Observations on a changing market

By Graeme Bailey, managing director, Business Micros.

Business Micros is enjoying one of its most successful periods ever. On the PVCU side of our business, we achieved 3% growth last year on what was another record turnover. 1,065 of the 1,407 fabricators listed on Insight Database’s list of UK currently use our software, giving us a very impressive 75% market share.

We’re obviously in a very good position then to be able to identify the trends happening in the software market and even maybe to predict how the market will develop this year.

Probably the biggest trend is simply the number of fabricators that are now switching software provider. Up until a few years ago, there was a real sense of inertia in the software market with most companies judging that the gains to be had from changing provider were probably outweighed by the risks.

That is certainly not the case anymore. We picked up some very significant customers last year including Doorco, Flair, Quickslide and Vulcan, and the volume of work we are currently quoting on for fabricators producing more than 1,000 frames per week suggests that trend will continue throughout much of 2018.

The biggest factor prompting many of these companies to switch to Business Micros is our EvoNET business management system. This is driving the vast majority of our growth from both new and existing customers, and it is arguably now so capable and so powerful that companies that are not using it find themselves at a significant competitive disadvantage.

EvoNET gives fabricators an unrivalled level of knowledge and control over their businesses. A paperless factory, with seamless links between order processing, production, quality and despatch delivers obvious improvements in efficiency; but it is the dashboard and reporting functions that make the biggest difference because they enable businesses to identify key areas for improvement.

The other factor is that many fabricators are now effectively looking to use Business Micros as their in-house IT department. As the market in PVCU in particular has got increasingly competitive, we are seeing lots of companies cutting back on their in-house resource and instead looking to outsource that IT requirement to software providers like us.

It is worth noting that, even in our 35 largest customers, whom we classify as Category A, only fove have an in-house IT resource. Our most experienced software technicians now spend several days per month with lots of these Category A companies doing consultancy work and creating bespoke versions of our software for them.

Looking ahead, I don’t expect to see very many fabricators switching systems supplier, and prompting a requirement for new software. Our analysis shows that this happens quite rarely now. When systems companies report customers to us who are no longer buying from them, it is almost invariably because they have gone out of business or are buying in instead.

In 2017, around 50 customers disappeared from our database, and the fact that we still achieved a record turnover indicates that the average spend per customer is going up. In reality, our projects are certainly getting bigger as the largest fabricators in the market continue to make the biggest investments.

For us that means we need to continue investing in our team so that we have the capacity and the capability to respond. We added four new team members at our Newton-le-Willows sales and installation office in 2017 and two at our Penpont programming centre. We know that we have to keep pace with the demands of the market if we are to retain our dominant positon, and we are determined to do that.