Hoping to cash in on a booming customer relationship management market that’s seen call centers spread like a rash across Europe, Bracknell, UK based Synstar International is to open the first of a series of specialist call center disaster recovery units. The first will provide 150 agent seats and opens next month in Wellingborough, Northants, UK with telco partner Ericsson providing the telephony expertise.
In the past year Synstar has added three new business recovery centers in Darmstadt (Germany), Wellingborough (UK), and Madrid (Spain.) These centers offer complete operational working environments including desks, voice and extensive datacommunications switch systems, and the normal assortment of desktop, fax and photocopier equipment. The company now has 10 such centers across Europe with the largest located in Brussels and Amsterdam. Synstar says it’s planning further expansion of both its business recovery and call center recovery operations into Luxembourg, France, Switzerland and Ireland.
At present Synstar’s showing in Europe is spread thinly. But growth ambitions were confirmed last year with the acquisition of the European arm of Control Data Systems Inc’s System Integration Services division. SIS provided services for business data management, specializing in data archiving and retrieval especially on Unix and legacy Control Data Corp mainframes. With revenues of 23m pounds and a presence in five European countries the acquisition provided Synstar with skills to develop its remote data archiving services. Additionally, the acquisition represents a significant sales opportunity for Synstar who expects to cross-sell its business continuity and desktop management services to SIS’s mainframe customer base.
Synstar was borne out of a 89m pound management buy-out in September 1997 of Granada Computer Services International (GCSI) from Granada Group plc. In March of 1998 Synstar floated, placing 87 million ordinary shares on the London Stock Exchange. Most of the proceeds of the floatation were intended to repay debt arising out of the MBO. Figures for the financial year ending September 1998 reported revenues up 14% on the previous year’s at 164m pounds. Synstar’s operating profit for the year ending September 1998 was reported as being 9.4m pounds, representing a slim 5.7% margin.
The company has a presence in a dozen European countries and has around 2,280 employees. Although its sights are set on growing the disaster recovery side of its business, the bulk of its revenues actually derive from its computer services division, accounting for 90% of total sales. The division includes hardware maintenance, asset management and helpdesk services with remote systems intervention capabilities. This also provides standard desktop management services, data management services and repair services. The company claims over 400 service locations throughout Western Europe.
Besides the provision of disaster recovery centers, its Business Continuity Services division offers mobile office facilities. This provides mobile computer/server rooms and fully equipped mobile office units to support both IT equipment and business process support. Mobile telephone switches, data, hardware and power generators are also available to connect a client to the outside world when required. A mobile fleet fitted with equipment specifically configured for a customer can be available within hours of an emergency, the company claims.
Last year Synstar’s 10 most significant customers accounted for approximately 25% of its 1998 revenues. However the risk in being dependent upon so few customers is lessened to some degree by the fact that no single client accounted for more than 8% of revenues. Contracts typically run for between two and three years for computer services but can last up to five years in the case of business continuity services. On this basis the company predicts minimum revenues of at least 110.5m pounds and 150.5m pounds for the years ending September 30, 1999 and 2000 respectively. At present its contract renewal rates are running at 80%.
