Competition is good, said Dale Foster, but staying under the radar is Climb Channel Solutions’ go-to strategy to make tactical moves.
This week Foster, CEO of Eatontown, N.J.-based distributor Climb Channel Solutions, spoke to partners at Climb’s partner conference in Birmingham, Ala., about doubling the company’s revenue by 2026 and being the premier distributor for emerging technology. In 2023, the company generated $1.26 billion in revenue.
“Our goal is to double the business by 2026. We’re going to double down on what we’re doing and we’re going to become more efficient,” he said.
“We move fast; we’re very agile,” he added. “We have really short supply lines of information inside the company, and we want to keep it that way. From myself to an inside rep is only three levels.”
And for what MSP partners can look out for, Foster said they’ll see more emerging products on a quarterly basis.ADVERTISEMENT
“We’ll also be pruning vendors that just didn’t take off or didn’t have the funding levels that we wanted to have or they needed to have,” he said.
CRN sat down with Foster to further discuss competition, Climb’s M&A strategy and how the company is partnering with vendors for life.
It was said during your keynote that Climb is going where the competition is not. Can you double down on that?
We’re competing with divisions inside of the bigger distributors that are similar to us, they’re just five layers down. For a vendor to try to get any kind of representation, you’ve got to be big or you’ve got to buy into their big marketing programs. We are that right off the bat. They get tier-one service as soon as they get signed. Vendors say, ‘[Climb] is going to treat us like Ingram Micro would treat Cisco and give us all the resources as possible.’
It’s our approach; it’s our touch. It starts with selling and then our systems, but it starts with speed and efficiency.
Climb’s plan is it double its revenue by 2026. What’s your strategy to accomplish that?
We’re going to be doing the same thing; we’re not changing. We’re going to accelerate certain points and we’ll still acquire companies. We’ve acquired four and we would like to do one or two per year—there are that many targets. If you think about us doubling, half of that will come from acquisitions. If you look at the acquisitions we’ve made, it’ll be very similar to the ones we’re making in the future—companies between $50 million and $200 million in revenue. The only thing that I’ll [give a caveat to is if] there is a tuck-in that’s much smaller. It would be strategic like a services group that will not compete with our resellers but will augment what the vendors want from us.
What is your M&A strategy and can you tease any upcoming acquisitions?
It is in North America and it’s going to be very strategic to what we’re doing. When it comes to strategy, we need to look at companies that are a good cultural fit for us and that fill some of the holes, and some of the holes we have are just talent. If you look at what happened after COVID, we lost 46 people to vendors. So we’re looking for talent all the time, upgrading our talent and expanding it. We’re at 320 employees; we’d love to get to 400. It’s an efficiency play.
Our strategy is culture, it’s vendors. There are vendors that we can’t sign and if there’s [an acquisition] target that has that vendor we always have conversations with the vendors before we actually do the acquisition, if that’s part of the plan. We give them more resources and more reach; that’s what we’re going to keep doing. We have so much headroom, we can double in size and no one still knows us, which is great. We can just keep under that radar and be twice that size. There are no competitors entering that market—we have more competitors overseas than in the U.S.
Why do you like being under the radar?
I think competition makes everybody better, it makes everybody sharper, on their game. If we’re going head-to-head with a vendor, we won’t lose to them. Once [a vendor] transacts with us, we’ll have the customer for life and I want that customer for life.
You said during your keynote you want to evolve Climb’s cloud marketplace. How would you differentiate from Pax8?
We want the same touch that we have today; we just want the efficiency of the cloud marketplace. If you just have Microsoft and that’s what you’re running with on a marketplace, you’re not going to have a lot of customer action. But when you have KiteWorks going on, you still have to sell it every day. We think somebody’s going to have to sell all of our emerging vendors every day. I think that the marketplace is the perfect place for distribution. With distribution you can provision licenses, track your consumption, get tenant billing and white-label it like it’s your own marketplace.
As the CEO, what is your biggest challenge?
It used to be losing a vendor, but that doesn’t happen anymore because we’ve become so entangled with our vendors. Now I want to try to keep our intimacy as a company as long as possible. I want that same intimacy where you know everybody and keep the same DNA through [the company]. That’s a real goal that I worry about, and I don’t want to lose that.
How are you looking at vendors that are implementing AI?
We don’t look at it as exclusively AI. If there was an AI application that came at us, we would want access to your vendors so we can implement our product inside others. There is going to be AI in everything; we see it in everything. If there are specific applications that are more than 50 percent AI or that will automate some kind of system, I would say we’ve looked at it.