Software licensing reseller Comparex has declared that the future of its business lies in managed services as it looks to shift from a transactional to a contractual relationship with its clients.
The global Microsoft partner launched four standardised managed services on 1 April and now employs 150 staff responsible for developing and managing this part of its business.
The push comes 18 months after Comparex's board reviewed its strategy in response to declining margins in its traditional software licensing business.
"We have been in the software reselling business for more than 30 years and we are successful. But we all know the margins are declining, and competition is getting fiercer, so we started a project 18 months ago to redefine our strategy," Maarten van Montfoort, vice president of northwest Europe at Comparex, told CRN.
"Software reselling is still at the heart of the company. But the future of our company will be focused around being a managed services provider, in particular a global managed services provider."
Two of the managed services are around software asset management (SAM), with the other two relating to cloud consumption and productivity.
"By 2020, we expect a significant proportion of our gross profit to be generated from managed services," van Montfoort said. "Also, because it's recurring and it's standardised, we have a much deeper understanding of, and relationship with, the client, so it goes from being a transactional to a contractual relationship with the client."
Van Montfoort positioned Germany-based Comparex as one of three global software licensing powerhouses, alongside SoftwareONE and Insight Enterprises.
The Raiffeisen Bank-backed firm has 2,500 staff and revenues of €1.8bn. Its UK business employs about 50 staff, with revenues last year of £72m.
Comparex's transformation strategy is partly a response to a recent squeeze in rebates and incentives available for volume licensing outfits from the likes of Microsoft, van Montfoort confirmed.
"If Microsoft changes something, you can either cry in the corner or you can accept it and say 'let's try to find new business models', and that's the reason we are really investing in those managed services," he said.
"I think we [Comparex, SoftwareONE and Insight] are all trying to change our strategy in some way, because we saw that the market was changing. I think Insight decided to focus on hardware, SoftwareONE on cloud, and we have made the decision to really focus on managed services, and of course the cloud offering can be part of that. We are all in the same phase of transforming our companies and we are all making different choices. And I think that's good, as there's something to choose."
CEO Graeme Watt admits the trading climate is becoming a little more uncertain as he and CFO Graham Charlton reflect on the reseller's £1bn year
Security vendor appoints Infinigate as part of strategy to grow channel business
As the trade war between the US and China ramps up, Marian McHugh investigates what impact this will have on UK prices and how partners are adapting to higher costs
CRN quizzes Avaya CEO Jim Chirico on the firm's progress after exiting Chapter 11 earlier this year, and listing on the stock exchange