Pragma's Chairman and mega-channel supremo David George has achieved great industry recognition and stature as a giant in UK comms distribution. Here's his story...
For a Chairman less than two years into office and presiding during the worst economic slump in memory George has managed to pull off a remarkable triumph in building up Pragma. This 'David' had already established himself as Goliath in the comms channel so there were few doubters when he set-up Pragma along with two former colleagues just a slingshot away from where his career in distribution began in 1990 with Crane Telecom. Prior to the advent of Crane George had many years of comms experience under his belt and believed that the reseller channel would become the dominant route to market.
"I spent the early part of my career working in multinationals such as Sony, EMI, ITT and STC with ever expanding responsibilities up to divisional management," recalled George. "However, I was becoming increasingly frustrated with my scope to mould a business within the constraints of a corporate environment. So when I was offered the role of Managing Director of newly launched National Telephone Systems - it's main product line was the London range of PBX systems - I jumped at the chance."
NTS was a fast growing international business that went public with full listing on the London Stock Exchange. The business was then acquired by Alcatel and the acquisition reverted George back into corporate life. "I didn't want to be there, and seeing an opportunity with LG to introduce its key system range into the UK market I set up my own business, Crane Telecom. At that time the reseller channel was still in its infancy but it was my belief that it would become the dominant route to market for telecom products and services, and that Crane would become the supplier of choice for resellers."
Crane quickly established the LG brand and in 1995 became the first UK distributor for Avaya (then AT&T) and grew to become the largest Avaya distributor outside of the USA. Crane's revenues peaked at £80 million and the company became the largest independent telecoms distributor in Europe until it was acquired by Westcon Group in May 2007.
"I gave retirement a go but quickly got bored and was lured back into the channel by a long-standing Crane reseller called Redwood," stated George. "I invested in this business in 2008 and despite being faced with the economic downturn we grew revenues by more than 30 per cent over the following three years, with an even greater improvement in profitability. This led to the successful sale of Redwood to Timico in 2011 and I once again had another attempt at retirement."
George kept in touch with a number of old Crane customers who had since become personal friends. They confided that there was little or no added value left in the channel and many felt poorly supported or even let down by their current suppliers, compounded by ever increasing demands to conform to vendor requirements which they did not believe were in the best interests of their businesses, recounted George.
"When playing golf with Tim Brooks in April 2012 , who was a long-serving Crane man and had been running Westcon Convergence UK, we were discussing this and decided there was a clear opportunity to create a new company that would mould itself around the needs of the reseller community," commented George. "We researched the market and decided our vendor of choice was Ericsson-LG which we felt was a sleeping giant in the UK but held leadership in many other global markets."
The former colleagues travelled to Korea to test out their theory and following due diligence they became convinced by the product roadmap and its potential. "By that time we had been joined by Will Morey, another long-standing member of the Crane team," added George. "We then set up Pragma and started sales in September 2012."
Not surprisingly Pragma exceeded its year-one target and outstripped the first year's sales within five months of its second year in operation. Pragma passed its break-even point after 10 months and is exceeding profit targets, enabling the company to fund future growth. A central part of Pragma's growth strategy is its focus as the sole distributor for Ericsson-LG in the UK and the company was awarded European Distributor of the Year at Ericsson-LG's 2013 global partner conference.
According to George, Pragma is more than a distributor. "Ericsson-LG has no people in the UK, therefore the go-to-market model and execution are entirely within our control," he explained. "Our overriding philosophy is that our business should be designed and run based on the needs of our resellers. To ensure that we achieve and maintain this ethos as we grow we created the Pragma Partner Council. This is a forum to gain feedback and approval from our resellers on all aspects of the business including policies, processes, products and even pricing. We also hold an annual reseller conference which last year was attended by more than 140 of our resellers, where together with Ericsson-LG senior management we presented the product roadmap, new products and market direction."
Pragma has set the date for its partner conference this year - October 9th in London. A centrepiece attraction will be the unveiling of a new UC platform from Ericsson-LG together with a product roadmap which includes cloud-based services. "Later in the summer we will launch iPECS UCP, a new range of VoIP call servers with embedded UC applications that scale from five to 2,400 users," said George. "Our efforts will then be applied to the introduction of a cloud-based iPECS solution, the details of which will be shared at our conference."
Pragma's priorities for 2014 also centre around a complete refresh of the Ericsson-LG iPECS range. This began with the introduction of iPECS eMG80 at the beginning of the year, a new and cost-effective hybrid solution for users with five to 50 extensions. "This product has been successful and well received by our existing resellers and has also attracted many new resellers to the Ericsson-LG brand," added George. "It is important to stress that our goal is not to recruit infinite numbers of resellers, but rather to operate a controlled distributor policy whereby we can grow while protecting our resellers' margins at the same time."
Pragma also offers resellers margin opportunities in connectivity. With the adoption of SIP being a key trend George believes that the combination of SIP trunks together with a highly featured iPECS IP-PBX offers a stand-out solution for most businesses, as opposed to relatively expensive and featureless hosted offerings that use the reseller channel as little more than sales agents, and so risk losing customers in the long-term.
"We've helped our resellers to adopt SIP technology more rapidly with a combination of dedicated sales and engineering training, SIP set-up guides and even our own SIP trunk service through our joint venture company Pragma Networks," added George. "This means we can provide end-to-end compatibility and support to our resellers."
As a result of the new products from Ericsson-LG together with marketing programmes and tools from Pragma plus its network services, George says a great many of Pragma's resellers are growing rapidly. "It's Pragma's strategy to ensure that our resellers are always equipped to compete and win as markets evolve," stated George. "It is our plan to be a major player in the market and I believe we have the products, the team and the resellers to achieve huge gains in market share.
"The consistent feedback I hear from resellers is that they no longer feel valued or respected by their suppliers. In many cases they are seen as nothing more than a route to the end user rather than customers in their own right. I believe every reseller principal is an independent business person who wants to be acknowledged as that, rather than being dictated to by large, faceless corporate organisations."
George believes in building close personal relationships with resellers, and making sure that their needs always shape Pragma's strategy is a mode of operation that cannot fail, noted George. "We get to know our customers better by surrounding our formal events with a great deal of social activity," he added. "We also run regular incentive trips, host sporting events and generally take every opportunity we can to spend time with our customers. We want our customers to feel important, because they are."•