Lessons can be learned from Matrix

Sometimes a U-turn isn't a sign on weakness

When companies, governments or people U-turn on an issue, they are usually lambasted for it. The party in question is then left to feel slightly idiotic as a chorus of “I told you so’s” is sounded.

But is U-turning, or simply changing strategy such a bad thing? Being able to adapt to changing environments is all part of the road to success. Companies that simply trudge along the same path year after year are much less likely to end up sipping champagne and smoking cigars.

Much was made last year of Matrix Communications Group, which attempted a dual strategy of becoming a hybrid reseller and distributor. The firm made more than 10 acquisitions in three years, and last week was itself acquired by Calyx, an Irish voice and data VAR. Matrix has made many U-turns: it claimed that it would never resell Cisco, but less than a year later it is hunting for Cisco partners; it would not sell the integration business, yet last week the integration business was sold; and it was going to sell off its Fujin business, but now this is all that remains of the company. And these are just a few examples.

While the sound of the “I told you so’s” reaches a crescendo – many industry watchers reiterated that a hybrid strategy simply cannot work in the channel – it should be noted that, despite the dizzying rate of changes made by Matrix, the company returned a decent amount of cash from its acquisitions to shareholders.

All of this leaves us with a new player in the UK channel: Calyx, an acquisitive company that made its largest acquisition to date just two months ago when it bought Irish security VAR Entropy for £4.95m. The firm acquired three companies last year, including ITS, which gave it a UK presence. The firm also had an initial public offering, and for its last financial year reported a turnover of £38.4m (up by 12 per cent), and a pre-tax profit of £1.74m (up by 9.6 per cent).

The company has been established for more than 20 years, and according to Irish players has a decent reputation. As for its UK strategy, let’s hope it is as fast-paced and channel-changing as that of Matrix, and that it continues to push the boundaries even further.