Channel Digest: Growth by any means necessary

This week's Channel Digest newsletter tackles the different approaches to growth taken by channel partners - from aggressive M&A to careful business investments

What a week. I may have fired a little early with the whole "we've reached peak M&A" newsletter last Friday. In the past seven days, we've surpassed even that, as companies from Air IT to Northamber announcing buyouts.

And, not to dodge the elephant in the room - on Tuesday, it emerged in a Sky News report that Daisy Corporate Services is ‘on the brink' of merging with Macquarie-owned Wavenet.

Both companies feature in CRN's Top VARs, at No. 16 and No. 34 respectively.

With nearly £330m in combined revenue, the merger would create a formidable new player in the channel and completely shift partner dynamics. So far, the companies are keeping mum on the topic, with Lindsay Charlton, COO at DCS giving CRN a friendly, but firm ‘no comment'.

While many are opting for the M&A route, there is still more organic growth to be found across the channel.

This week, Nick Paul, CEO of Cisilion told CRN the MSP was setting its sights on a six-figure revenue in the next two years – a prospect that seems well within reach for the Cisco and Microsoft partner, which has climbed from a modest £5m to £69.5m in the four years since 2020.

Even as the pandemic technology boom puts wind in some companies' sales (pun intended), it's been a hindrance to others. For the founders of Titan Data Solutions, starting up a specialist distribution firm in late 2018 was a brave choice and not folding in 2020 – even more so.

In just six years of existence, the upstarts have managed to come out of their first big challenge unscathed and are also now building towards their first £100m year.

But Titan and Cisillion are still on the smaller end - and the bigger you are, the harder you grow. Computacenter's mixed Q1 trading note proved as much this week.

Diversification is the name of the game for the services giant which is weathering the storm of a challenging economy by investing across multiple service lines as well as technology sourcing.

Computacenter's strategy is sound, but whether the note will do enough to quell investor sentiment remains to be seen – the services giant's share price is down since April 1, but overall up year-on-year.

On the other side of the channel, vendors continue to invest heavily in their AI capabilities with some fairing better than others. AWS this week announced that it had reached the coveted $100bn revenue run rate, becoming the biggest revenue driver for Amazon overall. Unsurprisingly, this was off the back of AI investments.

Meanwhile, HP is preparing for the AI era by revamping its partner programme.

There are many ways to skin a cat, so it might still be too early to count the winners of the AI race.