Private equity Vice Chair Pontus Noren talks to Rachel Bridge at Drax about how an enduring love of technology has shaped his career
Pontus Noren can trace his fascination with technology right back to 1985, when as a child growing up in Sweden he was given a Commodore 64 computer by his parents.
He taught himself how to programme it and was lucky enough to be able to study computer science at his school, one of only three schools in Sweden to offer it at the time, where he was inspired by a brilliant teacher.
By now he was hooked and studied electronic and electrical engineering at the University of Technology in Stockholm before working as Product Manager for Ericsson and then as Business Development Manager for Nokia, a job which sent him first to Germany and then to the UK in 2001.
Pontus joined a company called Peregrine Systems and when that business folded, he used his redundancy money to fund an MBA at Cass Business School. He left determined to start his own business. While working for Cisco he had a lightbulb moment at a meeting with a procurement manager to negotiate a £5 million IT maintenance contract.
He says: “The client was ploughing all this money into maintaining really old kit, and I began to question where the value was in this model, and whether this was really the future of IT. I became a bit despondent about the whole industry because everywhere I looked, I realised that IT had become 90% about paying maintenance fees and maybe 10% or less about actually investing in new things. That just didn’t sound very exciting to me and I questioned whether I wanted to be in IT at all.”
Pontus began to research the market and realised that cloud-based computing had the potential to completely change the industry, because it turned IT into a pure utility service that people only paid for as they needed it.
Pontus’s wife had started working for Google’s European business when it was still small and so he was able to observe the Google journey through her experiences there. When he read an article about Google starting a reseller programme for its apps, he realised this could be the opportunity he had been waiting for.
He started Cloudreach in 2009 with a friend, James Monico, with a mission to help businesses migrate their IT systems into the cloud. They pitched their proposition to ten different businesses, with Pontus taking the CEO role and his friend becoming CTO, and within weeks they had landed their first client, a business with 500 users which they moved onto Gmail. The deal was big enough to get them noticed by Google, who agreed to let them become a reseller partner.
The two of them also started helping firms store their data in the cloud and it was not long before they also became a reseller partner – or solution provider as it was known as then - with Amazon Web Services, which had recently launched the world’s first pure-play infrastructure-as-a-service public cloud offering. This partnership was to form the bedrock for Cloudreach’s success and growth.
Cloudreach grew rapidly and by February 2017 had an annualised gross revenue of £60 million and 250 staff in seven countries. Pontus drove the sale of a majority stake of the business to Blackstone, the private equity firm, partly because they wanted it to stay as an independent business rather than be absorbed into a larger entity. Pontus stayed on as CEO for another 18 months, making three acquisitions and trebling the headcount to 750, and then as planned stepped down from the role at the age of 46 to become Vice Chair of Cloudreach.
In addition to this Vice Chair role, Pontus has a growing portfolio of advisor and non-executive roles, including at tech start ups Geospock and Brushbox. He is also a senior advisor to Blackstone, using his experience of the sector to advise them on tech investments.
He says there is an urgent need for businesses of any size to really understand the impact that fast-changing technology is having.
He says: “You are not going to survive in any business in any industry unless you understand what technology is doing to that industry and to your business, and how you need to use it going forward. It is no longer just about having an email platform and all the basic technology systems, it is about using technology to your benefit. But the majority of organisations and big businesses still do not have a grip on what that means both for themselves and their industries.”
He adds: “Platforms such as Google, Amazon, Microsoft and Alibaba have created a set of tools which simply didn’t exist three to four years ago and made them available at a scale that is unprecedented and at a very low price point, so barriers to entry are being removed everywhere for smaller players to come in. Big players need to wake up and learn how to use these tools. Some of them are doing this but there is a startling amount of people who haven’t really woken up to reality yet.”
Drax sector lead: Ruby Sheera
Partner, Technology and Tech-enabled businesses
Tel: 0203 949 9555