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Westcon-Comstor boss applauds growth through challenging times
Distributor has seen its partner base expand, has managed inventory in the face of shortages and is in a position to surf the rising demand for security and infrastructure solutions
Westcon-Comstor’s boss is expecting the return-to-work movement to spark more IT spending and for the current focus on security to remain at a high level.
The distributor has reported strong results through the pandemic and been able to navigate the additional challenges of Brexit and component shortages.
David Grant, CEO of Westcon-Comstor, said the move by prime minister Boris Johnson to signal a reopening of society from the 19 July would spark more activity from customers.
“We saw a huge set of investments, largely I think in the enterprise, government, corporate sectors as people want to work from home,” he said. “But as people start to think about the return to the office, there is no doubt that there is going to be another cycle and another wave of technology-refreshed investments so that people can work productively, within an office environment and remotely.”
Grant said there was also an acute awareness among most customers that security was key in enabling flexible working, and spending in that area would also hold up.
“The security challenge of having a hybrid working environment is different again from having people in the office full-time or having people remotely full-time,” he said. “Our vendors, our channel partners and we are in a space that will help really support that return-to-the-office working environment.”
As well as navigating the pandemic, there have been other challenges for distribution to contend with and Grant views the decisions Westcon-Comstor made around mitigating Brexit as helping to set the firm up to cope with the surge in demand for remote working tools over the past year.
“We have invested in over $30m of additional inventory in the UK to get us through Brexit, to get us through the semiconductor shortages, and those kinds of investment are also really important for our partners and our customers,” he said, adding that this represented a 25% increase.
That investment in stock is one of the reasons the distie has become more attractive to partners. With its reputation in networking, security, infrastructure and collaboration, the channel player has been seen as a major source of goods and services and, as a result, has seen more resellers flocking to work with the business.
“We have a big focus on services and in the UK in the last 15 months, we have added 500 partners to what we would describe as frequently buying customers,” said Grant.
Inventory was one factor, but Grant added that the business had “throughout the whole of the last 15 months done more marketing to stimulate more demand, really focusing on some of the technologies that would be in more demand”.
He said it had also added more high-profile vendors to the portfolio and continued to invest in its longstanding relationships with existing partnerships.
The business also added $80m of credit in the UK to help resellers gain access to finance, and that drove an extra $450m of business across Europe last year.
Westcon-Comstor also has objectives of its own on the services front and Grant is keen to see its commitment to services increase.
“We have an objective to get 50% of all of our revenues, as a group, from recurring offers, so whether that is software subscriptions, cloud, the maintenance-renewal type activity that we’ve been doing for years,” he said, adding that the business was already around the 40% mark.
Like many in the channel at the moment, Grant is feeling positive about the prospects for the rest of 2021 and beyond.
“I think we’ve got good reason to be confident,” he said. “What the last 15 months has taught me is that there are elements that are outside of our control that come along. The semiconductor shortage and the pandemic would not have been identified two years ago as part of your risk register, necessarily. I think it’s the organisation’s agility and resilience and speed of response that gets you through those topics.
“I think the other reason we are confident is, we are seeing a tremendous recovery in the mid-market and the small business environment. We just need to keep on focusing and making sure that in all of the things that we’re doing: one, we keep looking, to try and look round the corner, to make sure there’s nothing else that’s going to come along to to impact us negatively; and to remind ourselves of all the things that we’re doing well and why we’re successful, so there’s no chance of any complacency creeping in.”