Distributor Directions: Building new business value

Are we over the worst of the market downturn?

Dominic Whitehand (DW): I think we are over the worst of it in most market segments. We are seeing a lot of project stuff come back, and there are a lot more resellers signing up again – we’re getting four or five each week, so people are actively looking and getting out there making sales. Things that were affected were a lot of the consumer products like printers and stuff you can do without if you have to, as well as VoIP. In many respects, people think of VoIP as a nice-to have and don’t see the business benefits: They see the phones are still working so why go to a fancy new system? It [the GFC] was a bit of a hiccup, but it’s picking up now.

How has your business fared over the past year?

DW: Overall, our business grew 63 per cent year-on-year, and it was probably stronger in some areas than others. We are lucky because we still have a strong focus on security. The security market was perhaps one of the least affected by the GFC because there were counter-balancing measures in play. When economic conditions are tough, and organisations make sweeping changes to their resourcing and operations, you are left with myriad issues that need to be addressed even more stringently than before. For example, there are disgruntled employees trying to deface websites and hack into company databases, there’s data leakage as they try to take intellectual property and customer information with them, and previously-employed individuals become desperate to maintain their lifestyle and resort to cybercrime in the form of spam, phishing, pharming exercises and so on. That kept the security market fairly buoyant.

What’s the percentage split between security and your other areas of business?

DW: Security is probably still 65-70 per cent of total business, but it keeps changing. All the vendor technologies are converging and many of our vendors are now doing Web filtering, or putting VoIP switches together. They all have antivirus and anti-spam and it keeps converging more and more.

What are your top areas of focus?

DW: Systems, partner enablement and marketing are very strong focuses for us as we want to further develop the value we bring to the channel. Security is obviously a strong focus, but we want to go into other areas and a lot of our customers are drawing us into those. Networking for example, is a no-brainer as it’s converging so much with security. But most importantly, this will be the year of partner enablement for us and a lot of that will be systems-based. Jonathan [Odria, sales director] and I realised some time ago that to develop and differentiate ourselves from the big guys generally, we had to have some real differentiation, and not just say it’s value-add. I think the enablement side is what will change that. Shortly, we will make some strides which should pull us away from the other guys.

Does that entail new staff investments?

DW: It will do, but a lot of it is in online systems. This month, we will launch our Customer Centre, which is the lean front-end to our NetSuite system. This provides resellers with capabilities around creating quotes, seeing statements, looking at orders and invoicing, creating support and RMA cases. Shortly after that, we will add e-contracts functionality, which is basically all our renewal business. Resellers will be able to see upcoming contracts, and it will automatically create renewal opportunities for them with pricing, send reminders and things like that. The partner enablement is also going to be accompanied by services growth. We’ve had our SecureWise branding for the Academy side of our business for some time, but we’re going to relaunch that for the professional services training and premium online content. We have some exciting ideas about how we’re going to use that to add value to some of the maintenance and warranty services we supply ourselves. And we want to build a community that feeds into that in the IT security space. That will be within the next couple of months.

What other initiatives do you have planned over the next year?

DW: There are two other things I can’t name right now, but one will be our online distribution arm, which is really aimed at opportunistic resellers that aren’t too committed right now, or Gen Y resellers used to doing things online. We want to provide a de facto place to go whenever they need something. Our other initiative is more around enabling resellers online and doing the hard work for them to put an online business together. This could be for old or new resellers. They might just want a website and that’s it, or they might want ecommerce, CRM, smart forms, marketing included in. They might want to fill their catalogues with products, which we can help fulfil. It will be interesting to see how that goes. It’s like we’re getting into Web services for the channel. We will probably go as far as giving them a business-in-a-box to help them get going quickly. Distributors are looked to for assistance with marketing and things like that, which is what we’re trying to provide.

There has been significant consolidation across the reseller channel in recent years. Are as many new companies starting up?

DW: We are probably driven by the online businesses, which is why we’re thinking around that part of the market. Gen Ys have that comfort factor with Web technologies and they’re the ones that buy the most online. Even things like Facebook and Twitter – everyone is saying you should pick these up and utilise them for sales and marketing. We want to enable this Web push and have the scale to develop applications.

On the more traditional side of things, consolidation has been good in that it’s pushed out a lot of the raggedy-taggedy resellers. There are much more solid reseller businesses out there now.

What moves will WhiteGold undertake on the technology front this year?

DW: We will stay strong in security but we want to flesh out the storage and networking businesses, as well as the VoIP side. We get so much opportunity thrown on the table and we have to weed out what’s good for us, and how we diversify and grow. At the same time, the technology is converging. Storage in the next 18 months will definitely grow again for us, and networking more on the carrier and ISP front, where we’d like to strengthen our presence.

Will this involve bringing new vendors on-board?

DW: Some of it is on-board, but a lot of it will be additional and at a higher end. We’re also getting to the size now where we are starting to put in product managers to assist the team. We’ve brought on a Kaspersky and Barracuda vendor business manager so far to evangelise those products on a national basis. The individual then farms out opportunities to the existing team, who put those through their reseller bases. New Zealand is also still on the cards for us – there is plenty of opportunity there, we’ve just been too busy here.

We never really took off with storage – we dabbled and had our issues with direct sales teams, which made it hard to work. So we’re looking at an SME player, as well as cloud-based offerings. We have looked carefully at virtualisation and we brought on Astaro and AEP as they have VMware-certified appliances. Virtualisation, cloud-based services and video-as-a-service are also opportunities.

Is it better to be a traditionalist or innovator right now?

DW: It’s best to innovate in a traditional way. What I mean is, don’t innovate for the sake of innovation. You need to innovate with something that will add tangible value to your customers and strengthen your UVP [unique value proposition]. Otherwise it’s worthless. It’s fine to do good things for our vendors for 2-3 years, but how do we step forward and grow and get more capabilities at our level? That’s where the enablement comes in – it can’t just be what the vendor wants to talk about, it has to come from us.

What are your biggest challenges as a distributor?

DW: Costs associated with freight, foreign exchange and bad creditors. Over the past three years, we have significantly changed our approach in all these areas and it is paying dividends, but it still requires constant monitoring and adjustment. Our systems are excellent, as are our people – and that’s what helps us to stand tall and tackle any and all of the various issues we face.

Has your partner mix evolved in light of ICT convergence?

DW: We are getting a lot more ISP and carrier business. The partner mix changed quite a bit when we started doing the unified communications side, and it’s a new market if you like. The voice market is very different to the data market but they’re converging, so we had a lot of new resellers coming to us. It’s a great opportunity because we could start introducing them to security and data products. Going interstate into Brisbane and Perth has also had a huge impact on the number and type of resellers.

Is there an opportunity for WhiteGold to acquire?

DW: I’ll be blunt and say we’re playing up the field, not down. I don’t see us looking at someone else to acquire; I think it’s more likely we would be acquired. One reason is because we are successful against the bigger guys and we’re a bit of an irritation to them. But secondly, it would have to be something very specific if we were to acquire, and there’s nothing at the moment we’re attracted to. We have a brand that’s trusted and we’re known, so we’ll spend our money developing internally.

In terms of being acquired, that could come down the track, but who knows. A lot of disties talk about looking at further acquisitions, so you know everyone has their eye on the market. Would it be one who’s local and wants to consolidate to get sole [vendor] relationships again, or would it be a distributor from somewhere else coming in and buying a presence? There have been a couple come over from Europe for example. But the long and short of it in distribution is you can get a contract with a vendor as long as you have a good business model.