Technology Reseller - v31

Q&A technologyreseller.co.uk 45 sure this is the way to go?’. But because we were specialists in networks and voice and didn’t do what partners were doing – i.e. supply hardware – we added real value to their structure. Partners knew we weren’t going to approach their customers to sell hardware, which meant they could keep their margins quite high. It was a good fit. That was probably in our third year. I redid the documentation and wrote all the SLAs, which we would give to partners in a white-label document. They would rebadge that and sell it on and make some margin. We’ve never really looked back from that point. TR : Do you have any end user customers now? TM: We do. It’s probably about 5% of our base and is not something we actively go out to win. Sometimes direct relationships come through word of mouth or because we know the owners of a company and sometimes they come to us because a partner has gone into administration and we’ve taken over a customer relationship. We also find that some bigger companies like to deal directly with us. For example, we look after Betfred’s voice platform across its whole network – 2,500 people and 1,700 shops. That business was won by a partner, but Betfred wanted to contract direct with us. We contract direct and pay the partner a commission. TR : The transition from selling to end users to focusing on the channel was one light bulb moment in Vapour Cloud’s journey. Have there been any other moments that have transformed the business over the last 7 years? TM: Not particularly. We have the You then have to overlay a fantastic layer of customer service on top. Our industry is renowned for having really poor service levels. We wanted to change that by offering great customer service at a good price – not necessarily the cheapest price – but a good price. That has stood us in good stead over the years. So, the three core services that were there from day one are the core services we deliver today. We don’t step outside that function: we don’t build hardware; we don’t do software licensing; we don’t do Microsoft services. We work with partners that can do that. People come to us for those three things and video, making it four; they don’t come to us for Microsoft partnerships; they don’t come to us for hardware services or for software services. TR : Are you going to stick with those four areas or are you going to bolt on others? TM: There will be changes – technology like SD-WANs – but they are still part of the network, and video is becoming more of a play with people working from home. So, never say never; if we feel an application or service has some merits, we will have a look at it. But we will only take on something we can actually support. That’s important to us. People come to us because we see an application from end to end. If you pick up your handset, we can see the voice platform, we can see the traffic, we can see the infrastructure, we can see the network, we can see where the faults are and we can fix those internally. Unless we can do that, we won’t take on a piece of technology. TR : As I understand it, you provide your services to the channel community rather than end users. Has your customer base always consisted of channel partners and resellers? TM: Originally, we considered any business from anywhere. One of our early customers was a big Cisco partner that built everything inside a LAN environment – security, firewalls, switches, routing, that kind of stuff. They kept asking us to build networks for them; we built the network and then overlaid their services on the LAN. We had done quite a bit of work with them when I realised that if we flipped our model, instead of trying to get 500 separate customers we could get one partner who had 500 customers of their own. So that is what we did. We made less money, but we had a recurring revenue stream from partners’ customers. It was a challenge at the beginning because revenues were smaller and the private equity guys were saying ‘Are you reputation of doing what we do and doing it really well – of being very, very good at what we do in back-up storage, voice and technical networks and services. It is very, very difficult, I believe, to be a jack of all trades, which is what a lot of people used to be – ‘We do networks, we do voice, we do software, we do Microsoft, we do IT support’. Nowadays, people are looking for specialists; they want to work with people like us that have that experience and specific expertise. We decided really early on that we would be a specialist. It wasn’t a lightbulb moment, but we saw earlier than some that in the future people would want to work with someone that had that specialist engine around them, that weren’t trying to be all things to all men. TR : It couldn’t have been cheap building your network. TM: No it wasn’t. Over the years, we’ve had about £4 million of funding and we’ve spent more than £2 million of that on the network. It is the most expensive part of our business; you have to sustain it, support it, maintain it, you have to have people that can look after it. TR : As you said earlier, having a network gives you control. This must be a great advantage in addressing the array of challenges businesses face today. TM: Building a network allows us to deliver encrypted and secure comms and network services, especially voice. Normally, what would happen is somebody would deliver the voice network and someone else would deliver the network, because voice people don’t know networks and network people don’t know voice. You have anomalies, of Continued... Insurance brokers Erskine Murray has invested in a multi-site cloud telephony system powered by Vapour Cloud - see page 47.