Technology Reseller took advantage of the launch of Exclusive On Demand (see box) to catch up with Exclusive Networks CEO Jesper Trolle, who took over the reins from founder Olivier Breittmayer in September. Trolle was previously President of the Americas for ECS Arrow Electronics, a position he took up in 2017, having joined Arrow in 2005. We started out by asking Trolle where he thought there were opportunities to grow the business.
Jesper Trolle (JT): Exclusive Networks is very well run and has good fundamentals, but I think we can accelerate both inorganic and organic growth opportunities.
By inorganic I mean acquisitions – the company has been fairly acquisitive but there are still areas where we can go faster and there are markets where we are underpenetrated.
For me, the organic opportunity lies in making sure we work with our key strategic vendors across our markets – that’s an area in which I think we can go faster – and in launching things that are a little outside our core.
The business has grown up on cyber security and we are now focused on what we call ‘trusted digital infrastructure’, including some of the next generational infrastructure companies like Nutanix, Rubrik, Pure Storage. I think there is an opportunity to get closer to those types of vendor and grow with them.
Technology Reseller (TR): So acquisitions will not just be to expand geographic coverage…
JT: No. There are a couple of things when you look at acquisitions. There is obviously geographic coverage. By the way, I think Exclusive Networks already has that to a large extent – and when I say coverage I mean people on the ground, native-speaking, understanding the culture, the networks and all the unwritten rules. A lot of distributors say they have global coverage, but that doesn’t mean they have people on the ground. For me, that’s a key differentiator. Geographically, there are markets where we do not yet operate and where we would like to be.
Then, you have markets where we feel we could be stronger and bigger, and where there might be a player that would be a good opportunity for us.
You also have to look at it from a portfolio perspective. There might be opportunities out there for companies that are in the same space as us, that have some of the same vendors and portfolio focus areas that we think would fit well with our culture that could be worth looking at.
The last piece is targeted acquisitions, where we need a certain capability, maybe in a particular technology area or a part of the value chain, and focus on companies that have a capability that we don’t have enough of.
TR:When you expand geographically is it just for financial reasons – to increase turnover – or are there advantages in having a global footprint?
JT: There are huge advantages and I think Exclusive Networks does really well in striking the right balance between being a global company and having a local, decentralised empowerment structure and autonomy.
From a vendor perspective, it is more critical to work with global players because they like to work with one company – one company’s credits, one company’s contracts, one company’s terms. It also gives vendors the opportunity to drive things more consistently, because a vendor has the same strategies and priorities wherever in the world it operates. So, there is a benefit for vendors in working with one distributor in multiple countries.
At the same time, they often don’t do that because they fear giving up local closeness to the market. Exclusive really strikes the balance between having that local closeness to the market, with the people and the way we operate, and making sure we have some kind of a group strategy that allows a vendor to look at us as one company. We don’t want to sacrifice that because it is a key part of our differentiation in the marketplace.
It is less of an advantage for partners downstream, I would say, because not a lot of them operate globally. You have a couple that are more international in nature – WWT, Insight, Computacenter, which is big in Europe and now starting to make inroads in the US with its recent acquisitions. But, in general, you don’t find one that covers the world, so a lot of the value in that is for the vendors. That said, it does give partners the opportunity to work with one distributor on things like global deployment projects for end users.
TR:When you acquire a company, do you maintain its old branding or move it over to Exclusive’s?
JT: It varies. In most cases we will move over to Exclusive because that’s what gives you the benefit of being part of the same company. If you trade under 20 different brand names, you spend the first 20 minutes of every meeting explaining that all the companies are actually part of the same group. I have been in that situation before and I have learnt that lesson.
It is a difficult one – I understand why you asked the question. On the one hand, it is an emotional thing; you buy the company; there is a founder; there are people who spend a lot of time talking about why they are different. So, the brand name is important. But the acquirer is adding a lot of value to that business through its relationships, its strategies, its reputation, and if you don’t change the name, you lose some of that value creation for the acquired company.
TR:At the launch of X-OD, you mentioned reaching for some aggressive milestones. What did you have in mind?
JT: Well, I was saying that as a company, we reach aggressively for bigger and bigger milestones. I don’t have a milestone set out yet, but that will come. Just look at the past: this company has grown at a CAGR of about 17%; this year we are going to be about $3 billion; internally, we say we have had something like 2,100% growth since the inception of Exclusive. That’s aggressive. We have doubled revenue every 2 or 3 years.
TR:That is the benefit of acquisitions.
JT: Of course it is. And it comes full circle, because it is a benefit when making acquisitions too. But to really make acquisitions work, you have to make them part of the culture, part of the company. That’s ultimately where you can help accelerate some of these local businesses that you acquire.
TR:What was it about your experience professionally that attracted Exclusive Networks?
JT: There are a couple of things. First of all, I have been in this business for 20 years. I have a pretty unique understanding of how countries work, how regions work, how different parts of the world work. I have lived and worked in Germany; I have lived and worked in France; I have lived and worked in Denmark; I have lived and worked in the US. So, I understand how business is done and how people think in each of these markets.
That’s one. Two, I am coming out of a business that is four times bigger than Exclusive is today.
There is a lot I have seen in the past that works really well and there is a lot I have seen in the past that doesn’t work well. The benefit in me having seen the movie before, to use that expression, is that it gives us a chance to go faster and to avoid some of the pitfalls that I have seen in other businesses. I think that was something they liked.
As this company becomes bigger and bigger, we have to mature certain things in the company and make sure that it operates as well and as efficiently and as autonomously as it did when it was a smaller company. I bring that experience.
Everything as a service
Exclusive Networks launches new delivery platform to accelerate transition to subscription model
Exclusive Networks, the specialist distributor for cybersecurity and cloud solutions, is taking the as-a-service model to the next level with the launch of X-OD, its new ‘digital face’ and online distribution channel for its cybersecurity and infrastructure products and services.
Standing for Exclusive Networks On-Demand, X-OD is designed to ease the transition to ‘everything-as-a-service’ by transforming CAPEX to OPEX payments and enabling resellers to buy and sell all technology assets – hardware, software, services, on-prem and in the cloud – on a subscription.
The platform allows multiple products and services to be delivered within a single subscription – and not just those offered by Exclusive Networks. As Julien Antoine, EVP Strategy & Operations at Exclusive Networks, explains, it also gives resellers the flexibility to add in their own services, as well as those from vendors not distributed by Exclusive.
“We designed the platform not for ourselves but for the channel. We give it away free of charge to resellers in a white label way, so they can fully customise it with their logos and their terms and conditions. They can run it with full autonomy to offer their own vendors and their own services. It is really a tool for them to fast forward their evolution into subscription at no cost,” he said.
X-OD currently includes solutions from Palo Alto Networks, Proofpoint and Google Cloud’s Chronicle, but the intention is to offer the distributor’s entire portfolio on the platform and to make it available globally to meet growing demand for ‘everything as a service’, starting with the UK, Netherlands, France, Belgium, Spain, Germany, Finland, Ireland and Austria in 2020 and other regions in 2021.
“Right now, subscriptions make up about 15-20% of our business and we can easily see this growing to plus 50% in the next couple of years,” explained Exclusive Networks CEO Jesper Trolle.
X-OD is being introduced to meet increased demand for subscription-based IT consumption and a growing desire to procure defined business outcomes from technology rather than having to self-build and manage complex infrastructure and services.
Antoine uses a car analogy to explain how X-OD simplifies procurement at a time when vendors and resellers are moving to a subscription model at different speeds.
“Today, you can consume your cyber security as hardware, software and subscription,” he said. “Imagine if cybersecurity were a car. It would be like owning a CAPEX engine, leasing a tire and getting the rest of the car on a subscription. It doesn’t make any sense.”
X-OD makes it easier and faster for resellers to make the transition to selling ‘as a service’, by converting all the varied procurement options offered by vendors into a single subscription and by making sure resellers don’t have to pay upfront for a three-year licence that the end user will be paying for on a subscription.
As an end-to-end platform, X-OD doesn’t just convert almost anything into a subscription; it digitises the whole value chain, with automated ordering and fulfilment, one place for managing all subscriptions, an end user portal for customers, the ability for resellers to develop their own solutions/bundles and, coming soon, automated paperless billing, customised reporting and insight into up-sell and cross-sell opportunities.
Ultimately, X-OD removes complexity both for resellers and vendors as they evolve to meet changing customer requirements.
“Resellers are trying to address the complexity that vendors are creating through evolution. We solve this complexity for them. We bring simplicity and we empower them to buy like they sell. Today, they need to buy CAPEX and convert it into OPEX. We do it for them; we take the risk away,” explained Antoine.
“Meanwhile, vendors are transitioning to full subscription. This could take them a couple of years, but we can transform their SKUs into subscription now, as we are doing with Palo Alto, Proofpoint, Chronicle. That’s the beauty of this model. They don’t have to change anything on their side; we do the transformation and we bring it to market, speeding up the sales cycle for them and creating value.”