At the end of the first quarter of 2011, Irish Computer asked a number of reseller luminaries for their impressions of the year to date and what they thought the rest of the year would bring. Now we’ve gone back and asked them what actually happened in 2011 and how they think 2012 will shape up.
David Kirby, general manager, Datapac
Six months ago, Kirby said that although there had been no real increase or decrease from the fourth quarter of 2010 to the first quarter of 2011, the pipeline was "very very big". He expected the second quarter to be "very very good" and to achieve growth of 10-15% for the year.
Today, he describes the year as being "very strong for Datapac" and expects to finish with growth of around 10%. The pipeline remains very large. "For the first time since the recession took hold, we have been winning six figure deals with remarkable consistency throughout the year," he claims, observing that Irish private and public sector organisations are making larger technology investments again.
In terms of significant developments over the year, Kirby points to the opening of a new office in Cork that is expected to create 20 jobs over the next 12 to 18 months, primarily in business development and technical support.
One high profile win over the year has been the deal to implement an integrated IT solution to support the rolling out of IT services for the GAA. It has installed hardware and software to support the GAA’s ticketing solution in all 32 counties and is managing the GAA’s server infrastructure at Croke Park, ensuring a highly robust business continuity plan for critical applications, including 24/7 monitoring of servers and applications in the GAA offices.
He is also very pleased that Datapac has "become the only Irish company this year to make it into the MSPmentor 100, a distinguished research report identifying the world’s top 100 managed service providers (MSPs)". It placed ninth in Europe and 58 in the global rankings. Kirby ascribes this to investment in the company’s network operations centre, its managed services professionals and service portfolio.
When it comes to growth areas, Kirby highlights virtualisation, cloud computing, unified communications and managed print services. He believes the market has reached "a real tipping point this year in terms of uptake in these technologies and services, and Irish businesses are now making significant investments in these areas".
It’s understandable there’s growth in these areas because they are providing firms with tangible cost savings and a fast return on investment. "With our strong partnerships and experience, we expect these areas to continue to be very strong," he continues. In terms of threats, Kirby says cloud services could have an effect on maintenance contracts, but Datapac still feels "the positives outweigh the negatives and we are fine tuning our cloud offerings to ensure we have the right models in place so that it’s a ‘win-win-win’ situation for Datapac, our partners and our customer base".
Another potential area of difficulty can be in recruiting the right people. "We are lucky to have a very strong team at Datapac but are always on the lookout for the right people to strengthen the team further. With so many large international technology companies extending their operations or opening new offices in Ireland at present, local providers can find it difficult to compete for the best talent."
He is very happy with Datapac’s vendors, saying they have "really stepped up to the plate this year and are providing really good support to partners, in terms of new products, resources and finance". One example is Datapac’s ‘Affiliate Elite’ partnership with EMC where both organisations work together on sales and marketing initiatives; especially for cloud computing, storage and data recovery services.
Looking forward to 2012, Kirby says it’s still too early to make a prediction of how it will go, "but we can say with some confidence that there will be further growth as our pipeline is so strong".
Edel Creely, managing director, Trilogy Technologies
Six months ago, Creely said market momentum was improving in 2011 and predicted continued growth for the business and the addition of more new clients as the year progressed. Today, she thinks that the company was probably "a bit cautious at the beginning of the year" and is happy to report that Trilogy Technologies has experienced significant growth. "We’ve doubled turnover in two years and we’re in the Deloitte fast 50 so we’re very happy with where we are today," she says.
A lot of new business has come from managed service IT support contracts. Creely attributes this to the technology it’s using and the edge/point mobile portal it has developed. The company has won deals with some very large organisations where it is supporting 500, 1000, or up to 1,400 desktops. She says its solution is helping customers to have better visibility and management of their infrastructure.
Trilogy is planning to take edge/point to the UK market and is in the process of appointing a UK company to resell it. Meanwhile, general managed service contracts involving ongoing management for infrastructure for clients are also going well.
Six months ago, one of Trilogy’s success stories involved a contract to provide Wellman International with a fully redundant virtual private cloud infrastructure based on IBM servers, storage and backup with the infrastructure built on VMware VSphere 4 technology. At the time, Creely believed that desktop virtualisation was "starting to gain traction in the market" but today she is a little bit more circumspect, stating that although there are opportunities in virtualisation, they are still at the server side. "Desktop virtualisation is still a very expensive solution," she suggests, adding that connectivity can also be an issue for some people.
In any difficult economic situation there are companies that try to steady the ship and work with what they have and there are others to decide to grow the business and take advantage of opportunities. Trilogy has continued to see success from companies operating in export markets and in sectors such as the food market, financial services and general services. Businesses in those areas are investing and exploiting opportunities, such as the export market, which are placing increasing demands on their IT.
Creely is happy with the level of support provided to Trilogy by vendors and value added distributors. She thinks people within vendor and distributor organisations "are more focused, and have better communication and understanding". Trilogy has engaged in various activities with vendors and they have worked very well together. Creely sums up 2011 as a "great year. We’re going to meet our expectations and achieve everything we set out to achieve". As for 2012, she believes Trilogy will maintain the same level of growth, adding that it has a number of initiatives in the pipeline.
James Finglas, managing director, MJ Flood Technology
Six months ago, Finglas was hopeful about 2011, reporting that the year had started well for MJ Flood. Today, he’s pretty happy with the way things have turned out. "We’ve had a strong 2011, up significantly on the previous year," he reveals. There has been a strong return of projects, reasonably sized ones too, which he attributes to many businesses having reached the point where they had to invest in technology again.
"There had been such a stagnation in demand that it reached the point where projects had to go ahead because people were falling behind," Finglas says. MJ Flood Technology has even been able to start hiring people, filling as many as six positions in the past three months.
Earlier in the year Finglas had suggested virtualisation and cloud computing as potential growth markets for 2011. While cloud computing hadn’t reached mainstream adoption, interest was starting to spread beyond areas like mail and CRM to security and archiving, he said. Today, the main area of interest is mail and Microsoft’s Office 365. He attributes this to "a lack of understanding around cloud" which is still a bit of a buzzword. But while MJ Flood is not seeing a large amount work on moving infrastructure into the cloud, Finglas believes it will happen.
As for virtualisation, there’s still "a massive amount to be done" but it is quite a strong area with companies seeking to consolidate and reduce ongoing running costs.
In terms of opportunities, he says there has been an increase in what companies are looking for across the board. With so many businesses having a freeze on headcount, there has been a big opportunity to augment services into customers that are running their own projects internally by providing them with access to skills externally that they may no longer have in-house. "We’re seeing a lot of activity around that," Finglas reports.
One thing he has seen shift in the past six months or so has been the weighting given to price in tenders. While it had risen from 40% to 55%, he says it has started to slip back again, typically to around 45 or 50%. The big emphasis on price had made it hard for companies to articulate their value add but it is starting to become a little bit easier.
He says that although it’s a very competitive market, MJ Flood is careful to ensure that it competes to a certain level but is also prepared to pull out of anything that becomes unprofitable. "There are certain companies we compete against and there are certain companies we wouldn’t compete against," he adds.
The main threat is still at the macro level in terms of the wider economy. Has it bottomed out? Will the economic outlook begin to pick up? It’s still difficult to know. "We benchmark ourselves against some of the competition and the sense from our peers is that things have picked up generally. It’s competitive, but we’re surviving and we’re back to growth. There’s a cautious optimism, but it’s fragile." In terms of distributor support, he says that with the exception of a few key value added distributors, there are very few left that MJ Flood deals with. And many vendors have opted for a pan-European approach that doesn’t really suit the Irish approach.
For many, their local presence is just a sales model and they tend to head back to the UK mainland when things get tough. He thinks the outlook for 2012 is reasonably bright with the caveat that there isn’t a serious knock-back on the Irish market from events in the wider world.
Martin Butler, sales and marketing manager, Business & Scientific Services
Butler hasn’t changed his description from the early part of the year of 2011 as a "reasonably good" year, adding that Business & Scientific Services (BSS) is on course to finish off well by year end.
Over the past few years, BSS has been developing a ‘services and skills’ ethos, investing in new skills and technologies with the necessary personnel to deploy them. Butler highlights software asset management (SAM) services as an area where it has enjoyed recent success. At the same time, BSS has added to its Microsoft licensing gold partner status by gaining gold status for Microsoft’s Lync solutions.
His blueprint for growth and opportunity hasn’t changed over the course of the year. It’s still niche product sales and services. He points to software enterprise licensing services, in particular software asset and optimisation management. Microsoft Lync solutions will be a particular focus for infrastructure services going forward.
When it comes to potential threats, he highlights the state of the Irish banking sector and confidence within the Irish and the international economies. Butler has no complaints about its relationships with vendors and distributors, either with newer partners or long-established suppliers. "Our business focus and relationships with new vendors and distributors has developed strongly, while the older established relationships are still very steady too," he reports.
Looking forward to next year, Butler says expectations are good "with annual improvements in most areas of business expected on the year."
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