Exclusive Group Delivers VAST Results

Continued focus on value, specialism and reach sees revenues double every two years.

LONDON, UK – February 17th, 2016 – Exclusive Group, the value-added services and technologies (VAST) group, today announced underlying organic growth of 31% and total proforma annualised revenues of 1.04bn€ for 2015. The results prove the success of its value-centric approach, relentless focus on cybersecurity and datacentre transformation opportunities, and astute acquisition strategy. The performance underlines the Group’s momentum to grow beyond 1bn€ annual revenues; a target achieved nearly two years ahead of plan.

“We have now entered unchartered territory as the very first ‘Super VAD’ business to retain and extend its value-added model on a global basis,” said Olivier Breittmayer, CEO of Exclusive Group. “Since the start of this journey we have doubled revenue every two years with a strategy blending together accelerated organic growth with hand picked acquisitions that have supported our value and local knowledge qualities to deliver a unique proposition. And people seem to like it!”

Adjusted to remove the added 2015 turnover of Transition Systems – the pan-Asian cybersecurity VAD acquired in December 2015 – Exclusive Group’s core business divisions returned revenues of 840m€, up nearly 200m€ on the previous year’s results.

• Datacentre transformation VAD BigTec grew revenues by 90% to over 70m€ and now operates in over 12 countries worldwide with plans to expand further across the Exclusive global footprint in 2016.
• ITEC Exclusive Global Services has proved enormously successful attracting major global deals and adding significant value to Exclusive Networks resellers and vendors in particular.
• Financing and leasing division Exclusive Capital has expanded into the UK, Belgium, Luxembourg and France, with plans to open operations in 4-6 additional territories in 2016.

“The strategy is to preserve our unique approach, continue to support the entrepreneurial style of our great people, invest in new services, and pursue acquisition opportunities that extend our global footprint, specialist focus, and disruptive approach,” added Breittmayer. “These are the fundamentals of our 20:20 vision, or what we call L’Esprit Exclusive, which we feel is unique and at the heart of aiming to continue doubling performance up to the year 2020!”

Some regional highlights:

• Strong performance throughout the Nordics & Baltics saw the region post revenue growth of over 40%.
• France and Africa demonstrated healthy returns, growing 33% and 63% respectively.
• In the Southern Region (Iberia, Italy, Turkey), collective growth of 41% underlined the strength of the business despite slow economic recovery and other challenging factors.
• The UK continues to report healthy trading and solid sales momentum with over 55% annual growth.
• The DACH region has a consolidated growth of over 26%, while the Middle East maintained its trajectory with YoY growth of over 28%.

Channel-Centric Exclusive Capital UK Opens for Business

Expansion of specialist Exclusive Group division brings financing and leasing service opportunities to UK reseller partners for the first time

LONDON, UK – February 9th 2016 – Exclusive Capital, the financing and leasing division of Exclusive Group, has extended its geographic reach into one of Europe’s largest B2B technology markets, offering UK partners access to new services that close deals faster and enable partners to win bigger projects. The new operation is led by UK IT financing veteran Chris Armitage and will work closely with the Exclusive Networks UK and BigTec UK VADs.

“Chris is already making a big impact with his 25+ years of UK channel experience and an intimate knowledge of how the whole IT supply chain works from a financing perspective,” said Franck Laga, managing director of Exclusive Capital. “The UK is important for us, with a reseller base that is very receptive to the opportunities presented by a fast, flexible financing provider specialising in IT. 2016 will be a pivotal year in the life of Exclusive Capital as we invest in widespread expansion into the major European markets and beyond.”

Until now only operating in France, Belgium and Luxembourg, the addition of the UK significantly increases Exclusive Capital’s reach, with the bulk of its local forecast revenue expected to come from Exclusive Networks UK and BigTec UK resellers.

“We believe there is a huge appetite for IT asset financing, and this is borne out by the pipeline Chris has drawn around our partners within a very short time,” said Graham Jones, country manager at Exclusive Networks UK. “These services speed up deal decisions, and get around all of the financial objections that partners hear from their customers. Partners that are engaging now can see the potential to increase deal sizes and longer term tie-ins, with the added bonus of receiving full payment of the deal value within days.”

Greed – The Biggest Cyber Vulnerability of All!

Sadly, greed has become the one of the biggest cyber weaknesses of our time as more and more many ways of exploiting this basic human trait emerge. Even sadder, there is no easy ‘second Tuesday’ patch to block this in-built vulnerability.

Greed provided the backdrop to one of last year’s biggest and most intriguing cyber heists, where personal data was used, not as ‘dark web’ currency between hackers or to syphon money from unwitting individuals, but to exploit human beings’ overwhelming appetite for avarice. To explore this subject a bit further, let’s take a step back.

Credit card details are a classic example of a black-market commodity that people overestimate the value of. Some credit cards have limits of £50,000 or more, but this doesn’t translate to hard cash. More likely to be used as a kind of currency between cybercriminals, as well as to perpetrate new cybercrime (much as stolen cars are typically the ideal choice for a getaway vehicle), the outlet for stolen credit cards isn’t simply “go buy stuff without paying for it.” In any case, CC companies are getting really good at spotting odd 1€ transactions and freezing the card (really frustrating when the trade was real), goods are shipped to addresses that merchants can trace, and geo-sensitive behaviours are tracked to the nearest 10km or so, ensuring further safety.

Far more valuable are the email addresses of ‘middle class’ individuals. Or at least they are, if you know what to do with them.

The aspiring middle classes are emerging as the best kind of cybercriminal target if you don’t just blow it by trying to steal their money directly. They have a certain amount of disposable income and ‘net worth’, and as a global class they are growing.

According to the US Government Bureau of Justice Statistics, people in households with an annual income of $75,000 or more suffer a higher prevalence of identity theft than any other income bracket. And with cybercriminals having to become even more creative at exploiting data they extract from nearly every household (46% of American have either been a victim or know someone who has) novel approaches have been developed to turn this data into hard currency.

They use one of the oldest scams in the equities market to pump up a stock price, dump it at its peak and rub their hands with glee. As the stock price plummets or returns to normal levels, innocent investors are left wondering what the hell just happened. What’s even more appealing about this exploit is the sense of shame and guilt felt by the victims, making them slow to react and reluctant to inform the authorities.

These scams are infamously known as Pump and Dump (P&D) schemes. The scam draws its power from a single human characteristic: greed. While traditional middle America, increasing numbers of affluent Asians – and equally eager Europeans – are duped by a trusted source (compromised by identity theft) into following or buying a stock that is tipped for upward movement, the perpetrators may only be looking for a 10% gain before bailing out, or they may only be addressing a small portion of their stolen credentials at a time so as not to draw attention. Funny really, that cybercriminals avoid the temptation of being too greedy in order to evade detection and maximise their profits!

The sting here though is that the cybercriminals hold tens of millions of records; records that have been extracted over many years. Think about it: so many companies have had their defences breached and data stolen – often over scandalously long timeframes before finding out – and yet few suspicious activities have emerged. Isn’t that suspicious in itself?

Most modern P&D scams have relied upon a very crude spamming approach that sends junk to millions of random email records so that the <0.1% who act on the information generate enough critical mass to impact the stock price.

In the recent case of JPMorgan and several other leading US financial institutions and brokerages, this was made significantly more lucrative because the honest stock-speculators concerned were so well targeted and by highly reputable, trusted sources.

This audacious infiltration of trust raises two further questions:

Who is the victim? It’s not simple to address, even though it’s clear that the data has been stolen from a finance house, and that their reputation would have been damaged. But no money was stolen and it’s hard to put a solid value of the theft, even though last year’s discovery estimated the total scam netted the gang more than $100m over a number of years. Meanwhile, the unwitting or amateur stock speculator has been duped, but again none of his/her passwords or account data has been compromised. No money has been stolen; indeed some of the ‘victims’ may even have managed to profit from the scam as they saw the prices rise in the time following their trade. Eventually they’d all lose – unless they got out in time – but then that’s the risk of the stock market, right?

What’s worth more, everyday data about ‘valuable’ people or valuable financial data about everyday people? In this case, I’d suggest the former.

These new P&D scams – and others like them – demonstrate the innovation of cybercriminals and the need for businesses and their trusted IT advisors to think laterally and in non-obvious ways. It should help channel partners introduce new security concepts like modern malware, APTs and behavioural analysis tools – they look for odd behaviours like executable programmes not executing, or unusual trends – and this helps VARs have far more interesting and strategic conversations with their customers that ultimately lead to greater value.

These scams also reveals that – as people – we are our own worst enemy, especially now that the science of cybercrime is staying one step ahead in capitalising on our human weaknesses.

P&D scams show that greed is a very powerful force that cybercriminals are committed to exploiting, and they also highlight the amount of vigilance and investment organisations need to employ to prevent and mitigate them.

As Gordon Gecko famously said, “Greed is Good.” Well that rather depends on whose greed it is…

Learn the Laws of SaaSonomics

The economics of IT consumption is evolving and it will impact the IT supply chain as we know it. This is the era of SaaSonomics and resellers that don’t think about adapting their businesses for this disruption risk becoming the Kodaks or HMVs of the IT channel. Look at the facts and it’s obvious that today’s technology market will not get you from here to eternity.

Consumer IT typically offers complete transparency of price, limited contractual tie-ins and instant fulfilment. By contrast, enterprise IT providers are still the complete opposite of this, despite Forrester and other research houses predicting global SaaS revenues will hit $87bn by the end of 2015; more than doubling the figure for 2012. Even stronger growth on the back of more flexible IT provision is inevitable.

Meanwhile, disruptive new services-based business models are undoubtedly emerging as an alternative to the traditional capital expenditure approach. According to Ovum, over 80% of enterprises globally will be using Infrastructure as a Service (IaaS) by 2016. That’s a significant change over a short period. By the same year, IDC predicts there will be an 11% shift of IT budget away from traditional in-house delivery, toward various versions of cloud computing as a new delivery model. 11% of the global market is $385bn!

And finally, analysts are projecting a fall in enterprise demand for solutions that fail to deliver the benefits of virtualised, cloud-driven and software defined technology. According to a ComputerWorld survey, 52% of organisations over 1,000 employees have increased spending on cloud computing this year. The only standout decrease planned was on hardware, with 24% agreeing they would cut budget in this area.

It is clear that the entire IT channel needs to transform in order to prosper. Disruptive approaches are needed. Buyers are changing how they evaluate and deploy technology, and are considering purchasing it on an OPEX rather than a CAPEX basis. Soon customers will be asking you a monthly or quarterly price for 1,000 VM’s (and I ain’t talking ‘voice mails’).

But whilst the facts and mega trends illustrate this, many resellers are ignoring these indicators and failing to prepare for the impact that reduced or delayed cash flows will have on their business. They are not skilling up for the big change to cloud based consumption, are in denial over the impact on sales plans and commissions, and burying their heads in the sand over the displacement of revenues from one-off lump sums to regular annuities.

No one really knows where the rest of the IT channel will be by the end of the SaaSonomics decade, but the story is not all doom and gloom. Most resellers are in the same shape so now is the time to act.

If you aren’t already planning a business transformation project around SaaSonomics, you need to start now. If you aren’t building out lower cost sales models, you need to begin that modelling immediately. And if you aren’t working internally with your FD/CFO to gradually change financial structures, you have to distract her attention away from the abacus today.

The last time I bought a car, it wasn’t really the colour or performance or consumption figures that caught my eye – it was the sales guy’s approach about how quickly and cheaply per month he could get me into that car, with a promise to upgrade me before the end of the term to a better model for a smaller monthly fee. That’s the thinking our channel needs to embrace.

One of the ways to enable this is to get serious about services, and payment models delivered by IT asset financing and leasing. We may not be there yet in terms of a global offering, but facing the reality and embracing the change is half the battle. Sit on your hands and market disruption will disrupt you out of existence. Take up the challenge and prepare your way from here to annuity.