Business Model

Enabling customers in their end-to-end digital transformation journey

SoftwareONE believes that it differentiates itself from other technology solutions providers through its software and cloud expertise, an expanding portfolio of end-to-end IP and technology-driven services capabilities, and a global reach, all powered by its proprietary digital platform PyraCloud.

SoftwareONE has created compelling offerings to support customers in their entire transformation journey:

SoftwareONE offers an end-to-end value proposition to help its customers deliver across the three transformation pillars: commercial, technology, and digital. It helps businesses define a technology strategy, procure the most appropriate software and cloud solutions at the best price, facilitate their migration to the cloud and manage and optimize their software and cloud estate, thereby helping them enhance the return on their technology investment. In turn, this efficiency and software and cloud optimization frees up the resources required to fuel future waves of digital transformation. Companies can create the data, applications and DevOps capabilities needed to innovate new products, create new experiences and pursue new business models.

SoftwareONE is accelerating its digital sales engine into a provider of IP and technology-driven services at scale, in terms of increasing services adoption among its customer base and building on its market-leading positions in SLM/FinOps and managed cloud services. SoftwareONE’s proprietary digital platform PyraCloud will continue to play a central role in delivering all areas of the company’s portfolio by acting as a ‘digital sales force engine’ and reinforcing long-standing customer relationships.

Intelligent marketplace and cloud automation platform

PyraCloud lies at the core of SoftwareONE’s business model
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SoftwareONE believes that its proprietary digital platform PyraCloud is unique in the market, connecting customers, publishers, vendors and independent software vendors (ISV). The platform provides an end-to-end suite of solutions delivering data-driven, actionable intelligence, industry benchmarks, orchestration and automation. This helps customers optimize their software and cloud estate investments, driving technology, digital and commercial transformation. At the end of 2020, over 50% of customers had access to the PyraCloud platform with the goal being that the vast majority of SoftwareONE’s customers will have access to and use the platform in the coming years.

Globally scaled platform to serve customer needs

SoftwareONE has one of the broadest geographic footprints in the industry with local sales and service delivery capabilities in 90 countries, from which it serves a large global customer base of approximately 65,000 business customers worldwide. The company believes that its global presence offers significant competitive advantages, including the ability to serve as a one-stop-shop for multinational enterprise customers’ software and cloud requirements across their geographic footprint worldwide. Its ability to source software and cloud products across a broad range of jurisdictions around the world further allows it to deliver savings to customers through globally optimized pricing. As a result of its broad geographic diversification, SoftwareONE benefits from reduced risk exposure to specific geographic regions.

Customer value proposition through the economic cycles

During 2020, businesses were confronted with an environment that amplified the need for digital transformation as technology requirements grew in complexity and strategic significance. In addition to the strategic decisions around technology investments and lack of visibility around software and cloud usage and spend, companies faced immediate challenges with 100% remote-working operations and the virtualization of the entire IT environment. Cloud migration strategies became a ‘cloud now’ strategy with an increasingly complicated security posture. The SoftwareONE Solutions & Services portfolio was able to offer customers a strong value proposition, be it to expose and reduce costs, or to migrate to and manage a cloud environment.

Diversified customer base

SoftwareONE enjoys strong relationships with a large and highly diversified global customer base of approximately 65,000 business customers.

The group believes that its results-driven, customer-first approach to business has allowed it to build strong relationships with its customers as a trusted advisor addressing commercial, technology and digital transformation challenges. As a result, SoftwareONE has enjoyed strong gross profit retention and has been able to successfully gain a growing share of its customers’ wallets. The group also ranks high across key customer purchase criteria such as technical expertise, security, transformation and customer service and is one of the most trusted brands in its industry.

In addition to its strong customer relationships, SoftwareONE benefits from a well-diversified business mix across geographies, customers and industries. The group estimates that large enterprises with more than 3,000 FTEs accounted for approximately 25%1 of the gross profit of SoftwareONE in 2020, with small and medium enterprises (SMEs) with less than 3,000 FTEs accounting for 70%1 of gross profit.

SoftwareONE has a highly diversified customer base of approximately 65,000
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1) Estimate based on total number of SoftwareONE customers using billing codes. Customer FTE information sourced from Dun & Bradstreet’s D-U-N-S database. Approximately 5% of        SoftwareONE customers cannot be allocated.

2) Estimate based on total number of SoftwareONE customers using billing codes

Strong relationships with software partners

SoftwareONE benefits from long-standing and deep relationships with software and cloud partners.

The group has trading relationships with more than 7,500 software and cloud partners covering the full spectrum of software and cloud spend, including leading global software publishers such as Microsoft, Adobe, Oracle, Red Hat, VMware and Symantec, the best-performing hyperscalers such as Microsoft Azure, Amazon Web Services (AWS) and Google Cloud Platform (GCP), and a growing portfolio of disruptive publishers, among others. In particular, SoftwareONE has a long-standing, strong relationship with Microsoft, which dates back more than 30 years and has been a stable source of gross profit growth. Based on the global transaction volume of SoftwareONE in 2020, the group estimates that it is Microsoft’s largest channel partner and its largest Azure partner globally. SoftwareONE has established this differentiated leading position by continuously optimizing its capabilities to service the specific needs of globally leading publishers.

Microsoft software accounted for approximately 50% of gross profit in 2020, of which a large portion was attributable to sales of Microsoft Azure, Microsoft Office 365 and Microsoft Dynamics 365, reflecting the group’s strategic alignment with Microsoft’s high-growth SaaS and public cloud products. SoftwareONE believes that it is well-placed to benefit from Microsoft’s growth prospects, as building up the capabilities to deliver Microsoft software cost-efficiently and at scale requires substantial investment and expertise that is difficult to replicate and that allows the group to manage the significant complexity of licensing, pricing and consumption options.

Building on the successes with Microsoft, SoftwareONE is continuously strengthening its relationships with AWS, GCP and other hyperscalers as well as the growing universe of software publishers to capture the expanding growth opportunity in the software and cloud space.

SoftwareONE solves software and cloud publisher’s pain points

Software and cloud publishers experience a number of ‘pain points’ in the distribution of their products through channel partners, with respect to the reach, scale and capabilities necessary to drive software consumption, access to a dispersed audience of SMEs, the ability to provide local product support and services in remote geographies, the flexibility to support a range of business models and the ability to drive digital readiness and transformation. As a globally scaled software and cloud-only platform with strong value-add IP-driven offerings, SoftwareONE is able to provide solutions to these challenges, making it a partner of choice for publishers of all sizes. ONEClub by SoftwareONE is a leading global channel program aimed at collaborating and enabling IT solutions providers to utilize the SoftwareONE portfolio for their business, as well as extending the portfolio to their end customers to support digital transformation. In addition, SoftwareONE builds rich solutions and offerings in the form of a joint model with its partners, delivering these capabilities through its global online marketplace. Unlocking innovation, driving operational efficiencies and reaching new markets is the foundation of the SoftwareONE partnership model.

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1) Estimate based on total number of SoftwareONE customers using billing codes. Customer FTE information sourced from Dun & Bradstreet’s D-U-N-S database. Approximately 5% of SoftwareONE customers cannot be allocated.

In addition, SoftwareONE believes that by addressing the challenges businesses face in adopting the cloud, it helps enable its key partners’ cloud and SaaS strategies. SoftwareONE’s cloud advisory and migration services, digital supply chain services and managed cloud offerings facilitate its customers’ adoption of SaaS and the public cloud, thereby accelerating sales for software and cloud publishers. As a globally scaled channel partner with the ability to drive spending on software and the public cloud, SoftwareONE at the same time benefits from C-suite level access with its key publishers and their investments in the development of their channel programs in the form of training, marketing and other resources.

Global and local operating model

SoftwareONE’s business is powered by a lean global and local ‘glocal’ business operating model built to deliver profitable growth at scale. It has a lean group structure with empowered local subsidiaries supported by three global service delivery centers in Delhi, Mexico City and Leipzig and six regional service delivery centers on four continents. This model is both local and global, enabling customer proximity and a focus on local expertise while at the same time ensuring consistent and cost-efficient delivery of the group’s global service portfolio. Customers benefit from customer-focused local support in 90 countries and centrally delivered 24/7 customer service in 13 languages.

For SoftwareONE, this operating model offers the benefits of a scalable dynamic resource model, in which resources are efficiently shared across regional operations, and standardized functions are carried out cost-effectively from low-cost locations. SoftwareONE has leveraged its dynamic resource model to drive operational efficiency with initiatives to shift additional workloads from local subsidiaries to regional service delivery centers, while also standardizing its global service catalogue and automating many of its processes. Together, these measures have contributed to margin expansion in recent years.

Global and local operating model delivering a virtuous cycle of customer engagement
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M&A expertise

SoftwareONE has a strong track record of supplementing its organic growth with a strategic approach to M&A and since 2015 has completed 16 acquisitions focused on scale, geographic reach and capabilities.

The primary objective of SoftwareONE’s M&A strategy is to acquire businesses that strengthen its ability to deliver commercial, technology, and digital transformation for its customers and underpin its portfolio focus areas, namely SAP on hyperscaler cloud, the hyperscaler factory, application modernization and managed FinOps, and the focus on specific industry verticals, as further outlined in the Strategy section.

During 2020, SoftwareONE successfully acquired 100% of Intergrupo, a leading cloud technology and application modernization provider in the Latin American market, adding 1,450 FTEs to SoftwareONE. Additionally, SoftwareONE made a series of  capabilities-driven acquisitions in technology and service areas of strategic importance. These transactions included the acquisitions of GorillaStack, a leading cloud cost management and real-time event monitoring software platform for AWS based in Australia, B-Lay, a leading provider of Software Asset Management (SAM) advisory and managed services for SAP and Oracle solutions based in the Netherlands, Optimum, a SAP-focused services and solutions provider based in the US, and Intelligence Partner, a leading Google Cloud services company based in Spain, as well as the talent acquisition of the founders of the Swiss Microsoft-focused IT services providers ‘Make IT Noble’, who have joined the SoftwareONE family.

SoftwareONE believes that its proven ability to draw on its deep industry relationships and reputation to successfully pursue M&A opportunities, and its strong track record of integrating acquired businesses with discipline and a culture of ownership, are strong assets that will enable the group to further execute its M&A strategy. Moreover, its scalable ‘glocal’ operating model allows for both the efficient integration of acquisitions of scale and the ability to scale smaller, capabilities-based acquisitions.

StrategyIndustry Environment

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