Integralis set to cut vendors

Integrator prepares to evaluate its vendor stable as it looks to boost profits

Security integrator Integralis is gearing up to slim down its vendor partner base as it pushes for growth.

The firm, which released its first half 2007 results last week, saw turnover increase slightly by 4.6 per cent to Euro 68m, due to its continued investment in bolstering its managed services offering. Net profit for the six months increased 416.9 per cent to Euro 1.6m.

Graham Jones, chief operating officer at Integralis, said: “We are moving away from a vendor-led company to a services led company and that is starting to show in our results, but that takes time. We can't switch overnight, but we are pushing hard on both consulting and managed services."

Jones said the group overall had performed well, but the UK was "slightly slower than it should have been".

"A lot of vendors are talking about SMB in the UK. The challenges we have is that SMB means different things to different people. We came up with a mid-tier space - firms just below the Times 100 players and that is where Integralis can be a pure play security partner. At the top end we are seeing less bigger projects."

The better performers for the first half were Germany and the US, according to Jones. France suffered some 'challenges', he said which resulted in the country manager for the region losing his job.

"We are changing the management structure in France to be more in line with the other divisions," he said.

Jones said the integrator has held a series of management meetings to talk about 'standardising' on some vendors - meaning the whole group will work closely with those vendors - which are likely to include Juniper, RSA, Check Point and Nokia.

"We are also starting to drop vendors. It is part of the shake up. There is probably around eight or 10 vendors that make up 85 per cent of our vendor revenue. The rest of the vendor percentage is covered by 90 vendors," he said.

Jones also said the firm would still consider acquisitions, but is not actively pursuing them at this point in time.

"We will probably look to invest more in our own services and would not be tempted to pay stupid prices for stupid companies," he said.

Alastair Edwards, senior analyst at Canalys, said: "Reducing the number of vendors makes sense for Integralis. Looking at their portfolio they have a large number of vendors, but the majority of their revenue would come from a small group of key vendors. It makes sense for them to focus more on this business.

"Integralis is a company that is pursuing a new and innovative model and is definitely one of the leaders in that space," he said. "However the problem with being a leader is that is has to take all the risk and make a big investment in driving its customers in the same direction. I think it is a strong company and one that a lot of the bigger vendors may want start engaging with it in the future."