Interview: Graeme Watt, CEO of Softcat

Ever since it went public back in late 2015 Softcat has consistently delivered strong results underlining not just the strength of its own business but the value that the channel plays in the delivery of technology and services.

Graeme Watt has been CEO of the firm since he succeeded Martin Hellawell last April and the channel veteran is enjoying life at the reseller. He came with a career that included numerous senior distribution roles but the chance to take the reins at Softcat is one that he is relishing.

“Why wouldn’t I want to be a CEO of a company that’s one of the best companies in our industry in the UK, EMEA and possibly globally? I have learnt what it’s like to be in reseller land and it’s exciting to be close to the customer and to be valuable to the vendor,” he says.

“We have a very simple strategy: keep going after the share in the market, both by acquiring new customers and selling deeper into existing customers. We have built out a technology portfolio strongly in the last four or five years and it is continuing to take share and it’s a simple strategy that is well executed. We think it has loads of runway in terms of share to go after in the UK,” he adds.

It also helps that the channel is a strong market and most vendors are seeing growth through their indirect routes to market.

“The channel in most cases is growing faster than the direct business of virtually all of our top vendors. The channel continues to grow faster than direct business because we bring so much value that the vendor can’t or won’t invest in themselves because it doesn’t make any sense,” he says.

Watt also comes into a business that has an established policy of extending its UK footprint to increase growth and that remains the strategy. The firm will open its latest office in Birmingham next month to gain more market coverage.

“We have a strong track record of sticking to the market we know and investing in new offices,” adds Watt  “Over the last few years we have opened up one a year and last year we opened up one in Ireland and it has been a very successful model. With Birmingham we will have eight offices in the UK and one in Ireland.”

Birmingham might not be the last chance that Watt gets to cut the ribbon on a new office with the firm still open to the idea of further expansion.

“It is not clear if we have reached our saturation point in terms of offices or not and we will have to consider that over the course of next year,” he says.

But when it comes to the prospect of making an acquisition the strategy is clearer with it being unlikely that the firm would change an approach its stuck with since its formation in 1993.

“If we see a need in a customer we don’t have ourselves then we have the opportunity to partner with somebody, or we can build it or we can buy it. But we have never acquired before and based on our history our approach is 'build-it' if we think we can make a good return over time,” he says.

One of the things that has most impressed Watt is the company culture at Softcat, which helps the firm keep the growth ticking over as well as being recognized with plenty of vendor channel awards.

In his role as CEO Watt goes out to customers and asks what their concerns are, how the firm can help fix them and if they are happy with the current relationship. The company culture emerges as a key component of how the second and third queries get answered.

“They say it’s our people. The philosophy of the company is built on having a fantastically positive and supportive people, recognition and rewards, fun and appetite to learn. Through that we drive really high levels of employee satisfaction and motivation and it has a direct knock-on effect on our customer's satisfaction,” he says.

“We try to develop relationships we don’t try to land grab. We build relationships and prove ourselves through engagement,” he adds.

Watt views his tenure at Softcat as part of an ongoing story that started with Peter Kelly in 1993 and running things for the first 12 years, with Hellawell running the next 12 and then the latest chapter starting last April.

“What Peter Kelly did was to create this culture and if you are another company of a similar size or ilk of Softcat you can’t build it, it has to come from within,” he adds  “You can modify the culture but you can’t change the culture.”

Watt views Softcat as one of a handful, along with the likes of Computacenter, CDW and Insight, that can offer a wide breadth of services to customers. But that doesn’t mean that he is competing for every deal with those rivals.

“We don’t often target the same segments. There is a bit of a trend and the market is consolidating a bit towards those fewer technology partners that have the breath,” he says.

“If you go back to our history we were a very big catalogue business into SMEs,” he adds  “We have more software as a component of our business than anyone else and we have a huge SME customer base that makes us extremely valuable as a route to market for our vendors.”

Ask any vendor which resellers they would like to have sitting in the platinum tier of their partner programmes and the answer would include Softcat. The pressure is there for the reseller to deliver the results for those it is working with and to sanity check future prospects.

“If we are not being successful with the big vendors then they are not going to be successful. I think it is healthy and that mutual need for each of us to be successful is positive,” says Watt about the pressure to deliver to existing vendors.

When it comes to evaluating new opportunities Watt is keen to stress that it views its role as,” offering leading edge technology not bleeding edge technology”.

“It is not our desire to go and take unproven technology and put it into customers. We don’t want to push our customers into being early adopters because I think there is risk associated with that.  So our job is to come up with proven technologies and proven vendors and proven solutions that give customers what they actually want. We are customer led,” he says.

But Softcat is exposed to what is going on in the market and it can follow the trends to identify where it might need to strike up a relationship.

“We know who’s selling and why they’re selling and what their strengths and weaknesses are. If half of all the vendors coming to us are from the security space, then that will tell us something,” he adds.

Watt has been around long enough to have heard plenty of claims that the channel is on its last legs or losing relevance. But he remains committed to the indirect model and remains convinced that it is in a strong position.

“I remember joining First Software back in 1988 as a wet behind the ears financial controller, and even in those days you would go for a beer after work and would be leaning up against the bar and chatting away about the future of distribution and if it had a future.  Thirty years later, Tech Data is as big as ever, Ingram is huge and the channel business is growing bigger than the direct business and it’s a fantastic place to be. I don’t lie awake at night worrying about the future of the channel,” he concludes.