Exclusive Group delivers strong H1

Those who say distribution is on its last legs in the cloud world have been given some pause for thought with the latest revenue numbers from Exclusive Group

The phrase 'distribution is dead' is one that still gets bandied about by those trying to get some shock reaction or push a SaaS solution that they don't think needs to be sold via the indirect model.

Those keen to talk about the post-distribution world might have to wait quite a lot time for their words to have any real meaning because those existing players in the market continue to deliver growth and expand their geographical coverage.

Exclusive Group has released an H1 update this lunchtime which reveals that in the first half of 2015 it gained revelues of €370m, a 60% increase on the same period last year.

Some of that growth was fueled by acquisitions but for a like-for-like basis things still improved by 42%, which improved on management expectations by 10%.

The Group saw decent performances across its operations, which includes Exclusive Networks, BigTec, ITEC and its Exclusive Capital operation.

At the start of the year the value added distribution group had stated an ambition to grow its operations geographically and establish the Capital finance and leasing operation in France before replicating that experience inn the UK market.

Olivier Breittmayer, CEO of Exclusive Group, said that decent market conditions had helped it exceed its expectations.

The demand for cyber security drove Exclusive Networks and there was also increasing interest in BigTec and its transformational data centre project support, with the VAD doubling the number of countries it operates in across EMEA to a total of 12.

The services ITEC operation also started to deliver then numbers and is expected to increase in importance in the future as the distribution group develops its own white label managed and cloud services.

"I heard that distributors will be gone at least ten years ago. Perhaps if all you do is distribution that is logistics and shipments then you will be in trouble. But even in the era of the cloud there is still a need for taking new vendors out to market and for educating the partners. There will be a need for more education, which is an opportunity for us," he said.

One of the consequences of being able to so solidly rubbish the notion that distribution is looking fragile is that more vendors come knocking looking for support and competitors take note and try to poach some of the names on the product roster to get a slice of the action for themselves.

Breittmayer seems fairly relaxed about the rest of 2015 and the market conditions that have helped drive revenues are set to continue.

He is also working to a plan that so far has produced the goods and still has some way to go before being completed. There should be a Capital operation in the UK at some point and that part of the strategy is being worked on.

The UK remains the main market for the Group, delivering around a quarter of revenues, and there will be attempts to get more out of some of the existing territories, including a recovering France, Germany and the Middle East.

There will also be an opportunity going forward to develop more of the services that should appeal to those resellers unable to develop their own managed services and cloud offering.

Barrie Desmond, COO at Exclusive Networks Group, said that it had charted the changes in the way that technology was being consumed and had been able to continue to play a role as a market maker for its chosen vendors.

"We see ourselves as being a services based business, helping with market entry and launch, delivering finance, complete support and our own range of managed and cloud services," he said.

He added that even SaaS vendors were starting to realise that without the channel they were denying themselves the chance to reach millions of customers via partners.

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