Cloud helps Logicalis adapt to ‘challenging’ UK market

The cloud is really important to Logicalis’ continued growth as it faces a “slow” UK market, chief executive Ian Cook told ChannelBiz today.

His comments came on the heels of parent company Datatec’s statement on Thursday that it expects to report revenues of $5 billion (£3.17 billion) for the full year to February, in line with previous guidance, amidst “challenging” conditions in the UK.

‘Signs of recovery’

South Africa-based Datatec, which owns distributor Westcon and integrator Logicalis, said that while it showed “exceptional” performance in South America, and saw “signs of recovery” emerging in the US, conditions in the UK remained “very weak”.

Cook acknowledged that the UK market is “tough going” but said the company’s efforts to adapt, in particular through focusing on services, have been paying off.

“There are encouraging signs, but that comes largely from the way we are adapting,” Cook told ChannelBiz. “In these conditions there is little point in focusing on the commodity end of the market. We need to become more relevant to the end user, and that is what we are doing with our services.”

He said Logicalis’ budget is “showing growth” for next year, particularly at the higher end of business and technology services, as customers increasingly respond to cloud-based offerings.

Cloud services are “getting through the capex embargoes that many companies seem to be having, especially in the US and the UK”, Cook said.

“That’s the future anyway, but the UK economic climate has accelerated that process,” Cook said.

Cloud push

As part of its cloud push, for instance, Logicalis this week obtained Cisco’s Identity Services Engine (ISE) Authorised Technology Partner badge, allowing it to sell, deploy and support Cisco’s ISE access control platform. This is intended as a building block toward supporting the growing use of personal smartphones and tablets on corporate networks.

Such efforts have helped Logicalis toward “healthy growth” in spite of the prevailing economic conditions, Cook argued. The company’s growing operations in Asia-Pacific and Latin America are also helping offset the UK’s sluggishness, he said.

“In Argentina we did very well, and in Brazil we did exceptionally well,” he said. “In Singapore they put a different business model together to double the size of the business in revenue terms and they have almost done it this year. The UK is a large and important part of our business but we are not dependent on it.”

Cook said the UK isn’t faring any worse than the rest of Europe, and may even be in a somewhat better position.

“It isn’t just the IT market, the general economic conditions are weak,” he said. “Things have slowed down, projects have been put on hold. There is a move to different consumption models. But the UK isn’t any different from the rest of Europe, and may be even doing slightly better. In my personal opinion we are seeing the green shoots of recovery, but we need to do more to stimulate it and free up the entrepreneurial spirit.”