NVIDIA partner Vespertec eyes 200 per cent growth fuelled by AI demand
Manchester-based reseller is leveraging NVIDIA partnership to capitalise on AI infrastructure needs
NVIDIA partner and Manchester-based reseller Vespertec has seen a 40 per cent growth in turnover for the financial year of 2022/2023 to reach £22m and is expecting even further growth of up to 200 per cent in 2024 as the business matures.
Allan Kaye, co-founder and MD at the company, tells CRN the expansion was driven by increased maturity and credibility within the industry and its NVIDIA AI/GPU business.
Vespertec is a hardware-focused IT reseller specialising in datacentre infrastructure like compute, storage, and networking. Its core business is building custom server solutions.
"We started in 2014, so it's around 10 years old now, and our target market is typically large organisations procuring IT at a significant scale, where the technology we evangelise becomes relevant," Kaye explains.
"These organisations often have an international or multinational footprint, like companies in the finance sector needing infrastructure in major financial centres."
Kaye says at the moment the company's target customers are primarily businesses with a "significant IT spend," which, he adds, is the most important measure.
"It could be a service provider with a modest annual turnover but high IT infrastructure spend, or a billion-dollar telco with hundreds of millions spent on IT annually.
"The limiting factor is the IT spend, which is what we're looking for to add value."
Focused on organic growth, Vespertec does not exclude M&A potential
The MD sees this moment in the company's history as a chance to scale the business and sustain the growth of these past few years to fully establish themselves in the industry.
"We're also interested in specialisations like advanced cooling technologies, immersive technologies, and direct chip cooling, as the infrastructure moves towards liquid cooling becoming a necessity for high-performance compute and AI-based infrastructure.
"The heat dissipation needed for AI servers has driven interest in advanced cooling technologies like liquid cooling, which is becoming mainstream and a focus for server vendors and datacentre operators."
He adds that the rise of AI and demand for NVIDIA products has been good for their business as they've won a lot of business off the back of that demand and has also increased demand for high-performance networking and storage solutions.
In order to continue on this growing trend, he says Vespertec has also invested in a traditional marketing function over the last 12-18 months, bringing in a marketing director and PR team to focus on increasing brand awareness.
But while the growth seen so far has been exponential, Kaye explains it's all mostly organic.
"We're not an organisation that's aggressive with acquisitions, but we're not closed to the idea if we see the need or specialisation that could be interesting to onboard."
Volatility in supply chain
However, there are still challenges that the reseller is facing, and Kaye points to market volatility as a main concern.
"The market we operate in is volatile, with flash and memory price volatility coupled with exchange rate volatility, as we're a multi-currency business buying primarily in dollars.
"Managing supply chain issues and restricted supply to influence market prices can also be challenging."
He explains Vespertec is using forecasting to deal with this volatility issue, and it's working with suppliers to try to predict demand.
"We also proactively talk to customers about the challenges and have strategies like holding inventory at a guaranteed price to offer just-in-time delivery and mitigate volatility for customers with repeat business requirements."