Top UK IBM reseller posts bumper growth

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ChannelBiz UK talks with Portal CEO Shamus Kelly

Top IBM reseller Portal has released its financials for the year ending 31 March 2012, and they show excellent growth for the Bracknell based company. Portal’s sales were up 50 percent from £14 million to £21 million year on year and profits were up 28 percent, despite the tough time much of the world is having making money.

A couple of years ago, Portal was one of three companies that merged into one as a growth opportunity. Portal operates largely in the UK, mostly with corporate businesses to support their IT activity – with about 80 on the staff roster and 60 of those related to service provisions, Shamus Kelly, Portal’s CEO, told ChannelBiz UK.

Kelly revealed that Portal’s close relationship with IBM is a real factor for its success: following IBM’s buying spree and aggressive acquisition strategy over the years has paid off in terms of channel opportunities.

“Our ability to establish a positive way of working with IBM has to be one of those elements for the success over the last 3-4 years,” Kelly said. “The large vendors – they can change strategy at the drop of a hat. Being able to second guess your vendor, you have to invest a fair bit to get the operational things running properly.”

“We feel pretty pleased that it’s been IBM,” Kelly said. “There has been a lot of changes across other vendors”.

IBM, according to Kelly, is a good vendor to be a strategic partner with in the channel. He claims that it really recognises the need of its partners in their expertise of the software. Partly because of this, Kelly said, it has been quite lucrative. “As IBM continues its acquisitions,” he said, “the oportunity to be a provider that can link together all the elements and connect up in terms of products for, say, mid market, or smaller enterprise customers – IBM will not do that or get around to it, so it opens up a market opportunity to us”.

IBM’s acquisition strategy highlights the importance of resellers, according to Portal. “IBM may have a very good platform for social business but they’ll go off and acquire Cognos in the analytics space,” Kelly said. “And you’d think they’d be able to refine something for mid market customers – but actually we would be in a better position to be able to make those connections and to deliver from IBM’s portfolio. It really is a strategic opportunity for us.” Portal will stay on that track for the next three to five years, “for sure”.

In April this year, ChannelBiz UK talked to a number of IBM’s channel partners. http://www.channelbiz.co.uk/2012/04/24/ibm-accused-of-not-supporting-its-channel-partners/ Many of them thought there was a certain lack of support, and one was disinterested in the strong push towards the cloud – confirming businesses had a lot of pressure on them to take up the offerings. Another said that if IBM really cared about its partners, “IBM would have helped us when we needed a hand”.

Portal, which is performing very well with IBM, said that there is no extra leverage based around the volume of what you sell in IBM’s channel. “We would get exactly the same margins as the smallest reseller selling to a particular customer,” Kelly said, “size doesn’t matter in that respect.” But he does say it’s “almost our job to make sure we do get preferential treatment”.

Kelly explains that size doesn’t matter “given the relationship Portal can build with IBM.”

“Being able to get – when I say preferential, I mean being able to cover IBM more effectively in turns of defining effective offerings,” he said. “We would back ourselvse to have the best access to the right technical, even the right management contacts at IBM, that enable us to be slightly ahead of others.

“We don’t get extra leverage from the fact we are one of their larger resellers.”

What is valuable is access, and the ability to plan longer or mid term strategies with the company’s software components. This is valuable “strategically, rather than deal by deal”. Indeed, a senior business leader from IBM joined Portal at the start of this year.

Given the company’s insight, what then are some opportunities for growth with IBM? IBM’s strategic area in information management should prove lucrative. Big data. “We think for many of our customers they are faced with challenges,” Kelly said, “particularly with those that have to manage relationships with external customers.”

“There is a burgeoning growth of data and information available externally outside of business, that presents a challenge in gathering up and being able to respond to the market splace,” Kelly said.

How about expansion into Europe? Kelly said that Portal has always been in a neutral position, in that it intended to look for partnership. “We would continue to look for partnership in terms of European expansion,” he said. “What we have found in the last two or three years is that we have been able to demonstrate good growth here in the UK market, so it wasn’t that we thought about EU expansion and decided not to do it, it has always been there.”

“I do regularly talk to potential partners in Europe,” Kelly said. “But it is on the list”.


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