Rivals covet fallen Chameleon's customer base

Race is on to pick up security VAR's top customers following its liquidation yesterday

Rivals are circling the customer base of fallen security VAR Outstep Limited following its formal liquidation.

Elizabeth Arakapiotis of insolvency practitioner Kallis & Company was appointed as liquidator of the Cyber-Ark and Check Point partner, which traded as Chameleon Security, at a creditors' meeting yesterday. The Farnborough-based firm ran into cashflow difficulties after a couple of big customer contracts were not renewed.

Chameleon was thought to work with about 30 customers, listing Aviva Investors, Capita and Camelot among the references on its now-defunct website.

It had been hoped that assets of the business, including supplier contracts, could be sold but "matters could not be progressed in this regard", Kallis & Company confirmed to ChannelWeb.

Based on the estimated statement of affairs there is very little likelihood of a return to creditors, the insolvency practitioner added.

However, several VARs are hoping to forge ties informally with any customers that have outstanding support requirements.

Jonathan Lassman, managing director of Check Point partner NTS, said Chameleon had about five "decent-sized" contracts.

"We are more than happy to offer their customers a lifeboat for support until their support expires and is up for renewal," Lassman said.

"Chameleon specialised in end-point security. We were Check Point's first UK end-point specialist partner and there is maybe no one better placed to handle this in the UK than NTS."

Ian Kilpatrick, chairman of Wick Hill, said Chameleon's demise was an exceptional case, given the buoyancy of the security channel. "It is unusual for security firms to go out of business in a growth market," he added.

Insolvencies in the wider UK IT channel are running close to a nine-year high, according to credit reference agency Graydon UK. Head of intelligence Alan Norton indicated that the picture is unlikely to improve given the eurozone crisis.

"It is still a tough environment in the channel," he said. "Consumers are very much watching what they spend and we expect to see levels of insolvencies reaming quite high for the rest of the year."