For most of us channel marketing is something that doesn’t enter our minds at any stage when we go to buy something. But it’s something that’s involved in almost every purchase we make, in particular a purchase from a multinational.
Channel Mechanics, a company based out of NUI Galway’s Innovation Centre, spotted a gap in this market and has grown exponentially in the last four years. Helped by winning two prestigious awards, the company now has two offices outside of Ireland, one in San Francisco and another in the UK.
Kenneth Fox, Chief Executive Officer with the company, explains what channel marketing is all about. “Big businesses use channels to get their product to the customer. Bigger companies that manufacture in the technology sector for instance where we specialise, stop selling directly to the shops and to consumers once they scale up and go through channels. It makes sense to use a distribution channel for these vendors.”
“We provide the enterprise channel that allow the rapid execution of sales and marketing promotions, globally or locally, through all tiers of the channel without the need to invest in a complex operational infrastructure. We have developed a cloud based platform called channelIT and it’s used to enable our customers to configure, communicate, launch and manage their product and service promotional offers to their channel partners.”
So for instance, when you go to buy a laptop in a technology store, they are a partner or reseller for the host of laptop makers you see on the shelves, from Hewlett Packard to Acer to Dell. This is a simple explanation but it’s one that Mr Fox uses with people who are new to channel marketing or who understandably have never had to think about it before. It has certainly been an advantage that Mr Fox knows what it’s like to work with a multinational, as both he and his team previously worked in multinationals including IBM and Nortel. The company now employs 15 people.
“We worked in multinationals before this and we saw that they were using the channel for themselves to sell their particular product. The bigger companies all had different ways of doing it. There was no overall solution. Certainly we felt that the vendor and distributor of the product had to do a lot of work. Our solution goes a long way to make the process more efficient and easier and gets the product to the reseller more efficiently. It looks at the bigger picture. We saw an opportunity to go out on our own and create the solution and while it has been hard work, it’s been wonderful to get great traction and to receive the awards, which have been crucial.”
The business won an Ulster Bank Business Achievers Award and also a SCCUL Entrepreneurship Award. Both of these awards have been pivotal in the growth of the business. “They are a validation that someone outside the company, someone neutral has looked at our business. They have been hugely important and have helped us greatly.”
The Ulster Bank Business Achievers Awards celebrate the spirit of excellence and innovation that are the hallmark of Ireland’s most successful entrepreneurs. The SCUUL Awards reward entrepreneurship. The latter was presented to the company by An Taoiseach Enda Kenny in 2013.
Success has followed. Their product is fully developed and released to the market with a number of major companies using the solution including Motorola Solutions, Cisco, Zebra Technologies, and Sonus Networks.
They operate solely through the Cloud. Mr Fox recognised that at the beginning there were widespread concerns about cloud technology but he feels that they have gone to great lengths to secure the privacy of their customers’ data. He says, “We went and got an external security expert to do security testing to ISO 27001 standard, which is the highest security standard you can get. Adoption rates to the cloud increased and it became less of a concern for people.”
The industry they operate in is worth 4 trillion dollars every year. They have recently opened an office in San Francisco and are growing the North American sales team there. This is seen as integral to the future success of the business. “That is where a large number of our target customers are head-quartered so it is important to have a base there. But it is mainly a sales office. Our R&D centre will remain to be in Galway.”
The plan is to hire more people to support product sales and they plan to grow to roughly 50 staff over the next three to five years. This would see them accelerate sales and increase their sales and marketing area of the business.
“The product is fully developed and will continue to evolve based on customer needs. We are a very lean company and we will be keen to keep it that way but we aim to hire more staff as we grow sales.”
The biggest dream is to be either acquired by a bigger company or to sell shares of the company to the public via IPO.
Channel Mechanics has huge potential to be a successful export driven company, creating many new hi-tech jobs in Ireland and helping establish Ireland as a Centre of Excellence for the rapidly evolving Cloud-Based Technology Industry.
Mr Fox added, “The company has a clear five year roadmap in terms of a product development, customer acquisition, sales numbers and staff numbers and we plan to execute to these numbers.
“We are extremely excited by the growth opportunities for the company in the global market and firmly believe the company has the potential to become a very large international success story.”
This year’s Ulster Bank Business Achievers Awards is open for entries. Closing date is 25 September. For information visit www.businessachieversaward.com. For more on Channel Mechanics, visit www.channelmechanics.com.