Despite the widespread perception of Computacenter Plc solely as a PC reseller, the company has built itself a profitable business in related PC services which it expects to grow over the coming year. These related services, mainly UK-based, include electronic procurement, networking support and maintenance and make up 25% of the company’s business. The percentage earned from services, relative to desktop reselling, is expected to increase over the coming year, although its unlikely to surpass the income coming from its reseller business. In its last interim results Computacenter reported net profits up 44% to 20.9m pounds, on revenues up 39% to 776m pounds. Results for the full financial year have also shown rapid growth. In 1995, it posted revenues of 503 million pounds. Last year, that figure was 1.1bn pounds. Computacenter has managed to significantly enhance the revenue it generates from its distinguished user base, which includes half the Times 100. For example, in 1994 only 5% of its customers generated business of 10 million pounds or more. By last year that figure had grown to 44%. Technical consultancy pulls product sales, product sales pull maintenance, large installed bases pull managed services operations and managed services operations enable us to sell help-desk solutions, explains CEO Mike Norris. Computacenter provides distributed IT systems and services, divided into five key areas, described as PRISM. This embraces: Planning, to help companies decide on desktop strategy; Requisition, or supplying the desktops to corporations and governments; Implementation, or rollout of desktop systems; Support services, for maintenance, training, software upgrades and user support; and Management services, or out-tasking, for project management, procurement management, network monitoring and smaller tasks, such as running customer helpdesks. Going forward, Computacenter is not without challenges. First, the company is experiencing increased competition in its core hardware reseller market. For instance, last year General Electric Corp bought one of Computacenter’s smaller UK-based rivals, P&P, as part of its strategy to build a global reseller business. Second, general services companies are increasingly moving into desktop PC management, competing with Computacenter head on. Computacenter is responding by going in the other direction, offering customers a greater range of products and services, including a new unit to cater for e-commerce business, called I, for instance. Yet PC reselling remains the centre of the company’s business, accounting for 70% of revenues. Distribution to other VARs accounts for the remaining 5% of revenues. To help future growth Computacenter intends to rapidly expand its business in the French and German markets. These currently only account for 10% and 3% of the company’s revenues. Within the next two years, says Norris, its outlets in Germany should be generating the same revenues as France does now – 90 million pounds. Computacenter’s revenues in France are expected to more than double, to over 200 million pounds during the next three years. The company currently has no plans to expand into the US market and is only considering a push into one or two other European markets. It gains an additional international presence for its global customers by being part of the ICG PC reseller joint venture, which was formed in 1989 and now operates in 55 countries. This allows a chain of large and established services and reseller firms to offer local support for global desktop roll-outs. Computacenter has become a Microsoft alliance partner, allowing it to offer implementation and support services for Microsoft’s Exchange, SQL Server and Site Server software. Computacenter claims the deal will lead to the creation of 1,000 new jobs over four years. 900 jobs will be created in the UK with the remaining 100 split between France and Germany. Founded by Harvard MBA graduates Philip Hulme and Peter Ogden in 1981, and backed since 1985 by venture capital from Apax partners and Foreign & Colonial Ventures, Computacenter floated in May 1998. Shares were 12 times over-subscribed, and when the company debuted on the London Stock Exchange its shares soared from the placing price of 6.70 pounds to 8.30 pounds, valuing the company at 1.3bn pounds. Stock is currently trading at 5.24 pounds, valuing the company at 1.1bn pounds.
This article is part of ComputerWire’s European Computer Services information service. Some articles from the service are being provided to ComputerGram subscribers for a trial period only.
