Logicalis CEO reflects on innovation, sustainability, and order backlog for a strong 2023

Bailkoski credits Logicalis' 2023 success to innovation in managed services, sustainability go-to-market, and reducing order backlog

Innovation in managed services, such as Logicalis' Digital Fabric platform, an expanded sustainability go-to-market, and the unwinding of the order backlog were some of the main drivers of Logicalis' growth in 2023, CEO Bob Bailkoski says.

In an exclusive interview with CRN, Bailkoski explains that the innovations the MSP made this year have resonated with the market to boost performance. For example, the launch of the Logicalis Digital Fabric platform, which provides baseline SLA management, with additional business insights such as metrics on security, cost, user experience, and carbon footprint.

He also points to the MSP's expanded sustainability go-to-market as a highlight of 2023.

From upfront goal setting to device refresh options, carbon offset policies, and ethical disposal, Bailkoski praises Logicalis for its regular provision of stats through managed services.

Backlogs unwind - friend or foe?

The unwinding of the order backlog as supply chain issues resolve is perhaps the most interesting trend Bailkoski lists because it points to a driver of growth for 2023, but also potentially a challenge.

"Our high backlog has contributed to great revenue and profit this year.

"However, customers aren't placing as many new orders as we fulfil old ones.

"During supply chain problems, customers double ordered. Now, they're receiving those kits ordered years ago and don't need new ones yet.

Nevertheless, he remains confident that purchase orders will normalise over the next six months.

He also points to upcoming elections as a player in the reduction of purchasing.

"There has been some uncertainty in our US and European markets, including the UK, due to upcoming elections.

"Typically, customers wait to see election outcomes before making purchases, creating some uncertainty. However, this has been limited as it hasn't been a major issue for us."

While these have been noticeable trends in the market, Logicalis' strong customer relationships worldwide have meant they have not been impacted majorly, according to Bailkoski.

"Customers consistently rely on us to support their transformation needs. This trend may become more apparent in 2024 with election cycles, but currently there are no alarming macro trends.

"Things are good in our space because of those strong customer relationships."

2024 and beyond

At its core, Logicalis remains a networking company, Bailkoski says.

"We support datacentres, cloud, security, and other transformations, but our key competence is networking.

"A key trend impacting 2024 will be AI growth and the huge amounts of data it generates.

"With automation expanding, networks must expand to transport all that data. As clients adopt AI, they'll need support to handle the network volume needs.

He explains how companies must prioritise data protection and security with AI to prevent breaches.

"I expect security to remain a big theme in 2024."

He also points to sustainability as a key for the future.

"We're on the cusp of a major business transformation around sustainability."

A 2023 Logicalis study with 1,000 CIOs, in fact, found that 92 per cent see a clear link between ESG, sustainability and enterprise value.

"As CEOs and shareholders focus more on it, I expect that to increase. We've positioned ourselves as a leader there, which should benefit us in 2024."

Despite the challenging macro environment, Bailkoski is optimistic about Logicalis' growth ambitions in 2024.

To achieve them, he explains that there are opportunities in security growth to take advantage of.

"Significant goals to improve capabilities in-house and expand security offerings, this will be a key 2024 goal," he explains.

"Our managed services business has grown tremendously the past 12-24 months, driven by our Digital Fabric platform. We expect strong managed services growth next year in skills and performance.

"Of course, we aim to grow overall. But our 2024 objectives focus on delivering sustainable outcomes for customers in security, networking, and managed services."