It’s been half a year since experienced channel executive Dave Stevinson took the reins at Entatech, and during that time he’s made several changes to the distributor’s business, from its values to infrastructure and services, including a new white label cloud offering. PCR asks Enta’s new MD how it’s gone and what other developments are on the horizon…
What kind of changes have you made to Entatech so far?
There are two changes we’ve made at the top level – one around the culture and the values, with more of a focus on the customer, and secondly, the big one is around infrastructure in terms of systems. We’ve put in a new ERP system, a new analytics platform and a new CRM system.
What’s your vision for Entatech UK going forwards?
We want to be a credible alternative to the big four – Exertis, Ingram Micro, Westcoast and Tech Data – in the eyes of the customers and the vendors.
How will we do this? It will be around the values – we want to have integrity with much more open and honest communication, service – making staff more accountable for their actions, and quality of process.
We want to have a more efficient and cost-effective operation. Fundamentally, one of our mantras is to be easy to do business with. By doing that, we’re empowering and training staff, and have simple processes that are effective, with the right level of technology.
Tell us about your vendor mix nowadays – have you made any key changes to your portfolio and your strategy around the product categories you supply?
There have been a few changes. We want to work with the vendors who focus on us and the ones we can focus on; we want to look at where we can compete and where we can serve our customers.
Certain vendors probably don’t fit into our strategic direction, and there are others we don’t work with who do fit in with our strategic direction. There’s always fine-tuning to have the right vendor mix. We’ve moved some of our staff around to focus on vendor acquisition and we’re looking at areas with future profitability for our customer base. We’re not really making changes to top-level categories, it’s just about getting the vendor mix right. We’re core to our heritage.
How are you streamlining Enta’s business? Are you restructuring or reshuffling it in any way?
Yeah, we’re going through a transformation program, it’s more about focus. We’re aligning our resources behind the appropriate vendors. We want to be the strongest partner viewed through the eyes of our customer.
“One of our mantras is to be easy to do business with. By doing that, we’re empowering and training staff, and have simple processes that are effective.”
Have you had many staff leave Enta since the change in strategy?
Not that I’m aware of. There have been some replacements we recruited. Some staff come and go, but there’s no massive changes here. In terms of recruitment, you need to find the people that will help take the company where we want it to go. There are two issues – like I said earlier on, the values and the big change in the infrastructure in our systems that was required, but we also need to get the colleagues who follow our vision, our mission and our values explicitly.
Cloud services are increasing in prominence. What is Enta doing in this growing area?
Yeah, like everybody, we’ve got a cloud offering. It’s currently very poor and we’re looking to make it better. We estimate in Q1/Q2 2016 we will launch our Enta Cloud, which will enable the IT resellers to have a white label cloud offering, powered by Enta Cloud (www.entacloud.co.uk).
Of course it’s important to the future of the company to have a cloud offering, so it’s something we’ve had from before which we’ve gradually built up over the past few months.
We’ve also launched some new companies under the Enta Group banner.
A few years back Enta launched its Ministry of Gaming initiative, and since then, other distributors have announced ambitious plans in the PC gaming sector. What is your stance on gaming now – is it still a core focus of yours?
Absolutely. It’s part of our heritage and part of our DNA. A lot of staff at Enta are gamers fundamentally, so we’ll still aggressively pursue that sector and we welcome the competition. It’s a growing market and we can’t serve it all ourselves.
How would you say tech distribution is changing?
I suppose the macro trend is consolidation, which has been happening across the market, primarily driven by Exertis. Obviously as it becomes more consolidated there are less players in the market, but the remaining ones are very strong, meaning the big four are getting stronger and stronger, so there’s less and less choice for resellers.
Some of your rivals like Exertis have been making a lot of acquisitions over the past year. What do you make of this? Do you welcome the extra competition?
It’s natural in any industry, the maturity and consolidation that takes place. The IT distribution business isn’t the most attractive at all, so people can exit with high multiples.
Scale is all-important, and DCC Group and Exertis recognise that, and they’re doing it.
Whether it will be more competition or less competition is open to interpretation. Essentially it’s the same competition, because Computers Unlimited will merge into Exertis. Whether it becomes that much stronger or that much weaker will remain to be seen, so from my perspective I welcome it very much. Time will tell.
Bearing in mind most mergers tend to produce negative shareholder value, however all mergers of Exertis have created positive shareholder value. They’re a talented bunch there.
Do you have any plans to make similar acquisitions?
Not in the medium to short term. Not really, no.
What new challenges do you face as a distie in today’s market?
There are so many challenges out there. One of the key challenges for any distributor is to have a cloud offering which works. There’s a lot of hassle along the way in terms of purchasing, provision and managing those services through multi-layers. That would probably be the big challenge.
Are there any new opportunities emerging that you can see coming to the fore over the next year or so?
There are tons of product opportunities. I would say the biggest opportunity for us is deeply understanding what our customers require in the future and making sure we can deliver that. Technology, products and vendors come and go, it’s about making sure that we have the best infrastructure.
A lot of our competitors are shipping boxes – we’ve got to build up our whole infrastructure from an IT perspective, from a systems side, to ensure our resellers can be powered by Enta going forwards.
We’ve invested so much money on our ERP system and analytics platform to support resellers with our back-end technology. In the old days, distribution was about providing credit and providing reach – now it’s so much more.
How will the tech distribution sector evolve in the future, and how do you anticipate Entatech will change in particular?
There’s going to be further consolidation, that’s for sure. Boxes will still be shipped, there will be increasing competition from disintermediation. For us, referring back to our mission statement, we will align our resources behind the appropriate vendors. We know what our customers want and what our vendors deliver. We can’t work with everybody, there are quite a few people out there who value Entatech, and we’re going to work very closely with them to deliver future products and services that we’ll all require.