The main difference between us and other large dealerships,' says Mohammed Siddiqi, business development director of Chelmsford-based Info Products UK, 'is that we never expected to become as successful as we have'.
Info Products UK, formerly Corporate Computers, is one of the UK's largest corporate-only dealerships. It has a turnover of #128 million and, according to Siddiqi, a growth rate of 28 per cent.
The new name dates from January 1, but the firm traces its lineage back to 1982 when it was founded by Gerry Redmond and Chris Rigler as Essex and City Computers. One of the largest Dutch manufacturing conglomerates, KNP BT, bought Corporate Computers in 1992, and renamed it Info Products UK to bring a more unified approach to its worldwide portfolio of corporate dealerships - a portfolio which includes Entex in the US as an affiliate partner.
Redmond and Rigler are long gone and are now back in partnership with another Chelmsford dealership. The Info Products Group, meanwhile, has a worldwide turnover of #6 billion, and dealerships in six European countries. Siddiqi says that KNP BT, whose background is in paper, packaging and distribution, is backing Info Products UK in an ambitious expansion plan. The aim is to develop its logistics centre - at 81,000 sq ft the largest under one roof in the UK - and compete for large tenders.
'Culturally we are catching up with the size of our sales,' says Siddiqi. He calls Info Products UK 'one of the best kept secrets in the industry'. The company is not as big a name as corporate behemoth Computa-center, and only about a fifth of the size. But Siddiqi claims Info Products is ideally positioned to cope with the changes its customers are going through.
The group shipped some 270,000 PCs in Europe last year. 'In the beginning we always looked three to six months ahead; now we have to look three to six years ahead,' says Siddiqi.
The key area for Info Products UK, and the one at the heart of its strategy, is services. In 1995 services accounted for just 12 per cent of its UK turnover, but the company, backed by the Dutch masters, is investing heavily in developing UK services. 'We've always made good money by supplying product,' says Siddiqi. 'That's what we were set up to do.' But, he adds, the firm wants to offer a wider package to its corporate customers. 'Our business is maturing. The needs of our customers are changing.'
Info Products' internal changes are designed to mirror those of its corporate customers. 'Businesses change at certain points,' says Siddiqi. 'For example when you reach #25 million, #50 million and #100 million - we have just gone through the last of these.' Siddiqi joined Corporate Computers, as it was then, in 1987, when its turnover was around the #10 million mark. Sales now, he says, are particularly healthy as Info Products does not sell to small businesses or through a telesales arm. 'Our sales are all to corporates, the same as Computacenter's. Some of our competitors' figures include lots of smaller sales,' he says.
Info Products supplies to a number of the biggest UK companies, including Norwich Union, M+G Group, Nat West and Lombard North Central. Its largest single account is just nine per cent of its overall business, and its top 25 per cent of accounts make up 45 per cent of its overall business. This is a healthy spread, says Siddiqi, although the company wants to use its increasing European bulk to go after bigger deals. It now has the facilities for 1,500 PC roll-outs, far more than anything it has yet done. 'We might not have considered deals on that scale before,' he says.
'Corporate Computers was always seen as Gerry Redman's company - this is a radically different outfit.' The big change, says Siddiqi, is a more devolved style of management.
The other key personnel at Info Products UK are MD John Trueman and commercial director Andrew Douglas. Despite the overall size of the group, the decision making process is relatively tight. Trueman is a member of the European executive board of Info Products. Douglas was promoted after building Corporate Computers' Apple business to number one in the UK in the space of three years. 'The change of name allows us to take advantage of being part of the world's largest desktop systems and service provider,' says Siddiqi. 'The company will be strongly international, which will benefit our customers.'
He adds that the UK arm of Info Products held off changing its name in order to harmonise with the other European arms until it had built up the mass of its business: 'We had to reach a certain size, and we now have 450 people in the UK. Two years ago we had 220, and that growth will continue.' The increase includes 20 staff recruited direct from manufacturers in the last year.
Driving the growth has been the recruitment of service staff. Info Products is opening a service operations centre at its Chelmsford HQ, which will house 70 staff. The #3 million investment includes a file server with a massive 1Gb of Ram holding all the service contracts. Siddiqi says the service investment is 'not the strategy of a low-end box-shifter'. Overall it has 250 service staff at offices in Chelmsford, the City of London, Heathrow, Leeds and Birmingham.
The massive logistics centre holds an inventory of around #9 million, it provides a controlled environment to configure and preload PCs for customers. The building, a warehouse formerly owned by confectionery giant Rowntree, has 12 large horseshoe work benches where staff test systems. Corporates that want non-standard configurations are charged for the cost of time spent in installing the software.
Info Products' investment in services and support can be seen as a pre-emptive strike against a threat to large corporate dealers by large service and facilities management firms. These are increasingly taking over the running of the whole of a corporate's IT operation - often supplying their own PCs into the bargain.
'We are competing with them,' says Siddiqi, but he adds that traditional service companies do not have the experience at the desktop level that corporate dealers have. 'Facilities management is increasing in importance to our customers and to us.' So how does Info Products UK intend to make use of its international connections? 'The first benefit is a higher industry profile,' says Siddiqi. 'We get to talk to major vendors, perhaps in the US, at a higher level than hitherto.' There is also the potential leverage of group buying to drive down buying prices. Sid-diqi says group buying already goes on, although manufacturers have been slow to catch on, but Info Products wants to avoid the constraints of having a single European logistics centre. This might cut costs, but increases the time taken to deliver product to the customer.
One of the big demands from multinational customers, or potential customers, is for pan-European software licensing. Coalitions of Europe-wide dealerships might be ideally placed to provide this, but according to Siddiqi, it is being held back, often by software manufacturers. 'The problem is that often software firms' offices are nationally based, so they are not prepared for deals that cut across national boundaries.' Another problem is that companies are loath to do deals outside their own country, for legal and cultural reasons.
But, Siddiqi says, the demand from the large customers will eventually come, and when the large companies demand it they will almost certainly get it. This will change the nature of the dealer/customer relationship, he says, with the large dealer having a closer role in generating licensing deals and tracking the whole process of software use and procurement from beginning to end.
Siddiqi also sees the market for corporate dealers changing. 'There will be a handful of international dealers supplying customers worldwide through partnerships. We will be one of those players.' Dealers without worldwide partnerships will need to be more focused. Smaller dealers can still take a wide-ranging approach, but they will have to do it for smaller clients.
'We want to offer the maximum range of core services to the largest number of our clients,' Siddiqi says. One thing is for sure, the battle for corporate hearts and minds will be fought over services, and who can best provide them.
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