Think global. Act local.
- 09 September, 2016 06:21
Dominic Whitehand - Managing Director, Exclusive Networks
Since each laying $1,500 on the table to start a business, Dominic Whitehand, Sharon Whitehand and Jonathan Odria lived off a simple motto.
“If we didn’t sell, we didn’t eat,” recalled Whitehand, having started WhiteGold Solutions in November 2002.
With a combined purse of $4,500 providing only a domain, website and basic starting out costs, over a decade later the local distributor caught the attention of a global player, triggering its acquisition by Exclusive Group in August 2014.
Not one for reminiscing on channel history however, Whitehand said the starting out culture created 14 years ago still rings true today, despite bigger headcount, increasing revenues, new vendors and a different logo.
“We never borrowed a cent and never wanted to lose that corporate culture,” he said. “We’re still hungry to this day and to succeed, you simply have to be.
“Some distributors have no more than 20 staff, they earn reasonable money but they don’t want to cross the chasm and make the gamble,” he said.
“The lifestyle concept takes an awful lot of self belief, financial sacrifice and risks. Usually it means you grow in your home state then open a service office in a second, but then you wonder, do I really want to go through that all again on an even bigger level?”
In leaving behind its lifestyle business, Whitehand and his team took the gamble, sitting upon a new ledge of profitability as the organisation scaled new heights.
Now nestled comfortably in its sweet spot - focusing on cyber security, networking and infrastructure technologies - the distributor is applying a local touch to global ambitions, blending the benefits of homegrown philosophies with worldwide capabilities.
Whitehand said the distributor sits primarily within the mid-market space, allowing for quick upscaling to enterprise, or slight manoeuvres into small business territories.
“We’re in a strong position because there’s nobody around us,” he added. “Many of the larger distributors pour their energy into the enterprise space which is more competitive, and will then look to move down into the lower markers to seek greater margin, which is their bread and butter.
“But it’s much harder to move down than to move up.”
With Exclusive Networks leveraging the middle ground, Whitehand said the company has transitioned into the enterprise space, honing its strategy through a more committed approach.
“Through our vendors we are winning more enterprise deals,” he said. “By the end of May we had more million dollar plus deals than we have ever had before, which shows our strategy is working.
“When you’re used to having more transaction from the volume business of the SMB and corporate space, you can build a far and wide-reaching reputation. Plus some of the vendors will grow into the enterprise space themselves so they will take us with them.”
For Whitehand, “fundamental to” Exclusive Networks is the notion of value-add, reflecting the personal ambitions of the three 10 percent stakeholders.
“It’s why we started the business in the first place,” he said. “We’d worked for distributors, integrators, resellers and vendors so we leveraged our strong understanding of the channel.
“Everyone talked about ‘value-add’, even ten years before we started out, but then it was forgotten.
“When buying from distributors we didn’t receive the value-add we thought we should be getting so that played a factor in our thinking, and still motivates us to this day.”
Through representing Barracuda Networks, Cisco Meraki, FireEye, Fortinet, Kaspersky, Sophos and WatchGuard - among others - Exclusive Networks also services the smaller end of the channel, offering white-label services specifically for those starting out in the market.
“We can white-label our services on behalf of the partner and act as them if need be for installations, configurations or professional services,” he explained. “We’re an accredited training centre for a number of our vendors as well.
“We also provide full return merchandise authorisation (RMA) and hardware maintenance services for four of our vendors, so there is a raft of options available for us to provide to the channel.”
Finding a sweet spot amidst a consolidating market, Exclusive Networks is creating stability in an industry that is consolidating across all divisions, impacting vendors, distributors and partners.
Since the turn of the year, the distribution landscape has altered through Arrow Electronics acquiring Distribution Central, Ingram Micro taking control of Connector Systems, before then falling under Chinese rule as the big players make strong moves to gain local ground.
On the vendor side, Dell continues to edge closer to EMC, with Microsoft swallowing up LinkedIn, Oracle buying NetSuite as Cisco, IBM and Intel also acquire for fun.
Closer to home, Telstra has snapped up streams of local technology providers in Kloud, Readify and MSC Mobility, while Deloitte bought Sixtree and Vocus Communications scaled the final hurdle towards merging with M2 Group.
Amidst such market shakeups, both locally and globally, Whitehand highlighted the increased collaboration across the channel as a key driver in the heightened urgency around M&A activity.
“It’s certainly behind a lot of the consolidation,” he observed. “Telstra in particular has made many acquisitions in specialised areas but from an Exclusive Networks point of view, it certainly takes time to acquire those skill sets.
“Given we play in a very specialist security market, in-depth knowledge is key and it’s understandable that the larger organisations would prefer to just acquire.”
At the top level of distribution, the proposed $US6 billion acquisition of Ingram Micro by Tianjin Tianhai continues to impact the channel, as the smaller players watch the biggest giant of them all fall under different ownership.
“Ingram Micro was a huge shock,” Whitehand admitted. “That was the point when everyone wondered which of the smaller distributors was next going to be acquired by one of the globals, and then one of the globals gets acquired.
“It just shows the increased level of activity at the moment.”
Secret to success
Having already been acquired by a global, Whitehand has strived to ensure the Australian-feel of the business was not devoured into head office, instilling a culture - or perhaps maintaining - befitting of an up and coming distributor.
“We always had plans to either sell or have some sort of an exit strategy but regardless of that, we never wanted to change our corporate culture,” he said. “We didn’t sell 100 percent and we weren’t swallowed up by s global player which would have changed our culture.
“We’ve kept all of our staff and we’re still growing now in the same fashion.”
While there’s no padlocked box of secrets stashed up Whitehand’s desk, the company’s financial results demonstrated why an Australian-born distributor would catch the attention of an organisation based 17,000km away in France.
Through more than doubling its net profit in the year before Exclusive Group acquired 70 percent of the company, the distributor reported $1.85 million of net profit for the year ending June 30, 2014, up 153 percent from the preview year’s figures of $728,748.
Fast forward to the present day and the company continues to grow, adding new vendors as it prepares to launch a revamped datacentre practice.
But what’s the secret?
“Everybody always asks us that,” Whitehand said. “They’ve always keen to how we survived and how we succeed locally without any funding.
“I think you just have to commit, believe in yourself and understand the level of sacrifice that you will go through during the early years.”
Looking ahead, Whitehand said the distributor will continue to hone its skill across the expanding security and datacentre markets, taking advantage of new technologies and customer buying patterns.
“We’re seeing the datacentre market explode and we’re focusing heavily on this space,” he said. “Our key priority is to facilitate the datacentre and hyper-converged space, but there’s a need to make sense of all the white noise in the market.
“We’re moving our customers to software-defined datacentres, and wrapped within that is our security play.”
But as Whitehand explained, go to market strategies still need to be clearly defined for partners, and vendors, to make inroads in Australia.
“It’s going to happen piece by piece,” he said. “We’re creating a business model to address this and make sense of the market, putting in place a reference architecture to put something tangible on the table for the channel.”
In terms of adding to its ranks, Whitehand said the distributor is “turning away over 30 vendors” per month, but remains active in recruiting new technologies and capabilities.
“The door is always open for vendors but they have to fit,” he added. “We’ve had this approach from the start but back then, we knew the market but weren’t big enough to attract the larger vendors.”
Through aligning with emerging vendors such as Fortinet and Barracuda - now household names within the Australian channel - Exclusive Networks has forged an enviable reputation for spotting tech talent.
“We’re regularly visiting Silicon Valley and making calls,” added Whitehand, maintaining the motivation and ambition for future growth.
“I understand some businesses reach a point when everyone is happy and being paid so there’s little desire to risk all that. But we’re always looking ahead.”
On the surface, the WhiteGold of old remains, but with the prowess of a global giant now alongside, Exclusive Networks is taking local thinking to the next level.
This article originally appeared in the August issue of ARN magazine - to subscribe, please click here