DATASOLUTIONS IS REMAINING resolute on the UK market despite all the unease swirling around the country’s exit from the EU.
The Dublin-based IT distributor recently reported revenues of €40 million for the year ended March 2018.
Group managing director Michael O’Hara told Fora that the company is aiming for €80 million in sales by 2021 and the UK will play a substantial role in that, eventually making up half its business.
DataSolutions was operating solely in the domestic market for 25 years before finally making the move into the UK in 2016.
It works directly with cloud computing and IT security vendors to distribute their products to clients.
One of DataSolutions’ partners, US cloud-computing firm Nutanix had been working with the Irish company here and was looking for another distributor in the UK to bolster its sales ahead of an IPO.
“When you’re pre-IPO it’s all about getting the numbers in, the better the numbers the better your IPO will go,” O’Hara said. “That was our first foothold in the market in 2016.”
Things looked good at the start but, in a case of unfortunate timing, the UK voted to leave the EU later that year, throwing the business landscape into disarray.
DataSolutions was just getting its feet wet in the UK. In the short-term, it was hit by weaker sterling, but the longer-term issues around duties and a hard border with Northern Ireland are much more pressing.
“Will there be additional paperwork? The probability is there will be. Will there be tariffs and duties? It’s bad for business,” O’Hara said.
Nevertheless, O’Hara expects that the UK will be worth half of DataSolutions’ business by the time it hits the target of €80 million in annual revenue – up from around 35% now.
He envisions DataSolutions as being a conduit for US IT firms trying to get their products into the UK market.
In the coming weeks it’s meeting with a number of large American scale-up companies, some of which have reached “unicorn” status – a $1 billion private valuation from investors.
“Their technology is something that’s going to scale, but they need to come into the UK and European market. The UK is usually the first market they go to. But they don’t know anyone,” he explained.
O’Hara expects this strategy to start paying off in the next 18 months to two years.
While the UK is the main priority in DataSolutions’ future plans, the Irish firm remains a relative newcomer in the neighbouring market.
To strengthen its foothold, it plans to invest in or acquire local companies.
“You’ve got to lean into growth. It won’t happen by itself,” O’Hara said.
These investment targets would be other distributors with “partners that would complement (ours) and the technologies that we sell”.
“If there’s a company where the directors are looking for an exit strategy, those are the opportunities that we’re looking for,” he said.
The timing of DataSolutions’ UK launch has battle-hardened the company, O’Hara said.
“I would be less afraid of going into a new market now. I feel more confident about DataSolutions and the service we give with the team we have.”
The company has 30 staff with four in the UK handling sales in the market. The bulk of operations like technical support, admin and sales support are in Dublin.
“We’re going to grow to 50. We’ll see more of those jobs, it will be a mix between the UK and Ireland, and some of those functions will move to the UK as it makes it sense to put them there.”