'The best time to outgrow the market is in downturns like this' - Crayon CEO explains M&A strategy amid COVID-19 pandemic

Crayon is facing the biggest opportunity to outgrow the market since the 2008 financial crisis according to its CEO Rune Syversen.

Speaking to Channel Partner Insight, Syversen said that Crayon is preparing for an M&A spending spree across its global markets.

The Olso-based exec believes that investing in M&A and headcount growth at a time when its peers are taking a more conservative approach, will allow Crayon to leapfrog the competition.

"There's a thin line between stupidity and greatness," the CEO joked. "So we are trying to strike a balance there."

"We have a strong belief in our business concept and what we do. The only time you can outgrow the market is typically in downturns like this. Typically when everything is going up it's very hard to recruit, it's hard to find good acquisition targets. So if you have a good strategy and you're making the right moves, now is when the real opportunities arise, based on my experience.

"If you act like everybody else then you will be average, if you can find the diamonds in the rough when everyone is conservative and careful then of course it is possible to outgrow the rest."

Syversen said that Crayon raised around £30m (€33m) in capital funding before the summer in order to fuel a spate of acquisitions across Europe, the US and Australia.

He said the main goal is to add new services as well as new customers to the Crayon business through acquisitions.

"We have a decent-sized list of companies that we're working on as we speak," he said.

The Norway-based firm has made two acquisitions in Australia so far this year. It bought Sydney-based Oracle Cloud specialist Navicle in July and workspace solutions retailer Winc in June.

"We were just authorised by Microsoft in Australia, which is obviously a huge market with good potential - fairly similar to Europe honestly. The maturity of the market is also good, and the competitive situation is slightly less crowded than what you might find in Europe."

Syversen has always held a strong belief that the software licencing space is in the midst of a huge transition. He believes the larger software licencing players like Crayon will have the resources and capital to remain at the top of the industry while smaller firms will disappear from the market.

Crayon released quarterly earnings last month which show a 44 per cent increase in revenues to NOK 6.1bn, while gross profits grew by 35 per cent to NOK 666m.

"Even though we've kept on investing in the transformation that we have been going through the last couple of years, we were still able to produce these results. We're fairly happy with where we are and we're quite positive about the business going forward," he said.

"We are also impacted by automation and digitisation on our side; we also have to improve our processes, remove manual processes and move more towards automated and integrated solutions in our vendor portfolio with Microsoft, AWS and others. Which is of course costly; but it puts us in a good position when compared with the smaller players that cannot afford it or where the vendor sees the cost of enabling them is too high and more or less pushing them towards a consolidation. We have a good presence and a good opportunity to take part in that consolidation.

The CEO said Crayon has also been actively hiring across its business. He added that the firm has been able to acquire a lot of talent from Comparex following its acquisition by SoftwareONE in 2018.

"What I'm seeing is, I still have talent coming, particularly from Comparex, looking for new opportunities and we're open for hiring still. But I think our main concern is now focusing on customers in the market and also our M&A activities."

Syversen said that Crayon's global workforce has been comfortably working remotely throughout he COVID-19 pandemic, claiming that the company has been promoting flexible working for the last decade.

He said that staff will be able to make up their own mind about whether they feel comfortable to return to the office if they are able to work effectively remotely.

"I think people have got used to the work from home lifestyle and they want to do it more than before. But then there are those who need to be in the office more often because of the kind of work that they do. Then some people have more need for socialisation than others. So I think it is more of a personal thing as well as the type of work that they do," he said.

"It will be interesting to see whether the need for office space will go down due to this, which many people predict. But we will see - the most important thing for us of course is to keep people safe in the situation we have and to see if we can help our customers manage the situation the best they can."

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