Infinigate CEO on breaking €500m revenues, Brexit strategy and gunning for 40 per cent growth in UK and France

Josh Budd
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Infinigate CEO Klaus Schlichtherle
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Infinigate CEO Klaus Schlichtherle

Klaus Schlichtherle talks to CPI about Infinigate's growth hotspots, and plans for its acquired acmeo business

Josh Budd: You're about to close out your financial year. What kind of growth are you expecting?

Klaus Schlichtherle: Revenue wise we will be well above €500m. We've had really good development over the last 12 months. The year before we did €420m roughly and now we are well above €500m, probably north of €520m I would say.

The overall market is still growing quite nicely, which is the basis of our growth. Then obviously we had an acquisition a year ago for a company in Holland which is contributing quite nicely and France and the UK are also developing quite nicely, which are the markets where we are underdeveloped. We're actually growing faster in those markets than we are in our core markets in DACH.

You acquired MSP and cloud distributor acmeo towards the end of last year. What was the rationale behind the acquisition?

We did some business in the MSP space, but we realised that if we wanted to really make a jump forward, a real jump, we would need to acquire a company with the expertise. To do it ourselves would have taken three or four years to really develop it. We started talking to acmeo and found out it would just be better to acquire a company. They have the expertise; skip the four years of development and take that expertise, the processes, systems and platform behind it and roll it out in Europe and offer it to other vendors as well.

Talk us through the integration road map for the business

We are combining the best of the acmeo and Infinigate worlds and accelerating our growth to roll out in Europe with that acmeo model. The other leverage is to work with our current vendors in the Infinigate world and develop the cloud business together with them. I think those are two real leverages behind it.

How long will it take to roll out acmeo's MSP offering across Infinigate?

There will be a step-by-step approach on the country side as well as a vendor side. It will take us two years to roll it out across Europe with all the vendors. We want to keep our special focus, so we want to start with a handful of vendors in two countries. Then we can start the next wave in the next two quarters in the next countries.

 I think it will take one and a half years to really get every country on board. And it is the same with vendors. I don't think every vendor is ready for the MSP cloud business; some are thinking about it, some have similar products already. You don't find a lot of consumption-based products; a lot of vendors just put it down as a monthly payment. There's also a lot of development in the marketplace where we need to be partnering up with those vendors to get the model right.

We want to be doing business as well. We will start building the processes and teams in the countries, and I expect we will be doing tangible business in those countries in 2019. It will take a bit of time, but I am confident we will have a substantial contribution from the acmeo model in 2019.

Will the acmeo business and branding change in the coming months?

Acmeo stays as its own company. In Germany we more or less have two brands now - acmeo and Infinigate - but we will develop the acmeo MSP cloud business which is basically a second brand in that sense.

We very likely will not use the second brand in other countries because there's no brand value. In the UK and France we don't need to build up a second brand; we will do that under the Infinigate roof. But we will give it a cloud and MSP flavour.

I like the acmeo marketing, I like the colour, I like what they have done with the branding. At the end there will be some kind of mixture in other countries outside Germany, which will reflect that we are an MSP and cloud distributor on top of a focused cybersecurity distributor.

You named France and the UK as ‘underdeveloped' countries for Infinigate. What are your plans to change that?

Basically by acquiring new customers and signing up new vendors. I cannot disclose everything, but we have a couple of vendors that will join us in the UK and France.

We are also growing the teams. I would say in the UK and France we will have north of 10 more people in each subsidiary to grow the business. Then we will bring the MSP and cloud business into those countries in 2019. Those are the main drivers of growth.

When you look at our portfolio in Germany, for example, we have 25 vendors. Those are vendors we can focus on in a couple of technology areas. In France, we have eight vendors, but we have five or six in the pipeline. I would say by adding five or six in the portfolio we can grow the business. But we will not add more because then we lose focus, so we are doing it step by step to get the same balance as we have in Switzerland and in Germany.

So in the UK and France we need a better portfolio, but just keeping the focus on cybersecurity and on certain technologies with certain vendors. That will give us a very nice business in a couple of years in the UK, I'm convinced.

What kind of growth rates can we expect from the UK and France this year?

I would expect in the UK and France we should easily grow by 30-plus per cent, more in the 40 per cent kind of range. It is really up to us signing up vendors. If we sign a vendor with a bigger volume, that has an impact.

I have a line-up of vendors I would like to have. If all of them would agree we would probably triple the business. But realistically 30 to 40 per cent is the maximum because of the focus aspect. More than that and you're getting really diluted, which doesn't help. It will be a case of carefully looking at what we can achieve and not having growth for the sake of growth.

To be an important player in a market you need to have a certain revenue, and we need to achieve this in the next two or three years to be a tangible player.

Click through to find out whether Infinigate is planning for a no-deal Brexit scenario..

 

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