Reseller Academia has walked away from low-margin deals tendered through education purchasing frameworks and is shifting its focus to services.
Since the start of 2016, Academia has stopped competing for "margin-poor" hardware deals through frameworks such as Crescent Purchasing Consortium's (CPC) Desktop Hardware & Peripherals framework, its CEO Mike Bacon told CRN.
He branded frameworks a "necessary evil", and claimed that neither suppliers nor education customers benefit from the "race to the bottom" he argued they promote.
"For a long time, we've said we want to be a £100m group of companies, and we will take that as it comes," he said. "But our focus now is much more to be the preferred supplier for Apple-based solutions in the education sector, focused on services."
For its financial year ending 30 June 2015, privately held Academia's turnover rose 16 per cent to £50.7m, but after-tax profit fell to £68,000, down from £331,000 in 2014.
The vision is for Academia to be a "world-class service provider" offering hosting, managed services, training and support, said Bacon (pictured), who is one of Academia's three shareholders alongside fellow directors Chris Eaton and Mark McCormack.
Bacon admitted he "isn't a big fan" of frameworks, which he estimated drive 80 per cent of business in the UK education market. This follows various resellers' criticism of the current public sector procurement setup earlier this year.
"CPC creates a list for schools to go out and get 10 quotes, and what we have done in that 10-quote scenario is walked away from low-margin business. By pushing our margins up, we are effectively ruling ourselves out of winning business, and are fine with that," he said.
"I genuinely don't think they are in the customer's interest. It's very easy now for a school to get 15 quotes for an iPad from 15 different suppliers within 24 hours but there is no engagement to understand the added value we can bring, or discuss training and development programmes. They'll just spend the budget on 10 iPads, rather than nine iPads and a day's training. That day's training is worth its weight in gold.
"Sometimes we provide that [training] a term or a year later and the tablets have been sitting in a cupboard gathering dust; the teacher has tried to roll them out and either the wireless hasn't supported it or they can't control the class because 30 different students are on Facebook, and the easiest thing is to put the tablets back in the cupboard."
Bacon claimed that frameworks hit suppliers by charging them a percentage of revenue and forcing them to go low on price, but he argued that education buyers also lose out under the arrangement.
"I don't see who the winner is. It's not the school, as half a per cent is not a significant saving and they are not getting ROI; and yet, they are encouraged to believe that is a professional procurement," he said.
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