At the start of December Nuvias UC announced that it was selling its hardware business to Northamber for £7.1 million and rebranding as Konekt.
With £28.8 million in annual revenue and 700 customers, Nuvias UC’s hardware and infrastructure division specialises in Microsoft Teams Rooms, Zoom Rooms and hybrid-working ecosystems.
Its acquisition will enable Northamber to expand its existing UC and AV portfolio and enhance its offering with specialist support, provisioning and configuration services, building on capabilities gained through its acquisition of UC and AV distributor Tempura Communications in 2024.
As part of the acquisition, Northamber gains use of the Nuvias UC name, with the remaining part of the original business rebranding as Konekt and focusing on its two higher growth divisions – cloud solutions and services – that together generate annual revenues of £40 million from 400 customers across the UK and Europe.
Here, we ask Konekt CEO Joel Chimoindes for his perspective on the sale of Nuvias UC and his plans for Konekt.
Technology Reseller (TR): In April, you introduced a new divisional structure based around hardware, software and services. Was that done with an eye on the sale of the hardware business?
Joel Chimoindes (JC): Yes and no. The reason we put the divisional With Joel Chimoindes, CEO of Konekt structure in place is that we had different go‑to‑markets, different strategies and different P&L shapes across hardware, software and services.
Previously, everything was lumped together, which made it difficult to apply different strategies and go-to-markets and financial reporting for each of those segments. The divisional structure helped give us clarity on how our software and services businesses were performing, with growth of 20-25%, versus the hardware business, which was definitely underperforming.
TR: And it is that devices and infrastructure division that you’ve sold to Northamber?
JC: Yes. We separated out our hardware business – devices and infrastructure – and have sold that to Northamber, which is a fantastic home for it, by the way. Over the last year, I’ve got to know Northamber and its Chairman Alex Phillips. They are a fantastic specialist distribution business and really fit into this layer around the intelligent workplace with the portfolio they already have around UC and VC, plus security and some networking and infrastructure as well.
So it’s a great home for the business. That’s from a strategy perspective. The other thing that’s been great for us as we’ve got to know Alex and his team is that Northamber is also a great fit culturally and ethically. Alex has the same passion as I do for specialist distribution, so it felt like exactly the right deal for the business and for its people as well.
TR: Why have you chosen to sell the hardware business?
JC: The reality is that business in the hardware collaboration market that we existed in, which did experience some fantastic growth during Covid, has been really tough in the last couple of years. Despite us still having really good market shares, we were getting to the point where we weren’t making any money out of that hardware business.
Our processes were good, but the overall costs in that business, and I don’t mean people costs, but operating costs, were too high. We needed a partner who could take that business and build into what they’re really good at already. Northamber owns their own operations, their own logistics and warehouse, whereas we outsource that today. They can provide the right model and then layer the value-add on top.
TR: What impact has the sale had on your headcount?
JC: Twenty-five people have gone to Northamber as part of that purchase, and Alex and I have an agreement, and there’s a contractual one as well, to ensure a smooth transition of the business for customers. It isn’t a case of handing over the keys and moving on. We have a responsibility in the coming months to make sure we help Northamber achieve a smooth transition.
It sounds like a cliché, but our motto is zero customer disruption. Customers can still place business with us today, in the same way they could previously, on account or anything like that, and we will act as an agent for Northamber to make sure that business is processed in the right way. So, zero customer disruption.
TR: How many people are now employed by Konekt across the UK and Europe?
JC: About 60. To be absolutely clear, the Northamber deal is a UK-only deal. Our plan is to exit hardware in Europe in a controlled fashion over the next three to four months, so we can then focus on the Konekt strategy, which we’re really excited about.
TR: And what’s happened to the Nisha AI virtual assistant in this transition and rebrand?
JC: It’s a great question. Konekt isn’t simply a rebrand of Nuvias UC; we’re adopting a whole new philosophy inside the business. We sat down and asked what would a startup look like in this environment? What would a startup look like in cloud communications, software and services for the channel? We came up with a strategy around that. The reality is Services is a £40 million GII business, serving 400 customers, so by definition it can’t be a true startup.
However, our philosophy around how we work, around how we act, around our systems is like that of a startup. We’re rebuilding our systems and putting AI and automation at the heart of what we do. Also, our business is now much simple in terms of its transactional model. So, if we take that AI, automation, digitalisation approach, and then wrap around our magic sauce, which is our technical capability, we’ve got something that’s really fantastic for the industry. Re: your Nisha AI question, that is absolutely part of what we are doing inside Konekt, because we still absolutely need that capability.
TR: What are your priorities for the new business. Are you going to go after new vendors? And are there any particular areas you’re looking at?
JC: The three priorities that I’ve set in the business are to selectively expand our vendor landscape – we are deep in conversations with a number of new vendors already and that will continue as we expand our ecosystem around cloud communication; to launch new services to extend the capacity and the capability of the channel – so we’ll start to build out more services around AI-related subjects for cloud communications, which is really exciting; and to replace our systems with new one ones – our ambition is to have the first version in place at some point in April next year.
TR: Where does the name Konekt come from?
JC: Konekt was a name that was used for a project in the business a very long time ago, way before my time. We looked at it. We liked it. We thought it fitted really well with the rebranding and what we wanted to do; we can play with the word Konekt quite a lot in our branding and messaging; and it sums up what we want to do with our partner community and with our vendor community.
TR: What does the sale of your hardware division say about distribution today, because there’s always a conflict between people wanting specialists and people wanting fewer suppliers to deal with?
JC: Let’s be clear, everyone has talked about the death of distribution for the last 25 to 30 years, and it hasn’t happened, and it won’t happen because distribution continues to evolve to meet the needs of vendors and resellers. As long as distribution continues to evolve, it won’t die.
But if you stand still and don’t meet the needs of your vendors and your customers, of course you’re at risk of dying. With Konekt, I really believe that we are evolving to meet those needs and are in a fantastic place to continue those growth rates I spoke about previously. When it comes to the separation of the hardware business, what we’ve done is give it to a company that’s a specialist in that area, so they can take the business and help it thrive.
TR: What are the needs of your customers and how do you address them?
JC: If you’ve got a European distribution business, what you want is a one size-fits-all model. But that won’t work in cloud communications right now because the countries we serve – the UK, France, Germany and Benelux – are at different stages of cloud communications adoption. In the UK and the Netherlands between 58% and 60% of end users have already moved their communications from an on prem to an off prem scenario.
In France and in Germany, the penetration rate is about 20 to 22%, so the go-to-market in those markets will be different. How we address our resellers’ needs is by giving them the tools and services and vendors to help them move their customers from an on prem to an off prem scenario. Places like the UK, the Netherlands and Benelux, and the Nordics, have entered a second phase in which people are moving from one cloud platform for communications to another, so our role there is slightly different to what it would be in France and in Germany.
To learn more visit: www.konekt.techQ
Be First to Comment