New Softcat CEO Graham Charlton: 'Customers are looking for value and we have to deliver on that'

Freshly appointed CEO chats all things challenges, hopes and targets as he settles into his new role at Softcat

As customers' budgets face economic pressures they are looking at price and value as the influential elements on decision-making, according to Softcat CEO Graham Charlton.

In an interview with CRN, following his recent appointment to the big job, Charlton explains Softcat is facing the challenge of reorganising the company to line up in a way that makes sense to customers.

"If customers want to talk about their IT infrastructure, they want to do so in a way that makes sense to them."

"They don't want to talk to an on-premise datacentre team separately to a public cloud specialist. They want to have that joint up conversation about solutions.

"So the challenge we have as technology evolves in the way it is, is just to make sure we're reorganised effectively against that, and not trying to get them to dance to our tune."

He says this will take a bit of reorganisation, lots of investment, slower sales cycles, but still "bags and bags of opportunity".

Charlton took the reins at Softcat on 1 August 2023 but says he had been warming up to the big shift for some time.

He explains: "When Graeme Watt joined as CEO five years ago I'd already had a conversation with the previous CEO and the board about me taking over as CEO but it wasn't the right time.

"When Watt joined, it was kind of within the context of me being on the succession plan. I've learned from Watt tonnes, but over five years, not just over the one year of handover."

Handing over the keys

During the time spent closely working with Watt, Charlton learned the way to the company's success.

One key element for Softcat, he explains, has been investing in the reseller's offering.

"Today, I think we have the broadest and deepest technical offering for our customers and what we can do and the depth of talent we've got, I don't think anybody can rival that."

He adds Softcat is growing headcount every year in double digits, bringing in new skills in cloud compute, cybersecurity, hybrid infrastructure and more.

"Knitting all that together, our ability to move with our customers and vendors agenda because of that organic growth and investment is just unrivalled."

Charlton also claims culture has been a definitive key to success for Softcat.

"It's around how people feel about the company. They believe the company cares about them because we do they care about the company as a result.

"We have an informal environment where people are free to express themselves. They enjoy working together as teams. And because of that, our customers feel that they are getting a level of care from people who are enthusiastic about helping our customers, and that will always be our unique selling point.

"So, continued investment around that culture, listening hard to customers, and being prepared to change and never standstill. Those are the things I think have always set us apart."

Setting top priorities

One of Softcat's top priorities is listening to customers and responding to their requests, Charlton believes.

He explains the reseller will be investing in accommodating customers requests and helping them tackle the current challenges they are facing.

"Public cloud, consultancy, design, architecture, implementation, management, those are the newest skills that we're building and scaling, and we're always investing in cybersecurity and cyber threat landscape."

He says the British reseller is also investing heavily over a prolonged period in its own systems.

"We've just changed the finance system recently. And we've got some other system changes that we need to roll through.

"And that's giving us proper contemporary database architecture.

"We're generating the capabilities to do new and exciting things with data analytics of ours for ourselves as well. That'll inform account managers on where opportunities might be with customers."

In the first quarter of 2023, Softcat's run of 68 profit growth quarters came to an end and we asked what that meant and if the company was planning to shift some its priorities.

Charlton explains Softcat still grew its top line - so income continued to grow - but operating profit was down due to a return of pre-pandemic costs.

"Things we couldn't do during the pandemic - incentive trips, hosting our annual kick-off event, customer events and internal staff events - so a lot of cost coming back into that.

"And then the effect of all of the wage inflation that we put through as well coming into this year, so we had real strong cost growth in the first half."

He says the company grew costs by 30 per cent in the first half of 2023.

"Now that was deliberate, we could have held back on recruitment and investment to try and manage that. But in the end, operating profit only went backwards by a couple of percentage points in the first half, we could easily have avoided that but it would have meant not investing in the right way for the future of the business.

"So those were the reasons behind it."

A dream come true

Rounding up his thoughts on the channel, Charlton concludes: "I think the industry that we're in and the times that that we're heading into have a massive opportunity. I wouldn't want to work in any other industry than this, and I certainly wouldn't want to be in any company other than Softcat.

"We're really optimistic and I think the channel is in great health.

"I think our vendors have got some really exciting and innovative products coming to market and we just want to make sure we're the partner of choice for them and for our customers."