Stone eyes university success
System builder gears up for battle with rivals Dell and Viglen after seeing robust 2009 growth
Learning curve: Stone is keen to grow in the university sector
After posting double-digit growth in its last fiscal year, system builder Stone Group aims to ruffle the feathers of rivals Dell and Viglen in the higher education space.
For the year to 31 December 2009, Stone’s sales increased 14 per cent annually to £69.2m, with post-tax profit standing at £2.7m.
Stone chief executive James Bird said: “We saw some difficult traction in the schools market that was probably to do with budget concerns. We targeted the university and higher education sector and got a lot of interest, but probably not as many deals as we would have liked. But that has picked up in 2010.”
Bird claimed the higher-spec machines demanded by universities have led to a £70 increase in average selling prices per box. The system builder is also soon to launch its first second-user product, Encore.
Stone will offer schools refurbished machines with a new operating system and peripherals for as little as £99 a unit.
“We still see an opportunity to grow by taking business from under the noses of incumbents,” said Bird. “The [higher education] market has been dominated by Dell and the likes of Viglen have had quite a comfortable ride up until now because they have not had to compete against Stone.
“Our strategy now is to maintain and protect. We will ensure our overheads are in line with market conditions and will endeavour to make our customers as sticky as we can. There will be a hockey stick effect when they get budgets again.”
Bordan Tkachuk, chief executive of Viglen, admitted that there is “no love lost” between his firm and Stone.
“Stone is a tin-shifter and we are a solution provider,” he said. “If they want to buy business off us at prices that are not sustainable, I am quite happy to back out. We are going to be here for the long term.”