Surviving 30 years in such a cut-throat, fiercely competitive industry as the channel really is no mean feat and is cause for a hearty celebration.
And that is exactly what Rafi Razzak, founder of Centerprise International, did this summer to celebrate a special milestone, by holding a giant party for all friends, employees, partners and associates of the firm he founded in 1983.
But where did it all begin?
CRN spoke to the charismatic founder, fresh from his Personality of the Year accolade at the Channel Awards last month, to find out.
Razzak graduated from Imperial College London with a degree in electronics in the early 1970s and headed to Kuwait where he worked for IBM, initially as an engineer, and made his way up to vice-president level over the next decade.
“But around 1983 I realised I wanted to do something on my own,” he explained. “I didn’t want to work for anybody else. IBM was the best training course I ever had – but I could see my career mapped out, ending up playing golf and collecting my pension, and I realised I wanted more.
“They tried to stop me leaving, first by forbidding me, and then by cajoling me,” he joked. Razzak said that after leaving IBM he noticed a lot of former contacts were unwilling to engage.
“Once I had left IBM I quickly realised the importance of being affiliated with a big name. People used to try to find any excuse not to see me.”
But it was not long after that he set up Tulip Enterprise in 1983 – named after a Turkish version of the popular flower rather than the Dutch version, Razzak stresses, but this was challenged when a company with the same name started in Holland.
“We could have fought them over the name and spent over £100,000 on litigation,” he said, “particularly as we had the name first, but we decided not to fight.”
The moniker was duly changed – first to Computer Enterprise, then swiftly shortened to Centerprise – to make it “less of a mouthful”.
“I wanted to understand this thing called PCs,” said Razzak. “I went to Taiwan after I started Centerprise and met with Wugo – the first Taiwanese company to produce the first legal PC after a lengthy IBM lawsuit. It was called the PCII. The founder of the company was a famous horse trainer over there as well.
“I met with him to discuss the UK market and he agreed to let me have 50 barebones PCs that I could configure myself and sell on to my own customers.”
It wasn’t long before a company called Opus came along and ordered 500 PCs before setting up its own manufacturing arm in Hong Kong, selling 700 machines a month, and two years after that Viglen got in on the act, Razzak said.
The first real break for Centerprise came in 1989 when the MoD became interested in a machine produced by Centerprise that had a removable hard drive.
The government department had been using Toshiba machines, Razzak explained, but they had recently failed radiation testing and the MoD asked Centerprise if the company could produce a machine for the agency.
“At that time the Passport HDD was being invented by IBM engineers, and we thought why not create a desktop where the HDD can be taken out? We took our design to them and it passed their radiation tests. The machines were all CCTA [central government department] approved and that was the birth of the Leo [the name for Centerprise’s low-radiation removable disk desktop computer]”, Razzak said.
He added that the firm won more MoD business and when the Gulf War broke out in 1990 “all hell broke loose”.
The firm grew from £2m turnover to £8m that year because of the surge in MoD business.
“We produced the first removable disk drive machine and the company grew further from £8m to £16m,” he said, adding that one of Centerprise’s early computers is now in the Imperial War Museum.
“After that it was a case of where do we go from here?” Razzak said.
“I never believed the UK was good enough to create its own brand – whatever we do is wiped out by big companies. The independent PC industry in Europe was destroyed by the larger companies.”
The ensuing years saw deals with Dixons under the Centerprise-created Advent brand, and a battle with German players Vobus and Escom, along with Packard Bell. But it was in 2000 that the smaller players started seeing real pressure from the larger manufacturers, he said, resulting in eroded margins.
Centerprise kept its fingers in many pies, producing the Vulcan PC for John Lewis, I.T. Works for Comet, Dynabyte for the Dutch market and Infinity for BrightHouse.
It was in about 1999, Razzak mused, that although the company had sold a lot of units, he decided it could not continue as just a PC company anymore.
“We had amassed quite a war chest since we began, and we started to look at vertical markets,” he said. “We decided on two approaches – full acquisition and part acquisition.”
The firm kicked off its acquisition strategy in 2005 when it snapped up disaster recovery Adam Continuity for a seven-figure sum – which has since evolved into its cloud and data backup business.
Interestingly, Razzak said he invested in one of the first types of virtual music stores way back in 2000, before Apple founder Steve Jobs had come up with the iTunes concept.
“We invested in the ‘Virtual Music Store’, which was installed in Sainsbury’s and other retailers – customers basically picked a box, created their own design, selected the artist and songs and compiled their own CD,” Razzak said.
The concept was a joint venture between radio group GWR and technology company Cerberus, headed by Sir Peter Michael, chairman of Classic FM.
Razzak said the idea never really got off the ground because it would not get the backing of the major music companies such as Sony, which feared losing revenue as a result.
“Then iTunes came along in 2005 and killed off Virtual Music Store,” he said. “We also went into IT distribution, because we were selling so many computers and it allowed us to buy components,” he added.
Razzak said he left the firm he founded for a short while in 2007 before coming back again in 2009, where he kicked off a long-term investment plan to become a managed service infrastructure company.
“We had designed and installed high-level networks for many years, including for the MoD – hardware was just a part of the end solution,” he said.
Diversity was always part of his plan, he explained, adding that the firm continued to build specialised computers, and also to manufacture high-end gaming machines for Sega, as well as continuing in the desktop space and looking for new verticals.
It was because of this that its own-brand Renatus machine was created, with a particular focus on the education market, Razzak said.
Investment continued to play a strong part in his business ethic, he said, with involvement in a slew of diverse acquisitions and investments including the Syron facial recognition system, YoYotech [which the company acquired earlier this year], and online marketplace OnBuy [for which Centerprise became a major backer in May this year].
Other investments included a firm called EasyApps in the US and a points alert system on the London Underground which is set for extension to other lines and potentially other territories. Looking forward, Razzak said there was plenty to come from Centerprise.
“We are investing to expand our factory in Caerphilly from 50,000 feet to 70,000 feet and are looking for growth. We had about 30 per cent growth this year and are aiming for 30 per cent next year,” he said.
He also claimed that acquisition could still play a part if the right company came along, but more likely to be partial acquisition rather than full acquisition. One of his aims is to help young entrepreneurs with their ventures and enable them to build profitable companies of their own.
“I want them to share the experience and build successful companies together,” he said.
MSP plans to use new acquisition to expand its security offerings
Reseller also saw its operating profit fall five per cent in its financial 2017
Wendy Bahr to bring 18-year spell at networking giant to an end
AdEPT says latest purchase will push revenue beyond £50m