Having occasion to blow out 30 candles on a birthday cake is no mean feat, especially when the one celebrating its birthday has survived and thrived in a cut-throat industry such as the IT channel.
But that is just what Epsom-based Bytes Technology Group is doing this year, marking three decades in the IT industry with an 80s-themed party, a range of corporate events lined up, and a vow to keep on growing.
The firm, which specialises in software, services and training, and also has offices in York, Crawley, Manchester and Watford, became part of the £2bn South Africa-based Altron Group in 1999, and was one of the first to be named a Microsoft Large Account Reseller (LAR) in 1996.
It is split into three divisions - Bytes Software Services, Bytes Security Services and Bytes Document Solutions.
Neil Murphy, who has helmed Bytes Group as managing director for the past 14 and a half years, said the key to its success was retaining a laser-sharp focus on its core strengths.
“Microsoft is our main raison d’être,” he explained, “Volume licensing solutions, software asset management and training are our core areas. We do not sell any hardware at all.
“Of course, over the years, despite our focus on Microsoft, we have had to diversify the group and have made several acquisitions to that effect, and also work closely with many of the major vendors including Xerox, Check Point, VMware and Citrix.
“One of the keys to success is always having an eye on what makes money and what doesn’t. We have never tried something new unless we are sure it is going to work,” he said. “There are so many distractions with IT that can lead you down the garden path.
“We stuck with the tried and tested and it has always worked for us. We continue to focus on our core proposition and strive to keep growing that.”
For example, the upcoming Windows 8 release is going to prove exciting for companies such as Bytes, Murphy said.
“From what we have seen in Beta testing, Windows 8 works really well. The new interface excites people and I think they will migrate to it a lot more quickly than other platforms once they have a go on it. I think it is going to be a very strong demand generator for Microsoft and its partners.”
Another strength of the company is its people, he stressed.
“Staff are the number one asset. Without good people we are nothing, and we ensure that they are given plenty of incentives and rewarded for their success.”
When pressed for some of the highlights of his time at Bytes so far, Murphy said becoming one of the first two LARs in the UK was a particular high point, as was grabbing hold of a major portion of the Microsoft NHS business five years ago.
But growth is still a driver. At the end of February 2012 the firm made £5m profit, Murphy revealed, and had just closed the biggest March “in living memory”.
“Government spending went bananas, with plenty of orders from the NHS, local government and so on. It seems there was a lot of pent-up demand being released, with many public sector bodies faced with a ‘use it or lose it’ scenario,” he said.
Murphy added that being owned by such a large parent gives Bytes some breathing space to focus on its growth strategy.
“We are lucky to be owned by a big organisation, because we can deliver growth both organically or through acquisition. They are pretty keen for us to grow at a moderate pace rather than encouraging us to go for acquisitions all the time, which is the right approach.”
But in terms of acquisitions Murphy said the firm still needs to keep an eye out for the right fit and would certainly not rule them out.
“We are looking at managed services around cloud and SaaS, and training is definitely blossoming for us,” he said.
Looking ahead, the future looks bright for Bytes, he claimed.
“Despite the state of the economy and the euro crisis, we have not really seen a downturn in business. In fact, we have attracted a lot of business from countries such as Spain and Portugal, who have preferred to transact deals in sterling rather than the euro. I do not think our customers will spend any less on software, so I am optimistic as far as our market segment is concerned.”
Edward Hyde, director of the large account reseller channel at Microsoft, said: “Bytes is a long-standing Microsoft partner and we wish the company well on its 30th anniversary.”
Bytes was initially set up by channel veteran Sean Frohlich (pictured) and business partner Piers Cooke who conceived the idea while working for a computer supplies firm that went bust.
Speaking to CRN, Frohlich remembers the humble beginnings of Bytes.
“30 years ago machines were beginning to get printing computerised and they began memorising things. We were selling things like printer paper, disks, consumables etc, and we wondered what to do next,” he said. “In those days the IT guys bought all the paper and a lot of stationery companies did not dare sell computer consumables because they were worried that they would damage the computers.
“Also an eight-inch floppy disk from IBM cost £80 for just 1.6mb and we found out that they were made by Memorex and worked out we could buy them in bulk for £10 each.
“Despite the price we had to sell them for about £50 because people wouldn’t buy them any cheaper because they believed they would damage their computers.
“Also the existing consumables supply chain did not embrace the change that offices needed computer consumables as well as paper etc. That created a gap in the market and we went knocking door to door in Epsom selling ribbons, disks and paper in 1982.
“However if someone had said to me at the time that this would become a £100s of millions of pounds turnover I would have called them mad.”
The business grew to £3.5m after 10 years, and by that time they were selling computers and Frohlich had bought Cooke out. He said the business had grown to around £18m by the mid-1990s, and he brought Simon Ognell and Neil Murphy on board, and it was around that time that South African parent company Altron swooped and added Bytes to its global stable.
“It is a great legacy to leave behind and to think that the company is as successful as ever – even now people I bump into ask if the Bytes I worked at is the one with the smart cars and happy people,” Frohlich said. “I’m happy to say that it is.”
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