As a successful pioneer of the added value model in telecoms distribution, David George could have headed off for sunnier climes with an array of grateful resellers wishing him luck. Instead he has just launched Pragma, a new ICT distribution business. We found out why.
David George looks fit, relaxed and confident as we sit down to talk about his new venture and is unfazed by my first question: “Have you gone mad starting a new distribution business in this economic climate with so much competition out there?” His answer is typically erudite. “Despite changes to technology I believe the reseller will continue to be the route to the end user customer,” he said. “Over the last few years I have been watching the market consolidate and the competition disappearing and with it a great deal of the value that resellers need. I could see the market conditions were right for the launch of a new value added distributor.”
George launched Crane Telecom in the early nineties to address the fast growing demand for sophisticated business telecoms solutions in the post deregulation heydays. On the back of a strict ‘value add’ philosophy, the company grew to become a major force in channel distribution on the back of key partnerships with LG, Avaya and Mitel and others. The Crane board sold the business to the Westcon Group for an undisclosed sum in 2007. George then crossed the divide to join London reseller Redwood as a non-executive director and he was heavily involved in its recent sale to Timico.
“I was Executive Chairman and thoroughly enjoyed my time at Redwood. We grew the business by 50 per cent in tough economic times and made it more profitable. They were a great bunch of people to work with. I believe Timico will prove to be an excellent partner for Redwood enabling the business to expand much faster than if it had remained independent. You look for an acquirer to have a strategic fit and the Timico management team together with Redwood seemed to bond naturally.”
Empathy is a crucial element to George’s mind-set and he firmly believes resellers are currently being short-changed by the management teams of indifferent conglomerates. “We see a great number of resellers being disenfranchised with current manufacturer’s policies and approaches. The added value is critical in the UC space. Resellers need partners rather than impersonal and distant suppliers. Manufacturers are making it harder and harder for resellers to sell their products and taking more money out of the channel for the privilege. We propose to work closely with resellers building personal relationships and trusted partnerships with outstanding levels of support.”
George has teamed up with the two former Crane colleagues, Tim Brooks and Will Morey, who share his philosophy. Brooks is leading partner development and Morey sales and marketing. “I have known these guys for a very long time and know they share my principle and values. When I saw this opportunity they were my first thoughts as partners,” added George.
So what will be Pragma’s unique selling points? “We will be organised to suit our customers not ourselves, we will offer winning products with a strong future roadmap with the emphasis on retained margin for the reseller,” said George. “We will have great people who share our passion for supporting resellers and as our name suggests a pragmatic and practical approach shaped by our resellers needs.”
The trio, who have jointly financed the launch have ‘set up shop’ in Burgess Hill where it all began for Crane, and George has decided to go ‘back to the future’ by securing its prime vendor partnership with LG Ericsson. LG or Lucky Goldstar, as it was in the nineties, were Crane’s first manufacturing partner but George says there was no nostalgia attached to the decision. “This was not an emotional decision but a business one,” he stated.
“We believe LG Ericsson have great brand and a powerful portfolio with huge potential for growth within the UK. The opportunities for resellers are significant with a great product, strong retained margin and compelling applications proposition. LG Ericsson is not another ‘me too’ product. This enables resellers to put a fresh proposition in front of the customer without there being several competitive quotes for the same product.”
With a skeleton team in place and stock arriving, George expects Pragma to be open for business in September with fast expansion on the agenda. “We have built a strong team to support the market with pre-sales, sales, technical support, marketing, finance, order management and logistics and expect fast growth and as a result we will be constantly adding to the team.”
George says channel reaction has been positive and he is confident he can expand the Pragma reseller base rapidly. “A lifetime of experience has taught me that happy customers will stay loyal to their existing supplier. We believe there are a lot of unhappy customers at the moment who see the need for change. It’s up to us to prove that we are worthy of their custom in the future. The reaction to our arrival has been overwhelmingly positive. We know it is still a tough economy but resellers who understand their customers’ needs and offer great products with genuine value will continue to win. I can’t resist a challenge and a business opportunity. I really enjoy it. I started Crane in the depths of a recession. If you outperform the competition you will succeed.”