Insight has had a bad quarter ending 30 September with the numbers mostly dragged down by its EMEA earnings.
Worldwide earnings from operations for Insight reached $22.4 million, up four percent year on year on revenues that enjoyed 26 percent growth to $1.76 billion on the corresponding quarter last year.
But Insight’s EMEA region was not so lucky after a bad year. It was recovering from a €3.2m restructure carried out in the first three months of the year which resulted in the firm posting a $1.13 million operating loss. The second quarter saw operating profits grew 19 percent annually to $69.32 million but this was not sustained.
While the firm’s North American and APAC regions did well EMEA revenues declined two percent year on year in constant currencies to $312.19 million for the quarter, while posting a $2.14m operational loss. Gross profits – which Insight believes better represents its bottom line since cloud sales are reported as net earnings – saw a nine percent boost in EMEA to $41.62 million.
Insight blames the firm’s acquisition of Caase.com, which EMEA boss Wolfgang Ebermann described vital if Insight wanted to get into digital transformation and spruce up its German and Dutch operations.
In July, Insight sold off its Russian arm to $1.5billion turnover VAR giant Softline, which comprises the business of 250 customers.
CEO Kenneth Lamneck explained that “this market did not exceed our long-term plans”.
Hardware revenues accounted for 44 percent of EMEA sales in Q3, up from 41 percent logged in the same quarter of 2016. Software sales declined by six percent to 52 percent of revenues, while services peaked a modest one percent to account for four percent of its EMEA top line.
A similar story emerged across North America and APAC, where hardware revenues increased by six per cent to 68 percent of regional sales, and five percent to 21 percent of sales respectively.
Speaking on the same earnings call, Lamneck claimed that all major VARs were experiencing healthy hardware sales this quarter as a result of higher component costs.
“The [device] market was pretty healthy this quarter as we look at the… data across the channel for everybody,” he said.
The National Desktop and Notebook Agreement (NDNA) is now live with resellers awarded spots as indirect partners for a host of PC vendors.
Managed by London Universities Purchasing Consortium, the four year agreement will see Academia, DTP and Misco provide desktops and mobile devices from Acer, Fujitsu, HP Inc, Lenovo and Toshiba. Dell will take all its business direct.
The 11 resellers on the framework are: Academia, Bechtle, CDW, DTP, European Electronique, Getech, Insight, Misco, SCC, Stone and XMA. Stone Computers will also supply its own devices direct to customers, while XMA will supply its Viglen brand.
The framework is broken up into three lots: Lot 1 is for desktops, Lot 2 is for notebooks and mobile devices, while Lot 3 is a “one-stop shop” for both categories.
The value of the NDNA is between £400 million and £440 million, which is much bigger than its predecessor’s £310 million.
One thing is noticeable. Samsung is no longer involved, while Fujitsu is brought in on Lot 2. Softcat is a notable reseller absentee, having previously been in all three Lots with Dell and Lenovo.
XMA has appointed former Insight and Misco vice president Tony Brooker as its new UK corporate sales director.
Brooker left Misco in February and will be a key part of XMA’s moves to bolster its corporate sector business as it tried to expand beyond its traditional public sector clients.
Before working for Misco Brooker worked for Insight, then SCC and then back to Insight.
XMA has always been renowned in the public sector, mostly in education. However it has been quietly developing its corporate space profile and the plan is to grow that in the next six to 12 months across the four locations.
XMA’s corporate team currently accounts for just over 20 percent of XMA’s total business, according to sales and marketing director Ian Cunningham, who harbours ambitions to have a 50/50 profit split between public and private business in three years’ time.
Brooker said the size of the corporate team will be expanded, but it is unclear if the team will be dispersed across the reseller’s offices in Glasgow, Halifax, Nottingham and St Albans – or based in one location. He also didn’t rule out opening “a fifth or sixth” office down the line.
XMA also recently head-hunted Andy Wright from SCC and Kelvin Lee from the Crown Commercial Service,
In its most recent financial report XMA recorded a year-on-year revenue jump of 52.6 percent for the 12 months ending 31 December 2016, up to £358.5 million.
Insight saw its EMEA operations slip into the red because of restructuring costs.
Restructuring costs of $3.2 million made Insight’s EMEA numbers look pretty rubbish. Costs shot up as the company tried to improve the efficiency of its EMEA operations. Apparently things are going to be pants there for some time.
Overall the numbers for the first quarter across EMEA showed that Insight delivered a 9per cent climb in sales to $330 million but a loss with income dipping by $1.1m compared to a positive position of $2.7 million in the same period last year.
Insight CEO Ken Lamneck said that EMEA was a blight on the balance sheet but otherwise the firm had enjoyed a fairly decent performance in the region.
“The sales growth obviously is pretty 20per cent constant currency growth, so really solid there. A few big deals are brought down the gross margin related to some large software enterprise agreements and some hardware deals, lower than margin there for — but certainly good growth on a top-line and obviously growth year-over-year on the earnings line as well,” he said.
“But we looked and we said, hey, there is a couple of markets where there is some inefficiency. So we’ve taken that very specific action,” he added.
The CFO Glynis Bryan said that when it took a charge in Europe it did not always see a recovery in the first year and it expected the benefit of the cost cutting to filter in about $2m a year with most of that starting to come through to the balance sheet in 2018.
Sales for the outfit were up 26 percent to $1.48 billion for the three months ended 31 March. Gross profit was $208 million for the first quarter, up 29 percent year-over-year.
Insight has won a key contract on the Isle of Anglesey in Wales as the cash strapped council looks to save up to £5.6m
The council wanted to use mobile working as a solution to promote a more agile and modern workforce while at the same time reducing the council’s property assets.
The council’s ICT budget has been low over the last few years because of general low funding from the Welsh Government and this year it was told that it would have to make service cuts of up to £5.6m.
However the council worked out that a smart investment in ICT would enable “smarter working” and could result in gains from both a financial and non-financial perspective in other areas.
The council will save £140,000 following an engagement with reseller Insight to streamline the council’s software licensing estate.
The project with Insight, which used Snow as a software management tool, has since led to an ongoing contract with Insight to manage the council’s Microsoft licensing estate saving the council money through the redeployment of unused licences.
The Insight contract, worth £33,600 over the next three years, will provide complete visibility of the council’s deployed software licences, while assuming responsibility for ensuring that Anglesey maintains licensing compliance. Insight will also implement a three-year Licence Consulting Desk Service to build and adapt solid, cost effective licensing strategies for the council to help it meet its current, but most importantly, future technology needs.
Discussing the engagement and the council’s broader ICT strategy, Neil Summers, the council’s technical services manager, said he had engaged Insight because he realised that keeping on top of licensing compliance can be a headache for cash-strapped councils who are wrestling with the demands of austerity.
“Software licensing is an area which is full of complicated, fast-changing rules,” said Summers. “Insight had proved itself a valuable partner, and we realised that to ensure we were compliant and cost-effective we needed an expert to help us – which is where Insight came in. Our work with them ensures we are compliant to our software providers and efficient as a local authority.”
While there are fears that the UK government might be turning over its security to evil Chinese companies, it seems that there is less stress when it comes to using security outfits from the US.
US security company Insight is hoping to win shedloads of British government contracts by partnering with a UK data encryption company called DESlock.
Insight has been around since 1988 and provides hardware, software and services solutions to business and public sector organisations across the pond.
According to Luke Ambrose, UK Product Manager – Security Software, at Insight, his company is working hard to increase its channel on this side of the Atlantic.
Working with companies like DESlock gives Insight inroads into the lucrative UK government contracts as well as home grown products.
DESlock’s flagship data encryption product is Deslock+ which was launched in 2006. Desklock+ allows secure collaboration across complex workgroups and teams.
Kevin Percy, UK Business Development Manager for DESlock said that Insight can be very selective about its vendors and does not tend to pick any old riff raff.
He said it mades sense for Insight to be able to offer encryption as part of its portfolio, and give customers a fully integrated service.
There are a lot of advantages for the smaller British companies too. Insight has a fairly complicated business model which includes more services, expert technical resources, and a long supply chain which can give them access to services and products they might not normally get their paws on.
Insight made $5.3 billion in revenue last year and operated in 23 countries, serving clients in 191 countries worldwide.