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Maintel interim CEO details transformation progress
The channel player has been through a process of focusing the business on specific areas
Maintel is a business in transition, moving from a position of operating as a generalist to focus on developing around key specialist areas.
Helping drive the strategy is Maintel interim CEO and chief technology officer (CTO) Dan Davies, who has been with the firm for a decade and has a clear idea of where the business is going.
The channel player has been around for 35 years, with 20 of those listed, starting life in the PBX maintenance space, developing a small and medium-sized enterprise (SME) customer base.
“We did quite a lot of business with dealers and built a really successful business,” said Davies. “But it got to the point where they wanted to diversify into new technology areas, maybe move up the food chain a bit in terms of size of customers they can deal with.”
The strategy evolved as the business expanded its customer base and technology offering as a result of M&A activity.
“There was a period of time between probably 2010 and 2017 where there were a significant number of acquisitions done along the way – about seven or eight in total,” he said.
“They wanted to move into things like connectivity, networking, security, contact centre and customer experience, and largely did that through acquisition and from a market perspective, moving up into enterprise and into the larger public sector.”
Azzuri acquisition
The biggest deal the firm sealed was picking up Azzuri Communications, which tripled the size of the business and added a lot of scale.
“It really turned Maintel from a reseller maintainer into a service provider because there were platforms, service provider technologies and a fantastic customer base,” he said.
Those acquisitions added a lot of additional technologies and had an impact on the shape of the business.
“Where I think we found ourselves through that trail of acquisition was a generalist in the communications market,” said Davies.
“We were working in all different customer verticals,” he said. “Everything from mobile through to paging systems and everything in between – document solutions, print management, all of that.
Covid and a global chip shortage hit, which put pressure on hardware-related sales, and when Davies took up a senior position, the business was already considering its future direction.
“When I was asked to join the board as CTO in 2020, one of my first observations was that we became quite a legacy telco generalist,” he said, adding that he could see there were areas the firm needed to move into, including public cloud, with UCAS and CCAAS, SD-WAN and cloud security.
Changing approach
The firm was particularly successful selling SD-WAN services, but the chip shortages made life difficult and added pressure to the results.
“We went to market with our managed SD-WAN service,” he said. “We were really successful, and we sold a number of great contracts, a bunch of which we then couldn’t deliver because we couldn’t get hold of the hardware to turn them on. So, we had quite a tough financial year ’22 whereby we had a great order book, a big chunk of which we couldn’t deliver, but we knew we were going to have to deliver it once the hardware came.
“We made the tough, but I believe the right, decision to say, ‘Well, actually, we need to keep our professional services team intact, even though they’re under-utilised, because we know we’ve got to deliver all of this when it comes through’,” said Davies. “And that meant that our EBITDA performance that year wasn’t where it needed to be. Now, you could argue that was factored outside of our control, but when something like that happens, I think the tide line drops down, and it exposes things that you probably should have been dealing with within the business that were being covered up by the good times.”
That was the moment the decision to stop being a generalist and to sell-off some parts of the business became a concrete idea.
“We looked at it as a real opportunity to take a step back and think about the business,” he said. “So, what have we become? What did we really want to be? What did the market need us to be? Where was the opportunity? So, we did a full strategic review. Part of that was a restructure of the organisation to get it fit for the future in terms of shape, size and structure.”
Decisions were made to exit optical networks management and print management, and focus on a number of core areas.
“The trouble with being a generalist in the UK is the only real generalists in the comms market these days are the Vodafones, the BTs, the big boys, and they’ve got the resources and the people to spread across a really broad portfolio,” said Davies. “We were spreading ourselves too thinly to be competing with the specialists, and we didn’t have the resources to compete toe to toe with the big generalists.”
Some rivals had taken the decision to react to that challenge by becoming more generalist, and piling on the IT and comms services to try to win more business.
Customer expectations
At Maintel, the acquisitions had already taken the firm into the mid-market and enterprise customer segments, and it was a result of meeting the demands of those users that the transformation process was sharpened.
“When we’re more upper mid-market, enterprise, large public sector, although they don’t want too many suppliers, they don’t necessarily just want one [the generalist MSP],” said Davies. “They want specialists in each kind of core area of IT and comms.”
The space above the SME-focused MSP that is aiming to be a one-stop shop, and the global SI is where Maintel identified a clear opportunity that shaped the transformation strategy.
“When we thought about the services we were going to focus in on that were three core pillars to go to market with, [they were] unified comms and collaboration, customer experience, and security and connectivity,” he said. “Those pillars are absolutely fundamental to our customer.”
Rebranding
The business put its efforts behind a clear strategy and then rebranded to emphasise there was a difference going forward.
“The rebrand was really about, ‘How do we externalise this, and make and deliver the message to our customers, prospects and the market in a way that’s really simple and that people can get behind?’” said Davies. “We started with a purpose: ‘Why do we exist?’ So, that is to use technology to create customer experiences, services and workplaces that inspire and empower people.”
Having emerged from the review with a clear strategy, there is a sense from Davies that the future is going to be positive for the business and its customers.
“We’re very much focused now on moving to a phase of organic growth,” he said. “We’ve done the acquisition piece that served a great purpose and got us where we needed to be. I feel we’ve got a really complete portfolio in the three pillars that we focused on. We’ve got strategic vendors across those pillars.
“We’re in a great place as a company,” said Davies. “We understand who we are, what we sell, who we’re going to sell it to, and why they would buy it. And I think that’s clarity that we haven’t had as an organisation before. I think that really puts us in a good spot on the starting blocks. I’m buoyant about next year, but I’m not blind to the challenges.”
Life as a CEO
Davies became interim CEO back in February, and has enjoyed the additional responsibilities. “I’ve absolutely loved it,” he said. “I guess, for many years, I’ve always been a bit of a frustrated chief exec. I’ve always been quite business-focused.”
Having studied IT business at university, Davies has always had a combination of technical and commercial skills.
“It’s always been, for me, about the business,” he said. “I think I’ve built a career on helping translate that complexity for our customers so they can really understand the value that they’re going to get.
“It’s been great,” added Davies. “I think what’s helped is that a lot of the heavy lifting from a CTO perspective was done at the beginning of ’23, when we did that whole strategy review piece.
“Yes, it needs an eye keeping on it and steering in the right direction, but I’ve been able to throw myself wholeheartedly into the interim chief exec role, thankfully.”
