The UK boss of our number-one VAR talks us through a strong year, and why 'playing nicely' will be key in 2015 and beyond
As Computacenter are once again crowned the country's biggest VAR in our annual CRN Top VARs report, we caught up with UK managing director Neil Muller.
He opened up on how the firm can keep on growing after two terrific years, and explained how "playing nicely" will be a key differentiator for the company in the years to come. Muller (pictured) also sheds light on the company's key goals, M&A strategy, the effect of Microsoft rebate changes, and many other market trends.
How would you sum up your priorities?
Our number-one priority is delivering long-term customer value. Our approach is about forming long-term engagements with our customers and our business partners - we are not here to make a quick buck. We truly believe that sustained growth will be a consequence of delivering long-term customer value.
We remain extremely focused on serving the CIO of large corporate and enterprise organisations - helping them address issues, such as service quality, flexibility, modernisation, cost, security, and compliance. Our focus is on enabling our customers, and our customers' customers, in order to help them drive growth through technology.
Was the performance in 2013 in line with your expectations?
It was in line, because we have our finger on the pulse in terms of customer requirements, pipeline, and forecasting. That is easier to do when you have a target market, and a set of customers and prospects that are so finely tuned. We want to be known for being the default services organisation for enabling users for the top 250 or 300 organisations in the UK.
The product business has shown strong growth both last year and into 2014; has that surprised you?
Nothing surprises me in IT after 21 years! Joking aside, our continued growth in Contractual Services not only helps our predictability of earnings but, also the pull-through of Professional Services activity along with hardware and software products. If you look at the dynamics within the marketplace, there are still an awful lot of customers on the path from XP to Windows 7 or 8. Big data and the analytics of big data is also a massive customer requirement which, in turn, drives storage and datacentre requirements, and networks are being put under ever more strain. IT is becoming a big enabler, more than it is a necessary cost.
A year ago you said you hoped for a bounce-back in the City this year - has that come to pass?
We have taken some share in the City - although that number has not moved on as much as I would have liked it to. The reason for that is twofold; one is that many of the investment banks are global organisations who like to buy in a different way - sometimes direct from the manufacturers. That hampers us from a value-added reseller point of view, but I do see a shift back to the VARs delivering more. The other reason is that investment banks tend to have bigger IT departments than most VARs, and they have a bit more of a DIY approach to services. I would like the City business to grow quicker, but our 70 per cent market share in retail banking branch support and management more than makes up for that.
Some VARs have suffered because of the changes to Microsoft's rewards programme - has it affected you?
We have been aware of the change in the Microsoft channel incentive programme for some time. It therefore would have come as no surprise to us, neither should it have come as a surprise to anyone else. As with all things in life, you can sit there and wait for things to happen to you, or you can be accepting of the new rules, make sure you understand them, and do something about them. We chose the latter. We have built a stronger contractual and professional services business on the back of Microsoft's fantastic technology. We are to be focused on delivering customer value through deploying and enabling great technology, rather than hoping profitable on the back of rebates.
Last year you picked out the trend of overarching outsourcing deals being replaced by tower-based, multi-supplier contracts. Is that trend picking up pace?
Absolutely. I see an ever-increasing propensity for customers to go down the route of selective outsourcing and the creation of effective ecosystems. What that means is that people do not only have to compete, but they have to play nicely together! I absolutely believe that a key reason for our success is that, whomever the customer and whoemever the ecosystem comprises, we play well as a team for the greater good of the customer.
Why are we nicer to play with? We have taken our traditional VAR way of working with manufacturers and we have applied it in to the services world. We have been an agnostic organisation in the reseller world, and we have transferred that into the services world. We do not need to win every battle, or every piece of work, but we are clear on where we are best of breed and where we deliver most value.
What can we expect from Computacenter in 2015?
You will see a lot of focus on transition, deployment and transformation for contracts we have already won, because it is not only important that you win them, but that you deliver on your promises as well. You will see continued focus on our contract base, continued focus on working with our vendor partners and, of course, with our ecosystem partners. I guess there is now another stakeholder at play: our customers are clearly number one, followed by our employees, then our business partners - and we now have our new services/ecosystem partners. They are the four groups of people I want to spend my time talking to.
And, after two very successful years, can you replicate those growth levels?
We can certainly replicate it next year due to some big contractual service deals this year. Our performance is a result of the market first and foremost, followed by our strategy - which is probably clearer than ever - and our execution. It's exciting times.
Does being a publicly listed organisation ever impede your ability to innovate, or place bets on potential growth areas?
No, it doesn't - I don't feel hamstrung. More to the point is where do we anticipate investing; we talked this time last year about why there are only three reasons to acquire, which are: reach; capability; and synergies. Synergistic opportunities are few and far between, and we have continued to grow our reach across the globe, as our customers have global requirements and we have grown with them - one of our latest geographic investments was in Budapest. We will continue to grow with our customers.
As for capabilities, we will continue to invest in all areas that are pivotal to our strategy of 'Enabling Users'. This will include areas within the workspace, datacentre, storage, networking and security. These are the things that we need to be the best at, in order to dominate in our chosen market.
To read a full profile of Computacenter - and its 99 closest channel challengers - you can download a PDF copy of CRN Top VARs 2014 by clicking here.