Why Irish tech businesses are going global

By Gerry Sheldrick

Ireland is unquestionably a magnet for investment from some of the largest tech companies in the world. And like London’s reputation as a global financial centre, the draw of Dublin for technology businesses has become self-perpetuating.

Irish tech businesses- Growth can be difficult 

The pull factors are highly compelling of course, but sheer momentum has also entrenched the habit for companies and investors around the world.

US direct foreign investment (DFI) in Ireland was $8bn in 2019 alone, much of it in the technology sector. Chinese DFI is increasing faster – by 50% in the last year – as evidenced by TikTok’s recent $500m Dublin data centre announcement.

Even more crucially for the long-term prospects of the national economy and skills base, these inward flows of capital encourage the growth of indigeonous supply chains, professional services providers, and self-made startups.

But for all the significance of Ireland’s tech economy punching above its weight on the world stage, the reality for Irish tech businesses is that expanding globally can be very difficult.

Local markets limited by scale

At the route of the problem is Ireland’s relatively small internal market. Irish tech businesses selling to the Irish enterprise sector quickly reach a limit to their scale.

Contrast this to German or French tech companies who, when it comes time to expand beyond their borders, will have generated what could be described as ‘escape velocity’.

Accordingly, Irish tech ‘vendors’ that create their own intellectual property have to take a more global view of their business plans, earlier.

This doesn’t always succeed without significant investment, which is why the sector is always at risk of a ‘brain drain’ away from Ireland to the UK, US, or elsewhere.

Systems integrators and IT service providers – the independent tech organisations that consult with business customers to define, implement, and operate their technology solutions – number around 120 in the whole of Ireland.

The village-like business community here is often touted as a benefit in DFI discussions, and it undoubtedly is, but the effect on these providers is that there is only so much work to go around.

Tapping into global opportunities

“Fortune favours the bold” as the old saying goes, and so it falls to local IT integrators and resellers to go after global opportunities to fuel growth.

This is where Irish firms are at an advantage; many will have customers on their books with global operations of which the Ireland dimension is only one part.

The challenge is in convincing these customers that you have the capability to take on their global technology projects – not just the needs of the local subsidiary.

Integrators can, and are, achieving this by choosing which distributor they partner with, higher up the supply chain.

Unlike in commoditised markets like agriculture, groceries, and consumer electronics, where distribution is a byword for basic warehousing and logistics, technology distributors in areas like cybersecurity and cloud infrastructure add significantly greater value both to the resellers they supply to and the vendors they source from.

This includes providing access to global project management, implementation, and delivery capabilities, as well as leasing options that mean small-time credit limits don’t close off big-time sales opportunities.

Global technology vendors can never spend enough time and effort working with individual integrator/resellers partners – there are just too many for them to work beyond the very largest.

Instead, they appoint value-add distributors to not only fulfil market demand but also actively generate business and create adjacent services that resellers can provide alongside the products.

But why should any global business buy technology from a local integrator/reseller when they can get it from a global-scale provider instead?

The answer lies in the kind of technology solutions and the way in which it is consumed. The pace of innovation in areas like cyber and infrastructure is such that the most valuable new solutions for business are from startups and other pre-IPO vendors rather than the likes of Cisco and Microsoft.

Smaller players who (aided by their distributor) identify and develop skills in these new technologies are well placed to carve out niche offerings far more quickly and credibly than much bigger competitors.

As for technology consumption, we’re seeing a tremendous growth in the so-called ‘subscription economy’ in every aspect of business procurement, and this has transcended into technology solutions thanks to the arrival of cloud-based, on-demand IT delivery platforms.

What that boils down to is a big shift away from asking companies to purchase equipment, licences, and services in lump sum amounts to a new approach where virtually everything can be delivered as a monthly subscription.

That’s very attractive to customers, but requires both technology manufacturers and the independent integrators who sell and supply solutions to completely change their business models.

On-demand platforms like Exclusive X-OD change all that, making it fast and simple for resellers to go beyond their borders and tap into global opportunities.

About the author: Gerry Sheldrick, Country Manager

Gerry Sheldrick has spent over 30 years working in the IT sector with the last 15 years focussed on cybersecurity architecture, hardware, and software.

With a keen eye for ground-breaking technologies, Gerry has focused his time on disruptive technologies some of which were in pre-IPO status.

As sales director for NextGen, a true value-added distributor, Gerry established a sales base for some now household names.

In 2018 he oversaw the acquisition of NextGen by Exclusive Group and was a guiding hand in ensuring the smooth transition for both partners and end-users.

Since assuming the role of country manager at Exclusive Networks Ireland, partners, and end customers see a continuation of support and value with a now far more extensive vendor base to support growing businesses.

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