PXS Distribution has launched a new software download service and renewal programme offering revenue share for resellers. We talk to PXS’ UK sales director Robert Hall about the evolving security sector…
In today’s age of sophisticated computer malware, hacked passwords and nude celebrity photos, anti-virus security software is arguably more important than ever.
But the sector is evolving fast. Consumers are turning to digital downloads over boxed products; vendors are having to re-focus on providing a constantly updated service and annual renewals online.
This means it’s tougher for some retailers and resellers to take a slice of the pie. However, PXS Distribution has devised a solution it believes will make it easier for businesses to make money selling security software: a download service that also offers retailers a cut of the revenue from each renewal.
The firm, which has been operating in the UK for around 12 years now, is owned by First Technology Holdings – a private IT company based in South Africa. PXS has made huge strides in the security software market in that region, and hopes to replicate this success in the UK with its vendor partners including Bitdefender, Webroot, new signing Kaspersky Lab (featuring both a boxed and download offering) and more.
“We’ve really grown our UK market share over the past two years, but we didn’t deal with a lot of resellers in the UK. We focused more on the likes of PC World and Amazon and kind of bashed our heads against those walls for a while,” says PXS Distribution UK sales director Robert Hall.
“So about two years ago we really started to focus on the channel. And what we found from speaking to resellers is the biggest thing they wanted from us was a renewal revenue programme.
“BullGuard has a very good reseller base and does well within the channel, but there’s no reason we shouldn’t be doing the same if not more, considering we’ve got a product in Bitdefender that tests better than BullGuard.
“So we refocused on the channel and in doing so we developed the POSA (point of sale activation) card system with Tribeca.”
These cards can be printed for resellers on demand and PXS can track the licences supplied to each reseller. The cards can be bought by a customer in-store and activated when they get home, allowing them to download the security software. Resellers can log in and see all the licences they’ve allocated to their accounts and which are due for renewal.
When the consumer comes to purchase the renewal, the product links back to PXS’ site. The customer enters their licence, pays the fee, downloads or updates their software online, and PXS then pays the reseller 25 per cent of the renewal purchase price.
“The nice thing is this covers all our software products: BitDefender, Webroot, Avast, G Data, Intego and now Kaspersky Lab,” Hall explains.
“This gives the resellers the flexibility to offer their customers choice and still get the renewal revenue.
“We’re the only distie able to apply the licences in ESD format and with the renewal revenue in place. So it’s a very exciting position to be in.”
PXS is also partnering with dealer services group Brigantia to allow its members to access a reseller portal and order software on demand.
PXS dabbles in the consumer electronics sector too, with products such as iSaw action cameras and other accessories. It is also eyeing emerging categories like 3D printing and virtual reality, but is cautious of embracing too many, and says security software remains its ‘bread and butter’.
However, the firm is excited about future growth. “We’ve employed a few more people this year and there will probably be another five or six within the next year, but we don’t want to grow too quickly,” says Hall.
“We are now going to get some serious investment so we’ll be able to go after a lot of big vendors we may have been too small for in the past.
“But where we will have success with new signings like Kaspersky is on the ESD side, as that’s where the renewal programme comes in.
“We’re now in the market alongside four very big distribution businesses in the UK, and for us it’s exciting to be in that space.”
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