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Westcon NZ financials hold up in changing market

14 Nov 2014

Westcon Group New Zealand clocked up revenue of $148 million for the year ending February 2014, in a market where the company says rapidly changing purchasing models are affecting revenues of distributors and resellers.

The distributor recorded profit for the year of $4.2 million, a slight increase over the previous year’s $4.1 million, despite revenue being down on the previous year’s $154 million.

Dave Rosenberg, Westcon managing director Australia and New Zealand, says the year was ‘a good year for us’.

“We’re happy with the way it went, we know where our business is going and where our growth is going to come from.”

Rosenberg acknowledges that the distributor’s revenue was ‘challenged’ by the changing purchasing models, and says the company expects those challenges to continue for the next few years.

“We are seeing a shift to syndicated purchasing and a consumption-based model and that is having a big impact on everyone.

“Where in the past you might have seen big, three-year, upfront deals, now you’re seeing more consumption based models which do affect revenue [at least in the short term].”

The move to smaller deals, and more of them, necessitates automated processes, something Westcon addressed with its digital distribution strategy launched earlier this year.

The company says it is doing more than just brokering cloud solutions, with a complete capability enabling it to digitally, automatically distribute cloud services to end users via reseller partners, providing real-time consumption and billing information.

Rosenberg says selling product is still a critical component for the business, but having services which can be wrapped around complementary vendors is also increasingly important.

Sales revenue for the year sat at $146.5 million, with services revenue of $1.1 million. Interest accounted for $308,079 of the overall revenue for the year.

The distributor’s operating costs were impacted as the company invested in a new SAP system, which went live in May of this year.