover of €1.3m in its first year of operation.

With a combined turnover of £22.6m across their UK and EU operations, Krome said this has been their strongest year to date.

Looking at where it wants to expand next, Mills said he is eying up the DACH region as the group's "next natural step".

What does Krome see as its 2023 high-growth areas?

Mills highlighted AI and security as the "obvious answers" here.

Last year Krome opened a brand new SOC based in its head office in Surrey, which has led to the group seeing "huge growth" in customers looking for outsourced security services.

"AI goes hand in hand with that because a lot of the security products are using AI inside them to be different from what security products used to be," Mills said.

"I think AI inside security will be a big growth this year."

He added that cloud optimisation is going to be a big yet "less obvious" growth area too.

"There's a lot of customers coming into recession who will look at the cloud services they took on during the pandemic and potentially say, ‘okay, we've rushed into this, we've got it all working, but it's costing us too much money.'

"I think there'll probably be a lot of optimisation work there to say, are you using everything you're paying for or are you running it as well as you can be, and not overpaying for what you're using?"

Krome aiming for £25m revenues in 2023

After posting earnings hitting £21.4m, Krome's other co-founder and director Sam Mager said the group was "determined to break through the £20m mark" in its FY22 results, which it clearly achieved.

Looking ahead to this year, Mills revealed Krome is aiming to achieve revenues of £25m.

"£25m is an ambitious target going into a recession to grow again. On top of the growth we did last year. But we were organically funded, organically grown," Mill said.

"We're not funded externally or anything like that. So I think if we can achieve growth again this year, that'd be great. And £25m would be even better."