US office equipment giant Ikon will spend its "unlimited budget" to buy its way into the European IT market by acquiring system integrators and Vars, beginning with a UK acquisition before September.
Ikon, the $4.1 billion office equipment supplier, has diversified into IT over the past year. Since moving into systems integration in mid-1996, it has bought 28 SIs and Vars in the US for undisclosed amounts and is now negotiating to buy companies in Europe.
Mike Anderer, vice president of systems integration at Ikon, said: "I can?t say who we?ve got lined up but they are similar to the US [acquisitions]. We are constrained by our ability to find good integrators, not our budget."
He said Ikon is likely to begin in the UK, where it already has a $200 million office supplies business. Anderer admits the European Var market has already gone through a round of consolidation, with large integrators buying medium-sized companies, particularly in the UK. "It?s a very entrepreneurial market with high-quality SIs. We?ve just been pipped to one takeover, so we will move fast there - within 120 days."
In continental Europe, Anderer said a few large resellers dominate, accompanied by many smaller Vars. "We?ll just have to adapt to that." US customers including Barclays and BMW have asked Ikon to take on European integration business, Anderer claimed, but Ikon will ask local managers to run acquisitions so it can avoid mistakes made by US companies that impose their culture on foreign subsidiaries.
The company hopes to convince customers - mainly medium-sized businesses - that it has the buying power, expertise, services and relationships of a large integrator, but also the personalised support, flexibility and local knowledge of a small operation. It makes this claim because it is built from the acquisition of many small enterprises.
"No-one else services the small and medium business market with high value added services," Anderer said. Ikon aims to find young, growing, private or publicly held companies, with managers who have the will to continue growth rather than retire on Ikon?s money. "We?re buying people and reputation, not inventory. We?ve lost less than 30 people from our US acquisitions."
Ikon admits its copier and office equipment business will produce the majority of its sales in 2000 - around $8 billion - but hopes its SI business will contribute roughly $2 billion to its total turnover. It is accustomed to the tight margins in commodity office products such as photocopiers, telephones and fax machines, and has important relationships with vendors including Canon, Hewlett-Packard and Xerox to help it make profit from selling IT. "The typical office has copiers, phones, training and now computer and network integration, so we want to get the most leverage out of customers," Anderer said.
Logica?s US SI operation, Logica Inc, does not pitch against Ikon very often, according to chairman Jim Davis. Ikon?s strategy makes sense because more integrators are adopting global infrastructures, he said. "Our competitors are changing all the time so it?s difficult to work out who they are," Davis admitted.
Ikon began leasing kit to customers two weeks ago and also offers training. It has education accreditations from Microsoft, Lotus-IBM, Novell, Powersoft and Sybase. Its US acquisitions include Datawiz, HBM, Integra Technology, Midak, The Computer Group, US Connect and Waldec.
Sudden increases in availability of sniper rifles on Vikendi