In case you missed it, ALSO Holding AG plans to purchase Westcoast Limited’s operations in the United Kingdom, Ireland, and France in a cash and share transaction with Joe Hemani, Westcoast’s private owner and chair, subject to regulatory approvals. With this acquisition, ALSO will be ranked fifth globally in the distribution arena.
What implications does the ALSO Group’s acquisition of the biggest UK IT distribution company have for the UK channel and globally? It’s early days, so we’ll keep an eye on the results and discuss with the channel community, but it appears to be a victory for the channel, particularly in the SaaS sector.
In the global picture, will ALSO be coming to America? Is ALSO now a prime target for acquisition?
Alex Tatham has been at the helm of Westcoast and been a major driving factor behind its success for many years, and even after our last conversation, I did not see this coming. But nothing surprises me anymore. I’m not sure what the new management landscape will look like, but I hope it’s a sensible decision. In today’s social media age, every organization requires a trustworthy human face.
Will this latest acquisition set off a chain reaction of similar acquisitions as the market continues to consolidate? How will competitors such as Ingram Micro and TD Synnex react? I can easily imagine a couple more M&A transactions. Everyone appears to be converging on a marketplace theme, and I believe the biggest winner will be the one who can supply the MSP with a “proper” private-label marketplace (keyword proper – see the end of this post for an example).
Traditional warehouse distribution models will continue to have their place in hardware configuration and fulfillment, but Software as a Service (SaaS) is dominating the growth. The ultimate goal is to create a frictionless SaaS discovery and procurement process. With the rapid expansion of cybersecurity and artificial intelligence, all distributors will need to transform themselves in ways they may not yet recognize. Simply having a cool Cloud marketplace may be insufficient. Managed Service Providers (MSPs) require considerable assistance with cybersecurity, compliance, and other complex issues like insurance requirements and privacy concerns.
I usually pay great attention to distribution since it often feels like they are the “canary in the coal mine.” Several of my recent interviews with Ingram Micro, PAX8 (and others) are available on eChannelNEWS. AppDirect (a large marketplace) bought cloud distributor ITCloud not too long ago, and it appears that they are preparing some significant moves.
While I believe the channel will benefit from this recent M&A, keep in mind that the person in charge of the transaction still holds the golden key. MSPs may wish to take a moment to think about this carefully and plan their future steps.
Many people argue that it doesn’t really matter who handles the actual transaction the product. Really? Think about your role as an MSP doing business with either Distributor A or Vendor B. If the MSP decides to switch providers, how can they ensure that their clients will follow them, especially when they do not handle the actual transaction?
Working with the right distributors matter!
There are ways for MSPs to maintain more control over the supply chain while benefiting from the value that all distributors and vendors provide. If you are curious to see what a good independent, private label marketplace looks like, check out a platform that we have been exploring: https://cybersecuritydefenseecosystem.com/services/iasset. While you are checking this out, explore and consider joining the Cybersecurity Defense Ecosystem (for FREE) to help you solve some of your big cybersecurity challenges!
