Computacenter CEO Mike Norris (pictured) has told the cameras at the Canalys Forum 2020 virtual conference that subscription based hardware sales were a marketing lie.
“If I was a vendor, I would want a consumption model. I see absolute logic in why I would want to sell as-a-service and not sell capital goods. Vendors have to be careful because I don’t think customers want to buy that way if they can avoid it.”
Norris claimed some vendors were “fixated” on consumption models.
Computacenter has swallowed the Canadian firm Pivot Technology Solutions and effectively doubled its size.
CEO Mike Norris said: “The acquisition of Pivot represents an opportunity to increase our scale, geographic footprint and capabilities in the US. Canada expands our total market opportunity and helps us meet the needs of international customers.
Computacenter will pay CAD $105.8 million for Pivot in a deal which has been recommended by the Canadian firm’s board, but still requires shareholder approval.
The US arm of Computacenter will be integrated into Pivot, the firm added, doubling US revenue and headcount. Pivot’s US sales were $1.2 billion in 2019.
Computercenter bosses have decided to go without their salaries to show solidarity with furloughed staff.
CEO Mike Norris, (pictured) and Tony Conophy, group finance director, have elected to reduce their base salary to zero from 1 April 2020 until 30 June 2020.
The firm described the reason for the move as “showing solidarity with staff that have been furloughed across the business”.
While Computacenter CEO Mike Norris has just reported a stonkingly good financial year, he is a little worried about what he is seeing in his crystal ball.
The services giant saw overall revenue grow 16 percent year on year to £5.02 billion, with its Technology Sourcing unit contributing over £3.8 billion to that number.
Norris warned that last year has set a “high bar” for its current fiscal year and that it may not see the same level of growth due to the impact of coronavirus.
“It is too early to predict the outcome for the year as a whole and there is still much work to be done, particularly as we have not yet completed our first quarter. Our services pipeline is the strongest we have seen for some time in both professional and managed services. While we still believe customers will continue to invest in product, particularly in the areas of security, networking, and cloud, it may well be difficult to achieve the same growth rates we have seen in recent years.”
UK’s largest reseller/services outfit Computacenter has written a $90 milion cheque for the US outfit FusionStorm.
The move is part of a much rumoured push by Computacenter over the pond. Computacenter will pay an initial cash consideration of $70 million and up to an additional $20 million in differed payments for the San Francisco-based firm. It will also contribute $45 million to refinance FusionStorm’s existing facilities.
Computacenter CEO Mike Norris said the move would boost its ability to serve international customers and extend its reach into the US market.
Computacenter launched into the US in 2017 and it said the FusionStorm deal will boost its US headcount by 50 percent.
FusionStorm CEO, Dan Serpico is cleaning out his desk and handing the keys to the executive drinks cabinent to Computacenter US CEO Mike Keogh over the coming months.
Norris added: “This transaction broadens our capability to serve our international customers and should enhance our existing customer offer and reach into the US marketplace, whilst providing an opportunity to improve the long-term prospects for the employees of FusionStorm and Computacenter US.”
Serpico said: “Computacenter, as one of the leaders in our marketplace, offers an exciting opportunity for our employees as well as security, range of services and international coverage for our clients and partners. Out of many potential suitors, Computacenter stood out for their great cultural fit and I am very proud that we can start the next step in our company’s journey as part of this great business.”
For the year ending 31 December 2017, FusionStorm reported turnover of $595 million with a profit before tax of $3.9 million.
Computacenter however said that this profit number includes $5.2m of interest costs, which it expects to “materially reduce” as a result of the refinancing.
Computacenter has snapped up Misco’s last-remaining European subsidiary in Amstelveen in Holland.
Misco Solutions employs around 200 staff and booked revenues of €134 million last year.
Computacenter claiming to have covered the cost of the transaction using existing cash resources, which presumably means breaking into the piggy bank and looking down the back of the sofa.
The sale went through three months of negotiations and Centralpoint and Bechtle were in the frame to buy the outfit before Computacenter.
The deal marks Computacenter’s first direct presence in the Holland and should give a boost to its Benelux business.
Computacenter CEO Mike Norris said: “While we mainly focus on organic growth, we are interested in acquisition opportunities which either enable us to enter new markets or enhance our services and solutions for our customers. The Netherlands is an adjacent European market for us and we are excited by the opportunity to build the long-term trust of government organisations and some of Europe’s largest companies headquartered there. Our direct local presence in the Netherlands will also allow us to enhance our support to a number of Computacenter’s largest international clients for whom this is a key location.”
Misco’s Dutch arm is the company’s last-standing subsidiary on the continent following the collapse of Misco UK in October 2017, which preceded subsequent closures across Europe.
Computacenter has reported a four percent profit loss for the full year claiming it “stumbled in Germany”.
The British company said its profits stood at £71.3 million in 2012, compared to £74.2 million in 2011.
It blamed the loss on higher costs from new contracts, which bled into margins in the services business in Germany, its second-largest market by revenue.
And 2013 doesn’t look to be an easy road with the company claiming that this year would be dependant on the speed of recovery from the “problem contracts” in Germany, which it said was unpredictable.
However, it wasn’t all doom and gloom with the company reporting group revenues jumping 2.2 percent to £2.91 billion compared to 2011’s £2.85 billion.
Mike Norris, Chief Executive of the company said: “We expect 2013 to be a year of progress for Computacenter. While the Group financial outcome for 2013 will be dependent on the in-year performance of Germany and the speed at which we recover from our problem contracts, which is unpredictable, we are confident that these contracts will improve.
“More importantly, winning, contracting and taking on new contracts successfully, is more fundamental to the long-term growth of the business and its strategic development. This will be underpinned by our new Group operating model, which has taken effect in the UK and Germany, since the start of 2013.”
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