Four years after launching in the UK, Terra Computers has unveiled ambitions to become the tier-two PC brand of choice among UK resellers, and reach £100m revenues within five years.
The Germany-based outfit, which can build machines to order within 24 hours for a £25 fee, has been on a hiring spree, enlisting three well-known faces including Acer, Zoostorm and Entatech alumnus Alicia Shepherd.
Terra sells exclusively through the channel, both in the UK and across Europe, and is looking to become the favoured tier-two PC and server manufacturer among resellers here with its build-to-order model.
The firm - whose German parent company Wortmann claims to be the largest independent manufacturer in Europe with 1,000 staff and a turnover of more than €1bn - is also a components distributor, stocking 10,000 SKUs from the likes of Microsoft, PNY, Western Digital and Seagate.
"The obvious hole in the market where we see as an opportunity for us is Fujitsu," said Shepherd, who joined two months ago as senior business development manager.
"There are a lot of B2B resellers out there that have a very close relationship with Fujitsu, but now all the service and sales support is no longer UK based, that's having a really big impact on the service they receive. When we go out and speak to customers and they see the quality, they see us as the obvious choice to slot into that."
Terra currently has 14 UK staff and is on course to have 500 local reseller partners by the end of 2017.
Shepherd said: "If you are looking for a £199 notebook, it's never going to be us. If a customer asks for an HP, Lenovo or Dell, what are the reasons for hesitating and saying 'have you considered Terra'? And that's got to be margin, it's got to be support, and it's got to be build quality, and the fact they know they are going to get a local UK service. We do a complete built-to-order system."
Terra Computer Limited was registered in October 2012 and UK director Neil Jensen said the firm has taken a cautious approach to UK expansion.
Terra's UK distribution business currently outweighs its branded PC, laptop, tablet and server business, although last month it shipped 1,500 PCs here, Jensen said.
"We're a self-insuring company so we can take as much risk as we want, and we've got enough stock and elasticity to grow endlessly, but we are not interested in just buying market share," he said. "We don't over-spend on marketing. We're more focused on trying to be an honest, profitable organisation without being too greedy.
"But if we are smart, there's no reason why we can't be a £100m UK business by between 2020 and 2022."
Terra's competitive edge is its build-to-order prowess, Jensen explained.
"We're doing built-to-orders where customers are paying £25 for a 24-hour build, which not a lot of our real competitors can offer, even if you look at the UK guys who will quote you five to seven days just for a standard built-to-order," he said. "Depending on the product, we have between one and three months' supply on stock for anything we consider a manufacturing item, to take away force majeure etc."
New lease of life
While several local PC builders such as Utopia and Scan are prospering from targeting the high-end gaming market, Jensen said Terra is placing its bets elsewhere with the launch this month of a leasing service, backed by finance house Grenke.
"We are effectively offering a cost-per-workspace solution as that's effectively the B2B direction, and it fits in with the recurring revenue model and buying Office 365 and paying for it monthly. That's where we see the market going," he explained.
Terra also plans to launch a workstation-as-a-service solution that will allow B2B customers to rent equipment to firms on a temporary basis, perhaps if they have a peak in telesales staff over Christmas, Jensen added.
Terra also has an in-house datacentre from which it can provide housing, hosting, infrastructure-as-a-service and software-a-service, Jensen added.
"We're probably the only hybrid company that can offer manufacturing, distribution and cloud services," Jensen said. "I don't think you'll find anyone else doing that under their own brand. We are effectively a one-stop shop fitting future needs as well because of the cloud."
France is Terra's most successful market outside Germany, which Jensen said is due partly to the death of the tier-two market there.
"That created a big opportunity where the resellers were hungry for a reseller-hungry brand like ourselves to go in there, and therefore we were successful in France," Jensen said. "I can see that being the case in the UK - there will be more consolidation."
In a statement, a Fujitsu spokesperson said: "Some first line call centre support has moved to one of our Global Delivery Centres, however this has in no way affected the support that our resellers in the UK are receiving. Fujitsu is 100 per cent committed to ensuring its best of class levels of service with our channel remaining a key differentiator for our business. Fujitsu is continuing to grow and invest in its channel and are seeing significant growth in the UK & I channel business."
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