Carson on post-MBO growth

An LDC-backed MBO at Bucks-based Phoenix Datacom in February put the security firm on the road to portfolio expansion and opens up the potential for acquisitions.

Here, Managing Director John Carson lays out a strategic plan that reflects a market in growing need of cyber security solutions.

The MBO saw former UK President of BT Global Services and CEO of Alternative Networks Mark Quartermaine join as Non-Executive Chairman and the appointment is a clear sign of intent. “We are targeting double digit revenue growth and looking to complete strategic acquisitions,” said Carson. “With the support of our investment partner LDC we can scale up at pace. We’re seeing a high demand from organisations wanting cutting edge technology to scale their networks and protect against cyber threats. With LDC’s support we will be able to maximise this opportunity to scale and enhance our product and service offering. The next five years will be exciting.”

Phoenix Datacom was formed in 1984 by Ian Farr and focused initially on the fast growing datacoms market testing kilostream and megastream circuits. The business now specialises in network security and offers a suite of hardware and software products and serves blue chip clients including financial institutions, network operators, media businesses, broadcasters and the public sector. “We play a key role in helping organisations to build, validate and optimise their networks and secure their most critical information,” commented Carson.

We’re seeing a high demand from organisations wanting to ensure they have cutting edge technology to scale their networks and protect against cyber threats

Over the past three years Phoenix Datacom’s revenue has increased by 48 per cent to more than £20 million in the financial year ending March 2020. “In line with the growing pace of digital transformation we have expanded our portfolio to include a cloud SaaS offering which supports the performance monitoring and security of hybrid/cloud infrastructures,” added Carson. “It has been a growth driver for us and we’ve adapted our model to ensure we’re evolving with the pace of change.”

Carson also plans to expand the sales team, build Phoenix Datacom’s hosted Lab as a Service (LaaS) business and he wants to provide more network and security services to customers. He says the recent Solarwinds Sunburst and Microsoft Exchange attacks show that cyber security has to be taken even more seriously if data and networks are to be sufficiently safe and resilient. “We see deception technologies which provide earlier detection of adversaries in customer networks, secure web browsing and managing information/data flows to and from the cloud (CASB) as key growth areas,” he added. “In addition, testing and monitoring security posture – sometimes referred to as breach and attack simulation – is a growing customer need. We also think that Zero Trust Network Access (ZTNA) could be a large accessible market.”

Against this evolving backdrop the company operates in four areas: Visibility solutions for cloud and on-premise networks and large network infrastructure products, application and network performance monitoring, defence in-depth cyber security and network validation and testing. “Over the next few years we see our main growth areas in high speed leaf and spine routed networks, optical switching, security and high speed network testing,” said Carson. “We have an experienced team of technical people and that gives us the ability to spot these new market opportunities and act fast to give us a first mover advantage.”

This fleet footed approach to embracing new market opportunities can be traced back through the company’s history, with two notable developments in particular cited by Carson: The arrival of Ethernet technology and securing exclusive distribution rights for Network General Sniffer Ethernet protocol analysis. “Both turbocharged our growth in the nineties,” said Carson. “Now, the growth of home working as a result of the pandemic has sparked a similar noise in the market. With companies worldwide working remotely we’ve seen an increase in highly sophisticated cyber attacks.

Even with lockdown measures lifting it’s likely remote working is here to stay

“Even with lockdown measures lifting it’s likely remote working is here to stay in some shape or form, which provides a real opportunity for us and the market in general as more comprehensive security solutions will be required by organisations.”

Carson graduated with a degree in Electronic and Electrical Engineering at UCL in 1983 and during his studies focused on high speed communications and fibre optics, an area that has always interested him. So much so that he began his career at GEC and moved to Anritsu, working in the European sales team and eventually becoming General Manager. This led Carson to Phoenix Datacom where he has been Managing Director for 21 years. “I have driven our presence in the market considerably during that time,” he said. “We successfully navigated the dotcom bust, the 2008 financial crisis, the pandemic and completed a MBO during Covid-19. Now, the MBO enables Phoenix Datacom to expand its service offering and identify acquisitions.

“We are also fortunate enough to have longstanding customer relationships which have evolved and driven the success of the business. VARs must also evolve into highly competent trusted advisor’s that provide fully supported solutions with a combination of vendor products while providing first class responsive local support. The latter has become even more important due to international travel limitations associated with the pandemic and we expect this to be even more prolific moving forward.”

Just a minute with John Carson...

Role models?
Steve Jobs for his innovation, Agilent Technologies CEO Ned Barnholt for his clarity of vision, and Bill Gates for the proportion of his wealth he has donated to good causes.

What talent do you wish you had?
To sing! And to predict the future accurately. I should have bought those bitcoins!

Tell us something about yourself we don’t know:
I am a fan of 1970s Triumph cars.

The biggest risk you have taken?
Investing in Phoenix Datacom at the height of the dotcom bust, one of the worst industry-specific recessions ever.

Your main strength and what could you work on?
My greatest strength is my natural clarity and understanding of what has to be done to meet customer needs. I could definitely work on delegation.

Industry wish?
Increasing the efficiency and energy utilisation of data centres.

If you weren’t in IT what would you be doing?
I’d be an architect or airline pilot.

How do you relax?
Playing tennis, repairing my 1977 Triumph Stag and travelling.

Your biggest opportunities:  
High speed routing solutions, optical switching and zero trust network access (ZTNA).

Industry wish:
To simplify business systems by more automation and integration.

Best piece of advice you have been given:
Establish a commitment culture, where people invariably do what they say they will do.

What could you not do without in your job?
Technical experience.

Top tip:
Make yourself unique by building expertise, combining solutions, and adding complimentary services.

Share this story