EXCLUSIVE: Africa’s growth potential excites cybersecurity partners
Global cybersecurity specialist for digital infrastructure Exclusive Networks is eager to secure its presence in Africa and tap into what it believes to be high growth potential within the continent’s cybersecurity market. Its recent acquisition of South Africa-based cybersecurity specialist distributor Networks Unlimited signals the start of a new chapter for both companies as the combined outfit looks to empower its channel.
The acquisition means that Exclusive Networks will leverage Networks Unlimited’s presence in 38 national markets on the continent, while Networks Unlimited will benefit from Exclusive Networks cybersecurity solution knowledge, experience and its understanding of the global marketplace.
The deal has been on the cards for several months and back in August the companies announced that the basic terms of the transaction had been agreed upon.
A few days after announcing the deal this month, Exclusive Networks CEO Jesper Trolle and Networks Unlimited’s Managing Director Anton Jacobsz spoke to ITWeb Africa about the market and the strategy it has in place.
The basic premise of the plan is to capitalise on global cybersecurity market drivers. These include ongoing digital transformation within companies that are leveraging technology as a competitive advantage, the hybrid work model as well as heightened awareness of an elevated threat landscape and constant risk.
“The market is strong and we expect the market to continue to be positive,” said Trolle. He said according to Gartner, the compound annual growth rate for the global cybersecurity market as a whole through to 2026 is pegged at about 9%.
From a local perspective, Jacobsz said the local market has the advantage of seeing what happens abroad and then learn from what works and what doesn’t.
“An interesting trend is that we generally track in our region twelve to eighteen months behind what’s happening in Europe. In terms of the trends and the tracking of what’s happing in Europe, hits us a lot later. So we kind of learn from what we are seeing overseas, and start preparing for it at a local level. If you look at the amount of attacks that happen at government level over the last couple of months here locally, the impact it has and the heightened awareness it (has) had in terms of implementation of committees for POPI and reviewing data breaches… I think it’s a massive focus for our country locally.”
With this growth in mind and expected increase in demand for service, support and solutions, Networks Unlimited and Exclusive Networks are gearing up and investing to support channel operators.
This requires a united, streamlined operation.
Trolle added: “Networks Unlimited is operating very successfully in the Africa marketplace today and while Exclusive Networks has a global strategy, Africa will fall under this and there is nothing in the plans of Anton and the team that contradicts this. We see this as an opportunity, with similar to a lot of other acquisitions that we’ve done, where we are acquiring companies to expand our global footprint. We see this as an opportunity to help Anton and the team further accelerate the growth of the business they are in.”
He said this will be done by leveraging best practices and services developed across issues and networks, by helping and accelerating the on-boarding of potential new vendors to the portfolio, and through global customer relationships and supporting these out of Africa to a bigger degree than has been the case in the past.
Both Trolle and Jacobsz feel the value proposition is the combined of the strengths of each company. They underline Network Unlimited’s regional focus and deep technical skills, and Exclusive Networks’ focus on cybersecurity specialism and related services, as well as its global reach.
Empowered edge
The partnership is looking to empower businesses to become agile and make the decisions that are right for their business, overlaid with some global functions and resources to drive expansion.
Trolle said this is what they refer to as 'empowered edge' and added, “For me it’s all about being nimble, focused on constant innovation, what we do for our customers, for our vendors, finding new ways to create value for them rather than just being a traditional distributor that sells boxes, which is not our model.”
Jacobsz said, “The likeness in operations and focus on being a value added distributor has definitely created the opportunity for almost an immediate synergy in the business from a management and leadership style. From the original engagement and discussions around the acquisition of the business to even now in the integration processes, we are dealing with people who are all very like-minded and are about improving and performing at the best possible levels.”
Externally, from a partner perspective, agility or nimbleness is hugely significant within the value added distributor’s environment.
“With the three shareholders remaining in the business, fifty to sixty percent of our time is about being engaged in large, complex opportunities regarding structures, pricing and c-level engagement … and that’s where the value add comes in and the ability to make decisions very quickly, which enables us to be a lot more competitive and our partners to be a lot more competitive – and then we end up driving our vendor sales a lot better. So that to me is where we saw a lot of synergy from an organisational point of view. From a values perspective we are very similar,” said Jacobsz.
Additionally, the companies share synergy in terms of product. Jacobsz said the top three products in terms of revenue are the same products that Exclusive Networks is driving.
Logistics challenge
The companies acknowledge that logistics represents one of the biggest challenges in Africa.
“Having importer of records in various regions to facilitate global roll out and not only from Europe into Africa, but from our big customers in Africa into Europe where they’ve got operational centres now gives us the ability as the distributor to act as the importer of records both in Europe and in Africa which is a massive plus for us in that particular environment,” said Jacobsz.
Trolle said cybersecurity markets the only part of the IT technology stack where you have more than 3000 vendors today, and while there is a lot of M&A, every year there are about one hundred new market entrants coming to market with supposedly better solutions for known business problems or new solutions for new business problems.
He added, “There are a lot of vendors coming… at Exclusive Networks we have a team of people that are evaluating vendors constantly and look at elements like the solution they are offering, the value proposition, the technical fit with the portfolio we have, also the management team of the vendor… and then we do an assessment and then discuss with the vendor whether we should consider on-boarding them and then potentially rolling them out in a couple of markets to sort of prove out the business case.”
Going forward, both Trolle and Jacobsz plan to engage the market directly to explain how the acquisition will benefit business and help them generate growth.
Jacobsz, and the two co-founders, Craig Copeland and Wayne Bird, will remain shareholders and will continue to manage the company together with The Love Trust, the company’s Broad-Based Black Economic Empowerment (B-BBEE) partner in South Africa.
Following the acquisition Exclusive Networks Africa will remain a Level 1 B-BBEE company.
Networks Unlimited will operate under the Exclusive Networks brand once integration work has completed, which is expected in early 2022. The company will form part of an enlarged Middle East & Africa (MEA) region headed by Regional Director, Nathan Clements.