Westcon-Comstor underlines benefits of security and networking focus

It is becoming clear that those channel players that are active in the security and networking arenas are getting through a challenging 2023 with a bit more ease than those reliant on other areas that have been cut back due to budgetary pressures.

Earlier this month, Exclusive Networks shared numbers for its first quarter, which produced IFRS revenue that was up 25%, based largely on the distributor’s ability to lean on its position in the security market.

Underlining the robustness of the security and networking sectors are the positive results from fellow distributor Westcon-Comstor for financial year 2023.

The firm announced an 18.3% year-on-year increase in revenues to hit $3.42bn for the year ended 28 February 2023. Security and networking helped, but so did the firm’s efforts to accelerate its options on the software and subscription front.

Breaking through the $3bn barrier is a first for Westcon-Comstor, but the firm was able to deliver double-digit growth last year as well, so it is keeping the momentum going across the business. It also indicated that the strategic five-year plan it embarked on back in 2018 is delivering the desired results.

Other financial highlights included a 21% year-on-year increase in adjusted EBITDA profit to $95.1m, up from $78.6m.

Security revenue improved by 17% to $1.33bn, and the networking business was also firing with growth of 19% to reach $1.76bn.

The distributor has signalled that it is investing in its cloud marketplace activities and this financial year will include more internal digital transformation to generate more insights that can be shared with partners to drive further growth.

These latest financial numbers indicated that the firm is already on that path to subscription and software, with recurring revenues now accounting for 42% of the total, up from 31% in 2019.

“These results demonstrate our ability to thrive amid challenging macroeconomic conditions, while accelerating our journey to becoming the world’s leading data-driven technology provider and specialist distributor of cyber security and networking solutions and services,” said David Grant, CEO of Westcon-Comstor.

“Our data-driven approach, combined with our commitment to partner success and environmental and social responsibility, means we are uniquely positioned to bring real value to our partners and vendors – enabling them to drive their digital transformation and navigate the increasingly rapid evolution of the technology distribution landscape,” he added.

Grant said it had plans for this fiscal year and was already building on the efforts it had already made in fiscal year 2023.

“We’re delighted to have reached so many new milestones in 2023, including accelerating our own digital transformation with the recent successful launch of our PartnerCentral marketplace. We’re particularly pleased to have seen industry-beating performance in cyber security and networking, while our growth in software and services underlines our position at the forefront of the shift to a subscription-based, recurring revenue XaaS future,” he said.