Philip Maguire: ‘It’s not about tech, it’s about understanding the business’

Podcast Ep 137: Auxilion founder and CEO Philip Maguire has just revealed a €17.5m investment plan that will involve a UK acquisition. His thoughts on recessions? Never waste them and use them to stay sharp.

The morning I chat with Philip Maguire, there’s a slightly nervous tension in the air. He’s summoned an economic expert to advise his leadership team of what to expect in the months and year head; a unique time of concern over wars, the cost of living, energy prices, an economic shambles in the UK and business resilience.

It’s not fear I detect, more a sense of the focus of an athlete on the starter’s marks just keen to get the race going.

Sure enough yesterday (19 October) it emerged that Auxilion has earmarked €17.5m to spend on acquisitions and an expansion in the UK. It plays perfectly into Maguire’s rulebook, that times of economic uncertainty or recession are never to be wasted.

The investment plan will seek Auxilion increase its existing UK workforce by more than 60 people over the next two years. This follows on the heels of Auxilion announcing 110 jobs in Ireland last year.

“The north of England offers unique opportunities, most notably due to the access it provides to top-quality talent,” Maguire observed. Operating from a new Centre of Excellence in Sheffield as well as Telford and Warrington in the UK, the Irish organisation is actively looking to acquire a mid-tier IT service provider in the UK which will complement its existing portfolio of high-quality managed services and innovative IT solutions.

Never waste a good recession


Earlier this year, Auxilion announced that it is on course to grow its revenues by 25% by the end of 2022, compared to 2021, taking its revenues beyond €48m.

As well as Auxilion, a tier 1 IT services business that work with tech giants Microsoft, Dell, HP and IBM Maguire also runs the highly successful contracting business IT Alliance.

Auxilion found its origins in the late 1990s. Like most tech businesses it had to deal with the aftershocks of the dot-com crash of 2000 and a general tech and telecoms recession that followed in the wake of 9-11. The business astutely navigated the global downturn that followed the financial crash in 2008 and was positioned for growth as the digital economy began to rocket again.

“In the tech industry, the one thing that is constant is change,” Maguire notes. “We’ve massively changed every year.”

The dot-com crash was enough of a wake-up call for Maguire to lay the groundwork for the years ahead, especially to focus on supporting the big tech brands it works with. “We just kept rolling on to the next recession … recessions keep us sharp, I think.”

Key to Maguire’s business philosophy is to keep things simple and not over-extend or drift out of focus. “If you don’t understand it and can’t write it down on the back of a fag package, then don’t get involved. And I’ve used that philosophy to avoid investing in massive property deals that I couldn’t get my head around or that hadn’t made sense.

Following the financial crash Maguire paid close attention to what a key partner Microsoft was working on: cloud computing. He put together an R&D team and originally focused on supporting SMEs by working in parallel with the work it was doing with large enterprises. “As I say to our people, never waste a good recession.”

A massive pivot over the past 10 years has been a move away from indirect sales to direct sales, which account for 78% of Auxilion’s business, resulting in major corporate wins in the past year.

A key focus of the business has been the trend towards digital transformation that accelerated during the pandemic. But according to Maguire many IT or digital transformation projects fail – as many as 50% – because of a lack of governance.

“It’s not rocket science, but the amount of times these projects can go wrong is unbelievable. It’s important to take the time on governance, make sure the structure are right and map it out. So I understand that journey.”

In many ways Maguire believes businesses and organisations are caught up in a perfect tech storm in terms of defending against cyberattacks, digitally transforming their businesses and embracing the hybrid working model. It’s a lot of complexity and a lot of expense, and that’s why businesses like Auxilion that can support organisations with managed services are in currently growth mode.

He understands the temptation of business leaders to invest in the next big thing.

“I usually say ‘stop, what business are you in? Forget the technology. What’s your business strategy and then map out what you need. Where are you going as a business?’ Then we can talk about apps to modernise it and take it the next level. When you build a house, the plumbing and electricity aren’t going to happen magically. You have to understand it and that’s why governance matters.”

When businesses fail to map out projects and put governance structures in place, that’s when IT project failures occur.

“Every CEO should be saying ‘hang on, explain that to me in simple English, what do we need to do, what’s the return on investment? If we are going to do that, what’s the structure?”

Often projects run out of steam because resources weren’t correctly allocated or planned in. “You have to prioritise and have a programme of work that could be more than four years.”

While reports from Silicon Valley signal a tech slowdown with giants like Facebook stalling recruitment plans, Maguire believes the reality in Europe is there is still a significant skills shortage. And this is very obvious in Ireland and a problem exacerbated by the shortage of housing.

“More than 500 people work with us and we have 35 different nationalities. Our workforce is distributed in Europe, mostly in the UK and Spain. I don’t bring people anymore to Dublin because there’s no accommodation there. So I hire people into the North, into Cork or in the UK, depending on where we need them.

“Is there a tech crash coming … I think there could be a big crash of [skills] supply coming.”

He said businesses like Auxilion need to work hard at not only recruiting skilled professionals but fostering skills too and this has involved the creation of apprenticeship schemes that have worked well in the UK and Ireland.

While skills may be top of Maguire’s mind, his rulebook for surviving and thriving in times of economic uncertainty is to constantly roll with the changes.

“It’s about looking at where your strengths and weaknesses are. I’ve shifted the business every time there’s been a big recession.”

If business slows down, it gives you time to think. “Rethink the business, see where you are going, who are your core people and what are the core skills. And then look at what’s going to evolve out of the recession, because every time it changes.”

If cuts are inevitable, Maguire believes they should be from the top down. “Cut once but cut hard.

“After that you are looking at your strategy – what’s really important, what’s key, what’s working well for you, what’s not, what customers are adding to your bottom line and be thinking customer, customer, customer.”

Ultimately, owners of businesses need to be able to think clearly in the face of market changes. “Give yourself the headspace to get clarity of thought as to what you’re doing. Have a plan and execute and then monitor that it is working. The amount of people that cannot see the wood from the trees is phenomenal.”

John Kennedy
Award-winning editor John Kennedy is one of Ireland's most experienced business and technology journalists.