Comparex boasts £20m public sector boom

Reseller looking to hire more staff to its York-based public sector team by the end of the year

Reseller Comparex has boasted a boom in its public sector business in the first half of this year, racking up sales of £20m in just six months, but has disputed claims it is being "aggressive" in the space.

The London- and York-based reseller has always had a presence in the public sector but the start of 2015 signalled its arrival on a number of government frameworks such as Technology Products and G-Cloud, which prompted it to beef up its presence in the market.

Since then, the company has recruited a seven-strong public sector team in York. Most of the new staff have come directly from local rivals, according to Comparex's UK managing director Mike Chambers. He said in the coming year, he hopes to have between 10 and 20 staff at the firm's northern base, many of whom will be soon-to-be-recruited graduates.

In the first six months of this year, the UK public sector business alone has racked up sales of £20m, Chambers added, claiming the unit accounts for a significant chunk of the overall UK business.

Chambers said his company's European presence has helped it win big public sector deals.

"I think the reason we have been so successful is Comparex has managed to leverage pricing from our vendor relationships [and] distribution relationships, but also the pricing that is available throughout the rest of the EMEA region," he said. "So we are utilising the best pricing available mostly within the UK, but also within the EU."

Comparex's push into the UK public sector has been noted by industry onlookers, who have claimed the reseller's move has been overly aggressive on price. Chambers did not agree.

"I don't think we have been particularly aggressive," he said. "All we have done is stick to the terms of the framework. What shocks me a little bit is if you look at the gross margin percentages agreed in the tender responses, plus also the rebate which has to go back to CCS (Crown Commercial Service), we're talking the net amount the reseller retains is very low single digits.

"However, if you look at the average gross margins some of our competitors who do large amounts in the public sector retain, it doesn't add up. It would not surprise me if Comparex is the only software reseller adhering to the pricing terms and conditions of the CCS frameworks."