SMART CEO: 'We spent a lot of money to recover our position'

Outgoing CEO declares SMART has recovered its UK position and now has a 65 per cent share of the UK's interactive whiteboard market

SMART Technologies has quadrupled its market share after a difficult 2016 which saw it overhaul its UK channel structure, according to outgoing CEO Neil Gaydon.

Speaking to CRN at the BETT show in London, Gaydon claimed the vendor now has a 65 per cent share of the interactive whiteboard in the UK after enduring a difficult spell that culminated in its largest UK distributor Steljes going bankrupt.

Since then the vendor has embarked on a recovery mission that has seen its acquisition by Foxconn and the introduction of a new channel model in the UK - working with distributors Crystalised, Midwich and Westcon.

"It's really only been nine months [since Steljes went bankrupt] so to do what we've done in nine months is testament to our people and our channel," he said.

"We got great services sorted out; we got distribution sorted out; we picked up all the warranty costs that were abandoned before; we fixed problems as fast as we could; [and] we had our top people over from Calgary helping the new UK team get up and running. We spent a lot of money to recover our position.

Distribution changes

Gaydon explained that SMART had already made changes to distribution before Steljes went bust, but the timing of the bankruptcy left the vendor "scrambling" to hold its UK business together.

Since then, he claims, SMART has quadrupled its UK market share and recovered a market position he said was dwindling under Steljes' distribution.

"When you've got a distributor that's working against you they're obviously driving you down and that was obviously happening over the period before they changed to Avocor," he said.

"It's quite clear that that's what the plans were but we found that there was a demand in the channel for SMART to be successful again."

Speaking to CRNlast year Steljes boss Nigel Steljes claimed that SMART wanted to "move us from being a VAD" which was "just too big a shock for a company to survive".

Following the breakdown of the Steljes relationship, Gaydon said that SMART has looked to mimic its US model in the UK, by taking its services direct to resellers, not through distribution, and putting more SMART employees "on the ground" to assist schools with technical training and financing.

The ‘classroom-as-a-service' solution was also launched, which looks to replicate the subscription models seen in the enterprise space.

"If you had a company of a thousand people you'd have an IT department and you'd be strenuous as to what is going into that company, and you'd more than likely have a finance package in place," he said.

"Schools on the other hand are going from feast to famine with budgets; they don't build in anything for training, or very little; and they have a free-for-all of what people can buy or use.

"We brought in a revolutionary funding model where schools instead of having to pay out big lumps of money can spread the cost over a number of years and because SMART boards depreciate the least of any technology in a classroom it means it's very cheap to finance that."

Power of Foxconn

Soon after the Steljes saga SMART announced it would be acquired by hardware giant Foxconn for $200m.

Gaydon said that the size of Foxconn's panel manufacturing will allow SMART to maintain the quality of its products but ship at a far higher volume and cheaper price point.

SMART recently launched a new premium 7000 series, which Gaydon said has allowed its previous flagship 6000 series to become a volume product; and a non-touchscreen 2000 series has also been launched, which is aimed at schools with smaller budgets. Gaydon said these changes would not have been possible without the manufacturing power of Foxconn.

"We all know that in five years or less this market will have morphed into cheapest and best - they'll be one or two that are the best and they'll be a handful that are cheapest," Gaydon said. "This will all whittle its way down.

"It's very easy to get a touch panel off of the shelf from China and bring it in, but the clever bit is coming up with a solution that is really well designed for teachers and students, but also is cost effective."

Handing over the baton

Gaydon will soon leave his role as CEO to become a director on the SMART board, with Foxconn CSO John Hui taking the reins.

Speaking alongside Gaydon, Hui said that, although the education sector will only make up a small fraction of Foxconn's business, he is becoming increasingly aware of its importance.

"If you look at the education business from the point of view of Foxconn it's very small," he said.

"We build 30-something million PCs so it's very difficult to have any school district that will excite us and make us say ‘wow you're a big customer', but we look at it and say ‘this is a very important industry'.

"It's not just for money. During these few months following Neil I've realised that education is about passion, it's not just maximising profit."

Hui was however more ruthless when considering SMART's competition in the space, saying it will be very difficult for some of the smaller vendors to compete once it becomes a price war.

"When you first start you get a lot of small companies that jump into the market," he said. "Without the backing of the major guys in the industry they will go away because once it becomes a price competition they just cannot sustain and compete.

"With the SMART-Foxconn relationship we know we can compete with anyone in the market all day long. Not everyone in this market can say that. If you don't have that kind of relationship or backing that's really hard.

"When I walk around the [BETT] show I can tell a lot of them won't be around in a while because if you have no access to panels it's very difficult. If there's a shortage [the panel suppliers will say] ‘I just won't ship', and then you're done, but we have our own panels."

Reflecting on his four years at the top, Gaydon said he is convinced SMART will is in safe hands.

"I was here four-and-a-quarter years but my plan was always to go home [to Leeds], because Calgary is a long way from home," he said.

"My job was to turn the company around and get it to a safe harbour. It couldn't have been more thrilling for me when I started talking to John as to what this combination can do because a lot of teachers and students rely on SMART."