SoftwareONE’s strong track record of profitable, predominantly organic growth is attributable to the successful execution of a business strategy focused on growing its Software & Cloud business from existing and new customers; cross-selling and up-selling Solutions & Services; expanding its portfolio to serve customers end to end; and scaling its global-local operating model. The group has supplemented its organic growth strategy with a strategic M&A platform.
SoftwareONE intends to continue to drive profitable growth through the further execution of its strategy, while capitalizing on robust expected market growth and the capabilities of PyraCloud, its proprietary digital platform.
The following diagram illustrates the group's business strategy:
Grow Software & Cloud
SoftwareONE intends to continue to grow sales in its Software & Cloud business line by leveraging its large existing customer base of approximately 65,000 business customers, which provides significant additional gross profit potential through contract renewals, volume and feature upgrades, and growing SaaS and cloud adoption, among other opportunities to increase the share of its customers’ wallets. In addition, after a period during which the group focused on sales to existing customers in anticipation of the acquisition of Comparex’ book of business, SoftwareONE plans to re-energize initiatives to expand its customer base. To achieve these strategic objectives, the group intends to selectively expand its salesforce after achieving strong gains in sales effectiveness and establishing new sales best practices that delivered strong bottom-line growth in recent years. SoftwareONE also plans to leverage its best practices and processes to increase the effectiveness of the salesforces acquired as part of the Comparex acquisition.
Cross-sell and up-sell Solutions & Services
SoftwareONE intends to continue to cross-sell and up-sell Solutions & Services. In particular, it intends to leverage its large Software & Cloud-only customer base to increase the number of customers who purchase both Software & Cloud and Solutions & Services from the group. Based on historical analysis, SoftwareONE estimates that customers who purchase from both its Software & Cloud and its Solutions & Services business lines generate approximately seven times the amount of gross profit that Software & Cloud-only customers do, and that they accounted for approximately 60% of total growth in gross profits for the combined group (including Comparex) between 2016 and 2018, - approximately twice the contribution of Software & Cloud-only customers. As a result, SoftwareONE believes that there is very significant upside potential from the estimated 51,000 customers, or approximately 80% of its customer base, that has so far only purchased Software & Cloud products from the group. SoftwareONE intends to capture the significant potential from its Software & Cloud-only customers through a number of initiatives, including cross-selling solutions and services to the customer base of Comparex and investing in cross-selling and up-selling capabilities.
Expand portfolio to serve customers end-to-end
SoftwareONE plans to expand its software and cloud-only solutions and services to further enhance its ability to comprehensively serve its customers in their digital transformation journey.
To this end, SoftwareONE intends to:
- Expand and deepen its relationships with key software and hyperscale publishers, including Microsoft, AWS, VMware, Red Hat and SAP
- Continue to develop value-add solutions for its key publishers’ core products across its Software Lifecycle Management, Future Data Center, Future Workplace and Security practices
- Build cyber-security components into every offering to address its customers’ security needs
- Accelerate sales by further developing PyraCloud into a digital marketplace and channel as a service for independent software vendors
- Expand its packaged services and standardized solutions, including by significantly expanding its digital supply chain, bundling advisory, professional services and managed services and continuing to package services into X Simple branded solutions for the mid-market
- Significantly scale up its capabilities in areas such as critical workload migration to Azure and AWS, application modernization, cyber security operations center, and managed cloud
In the medium term, SoftwareONE also intends to launch an integrated multi-capability managed service capturing the entire software and application lifecycle for customers and to launch a big data practice enabling actionable insights.
Scale global-local operating model for continued profitable growth
SoftwareONE intends to further leverage its lean and scalable global-local operating model to continue to drive profitable growth. To this end, it intends to expand its regional service delivery centers to further optimize resource utilization and talent acquisition across its organization. In addition, the group intends to further drive the standardization, digitalization and automation of processes across its global operations. It further plans to up-skill resources at its three global service delivery centers in Delhi, Mexico City and Leipzig to enhance customer experience. As part of its continued focus on profitable growth, SoftwareONE also intends to build on its strong business management track record by further empowering its local subsidiaries while maintaining a hands-on approach and standardizing its global service catalogue, as well as by sharing operational intelligence across its operations.
Pursue M&A opportunities
Building on its strong M&A track record, SoftwareONE intends to continue to selectively pursue M&A opportunities in the following categories:
- Opportunistic, scale-driven acquisitions in its Software & Cloud business that can be integrated into its business operating model with relative ease and are attractively priced
- Targeted acquisitions of “in-market services,” or service providers that offer services and solutions that are complementary with its existing services portfolio in specific countries
- Strategic acquisitions to broaden existing capabilities that SoftwareONE believes cannot be developed internally in a cost-effective manner