Pixel-Shot - stock.adobe.com
Westcon-Comstor is a distributor that finds itself in the right place with the right portfolio as the demand for security and networking continues to surge.
Recent results have underlined that the business is heading in the right direction and, as with so many other businesses across the channel, things would have been even better if supply chain issues and shortages had not been a feature of the market.
David Grant, CEO at Westcon-Comstor, said the distributor ended the year with double-digit growth and has kept that momentum going as it moved deeper into its latest fiscal year.
“Our Q1 is a continuation of a similar theme,” he said. “We don’t report quarterly, we report at the half-year point, but all of the trends that I talked about, we saw continuing. The continuation of organisations defining their flexible and hybrid working environment drives an entirely new way of thinking about their infrastructure, from both the networking and the demands of cyber security identity management. It is a zero-trust security world at a time when employers are having to trust their employees to work fully effectively.
“That would have been significantly more if we’d been able to invoice our backlog of orders [that were created] because of the semiconductors and supply chain challenges. It’s not just the IT business-to-business community that is suffering, it’s a global phenomenon.”
Grant added: “We are continuing to see growth, but very little improvement in supply chain. Although we are hopeful that certainly by the end of the summer, we’ll see some improvement.”
The other feature of the market that is almost as ever-present as the component shortages is consolidation, and the distribution landscape was recently impacted with the decision by Infinigate to strengthen its position with the networking and security operations of Nuvias.
Grant is focused on his own business and doesn’t view many other disties as direct rivals because of differences in portfolio and geographical coverage. “We’re a firm believer in the fact that we focus on playing our own game,” he said.
That focus includes developing more support for partners and in looking after staff to make sure they are appreciated and given the assistance they need to deliver results.
Westcon-Comstor added Flex payment options this spring, with the firm looking to help ease the financial burden of partners that are shifting to a monthly subscription model but still operate with some suppliers that pay in one- to three-year models.
Later this year there will be a lot of noise made around Partner Central, as more support is rolled out to support the subscription model. Providing a marketplace has been important, but Grant is aware that partners require more depth and the company will ensure it can match those demands.
“As we move into a world that is increasingly software- and subscription-based, complete management of subscriptions, utilisation of consumption analytics, allowing the partners to look at the end-user customer subscriptions by the vendor or account, work out whether they want to upgrade,” he said. “So, that’s the whole subscription management and the ability for the partners to order hardware, software and cloud all in one place, all in one transaction.
“There’s a lot of talk about marketplace – it’s just a procurement route, which may be driven ultimately by the end-user. But from a partner point of view, they want access to a lot more. I think that’s going to be a real enhancement for the channel.”
In terms of Flex, the programme has been welcomed by many partners and Grant viewed it as a timely offering to help partners bridge the gap between subscription and annuity models.
“It’s been the most successful initiative that we’ve launched and we’ve got lots of interest, lots of inquiries,” he said. “It is interesting to the vendors and to the partners, so it’s been very successful.”
Those moves have, and will, help partners, but Grant is also acutely aware that the business is also about Westcon staff and attracting and retaining skilled individuals. Right now, for many, that means helping them get through the cost-of-living crisis.
“We are looking at a number of our employees across the business,” he said. “For them, a 7-8% cost-of-living increase is a real challenge. So we’re looking at that again. You have to look at country by country because different countries have different tax legislation. But we are absolutely spending time focusing on making sure that our employees in those roles and salary bands that are most challenged by price rises can find ways of alleviating some of those cost-of-living increases.”
Westcon-Comstor is also proud to run apprenticeship programmes and help identify the next wave of talent, which have been running in the UK for the past few years, with the vast majority of candidates staying with the business and landing permanent roles.
“There are a lot of distributors that have been talking about investing now in the skills gap,” said Grant. “I am really glad the other distributors are starting to catch up. But we’ve been doing this for five years.”
So, the numbers are good and demand is holding up, but inflation is rising, the cost of living is adding to the challenges and the supply chain issues continue to plague the industry. Despite those factors, Grant thinks that technology is a sector that can aid an economy, even one facing tough times.
“I’m of the view that even in economic downturns, technology is normally an enabler of productivity efficiency,” he said. “If the market gets tougher, it will get tough on everybody. But technology is a burgeoning industry and is generally more resilient than some other markets.
“We are not seeing any reasons not to be positive about this year. A lot of budgets have been set for this year already. I’m not anxious from a demand point of view this year.”