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Q1 What is the range of net profit % for limited risk distributors in the United Kingdom selling a saas product. The distributor preforms routine sales and marketing functions in selling to local customers, bearing no non-routine business risks owing no non-routine intangible assets.
Most major SaaS developers such as Microsoft, Cisco, Google, Atlassian and Salesforce use Value Added Resellers for distribution of their products. The net profit percentage for these companies in the UK ranges from about 2% to 6.3%.Below you will find a deep dive of my research.
Value Added Resellers (VAR) of SaaS platforms add additional services such as consulting, troubleshooting and infrastructure services for their clients. Some examples of SaaS VAR companies in the UK are Q Associates, Technology Services Group, Grey Matter, Softcat and Proact.
Q Associates offeres SaaS products from IBM, Oracle, Cisco and Microsoft as well as specialty platforms such as NetApp, DDN, Veritas and VMware. The company has about 70 employees. In 2016, it had a revenue of £27.5m with a profit margin of about 2.0%
Technology Services Group is headquartered in Newcastle. The company offers product solutions including Microsoft, Sage, Sophos, VMware and Symantec. TSG has 10 offices throughout the UK and employees over 400. The companies 2016 revenue was £36.3m with a profit margin of 3.4%.
Grey Matter is located in Ashburton, Devon, UK. The company's product solutions include Microsoft, Oracle, VMware, Adobe and Intel. There is no published information on the number of employees but Grey Matter has been in business for 34 years. Its 2016 revenue was £36.8m with a profit margin of 2.8%.
Softcat is located in Marlowe, Buckinghamshire, UK. The company has partnered with Microsoft, NetApp, Symantec, VMware, Adobe, and Cisco. It has seven offices throughout the UK and employees over 1000. In 2016, the company revenue was £672.4m with a profit margin of 6.3%.
Proact is located in Chesterfield, UK. Its partners include Cisco, NetApp, Tegile, Symantec, Amazon Web Services, and VMware. The company has a staff of over 740 across multiple European countries. It had a 2016 revenue of £51.6m with an estimated profit margin of 2.5%.
In conclusion, the net profit margin for VAR SaaS distributors in the UK ranges from 2% to 6.3%. VAR distributors add services such as IT support, troubleshooting and consulting in order to generate additional revenue and profit.