Bytes Technology Group (BTG) continues to run Bytes Software Services and Phoenix Software as two separate subsidiaries that occasionally compete because they are both “really strong brands” with differing USPs.
That’s the message of Phoenix Software MD Clare Metcalfe, who is on a mission to raise brand awareness for the York-based software licensing specialist as BTG strives to boost its marketshare beyond its current 4%.
In a break from M&A and integration norms, BTG continues to run Phoenix Software as a separate subsidiary eight years after former owner Altron acquired it in 2017.
The public sector-focused powerhouse employed 477 staff last year, compared with Bytes Software Services’ 760 headcount (BTG itself employed eight staff including CEO Sam Mudd).
“We’ve got 4% of the TAM between us”
Talking to IT Channel Oxygen, Metcalfe said the ploy has worked thanks to the two brands’ opposing strengths.
“The only time we have a level of competition between us is under the frameworks we’re bidding on. We go with different USPs, so as a group, why would you not want to have that?” she said.
“Ours is much more services-oriented, and Bytes’ go to market is stronger on the licensing side.
“We both have really strong brands. You’d think the market is highly congested, but in reality it isn’t. From a BTG position we’ve got 4% of the TAM between us, so there’s a huge piece of market to go after.
“If I was sitting in BTG, why would I make a change? BSS have got their skill sets and specialisms as well, so why would you not keep those separate?”
Phoenix being mislabelled as ‘Bytes’ is an occasional source of irritation for Metcalfe.
“There have been instances maybe where it’s a customer we’re working with, or a win we’ve had, where it’s been reported as Bytes, and therefore it could be misconstrued. It should be BTG PLC, which then has two subsidiaries,” she clarified.
“I’ve known Sam since we were teenagers”
Metcalfe was promoted to MD last year after predecessor Mudd was elevated to group CEO.
She started off in the industry in around 1987 at Yorkshire Micro Computers, a business which employed not only her but also Phoenix Software co-founder Suzanne Marshall and Software Box (now boxxe) founder Sue Ashby.
Also sat a few chairs along was Cath Dukes, who went on to found Trustmarque predecessor Internet Software Corporation alongside Metcalfe. Internet Software Corporation was owned by Mudd’s father Paul Ridley, with Mudd herself among its early employees.
“Sam and I have known each other since we were teenagers,” Metcalfe said.
“You’ve got Phoenix, boxxe and Trustmarque, which were really initiated by three people who I sat in a room with in 1987,” she reflected.
“We’ve got Microsoft technologies coming out of our ears”
Phoenix marks itself from the competition by employing as many subject matter experts as account managers, Metcalfe said.
“That really drives that technical expertise,” she said.
“In the last five or six years we’ve been moving into that managed services position. We are now a managed services provider with licensing expertise, IT solutions and services.”
Phoenix’s services push means Microsoft’s well publicised 1 January 2025 incentive changes haven’t impacted it to the same degree as some other large partners, Metcalfe claimed.
“Where they’re focusing the rebates and incentives is where we are anyway. We’re in their services element and are not a transactional partner,” she said.
Under a five-year plan that takes it up to fiscal 2029, Phoenix expects to continue growing at double digits each year.
Phoenix “doesn’t shout” about its employees and services enough, Metcalfe asserted.
“We’ve got CTOs with Microsoft technologies coming out of their ears. We’ve got MVPs and a host of people I’d like to share with the world,” she concluded.
Doug Woodburn is editor of IT Channel Oxygen
