Norris opens up on Computacenter's direct US expansion

'I would be very surprised in five years' time if it wasn't well into thousands of people there'

Computacenter chief executive Mike Norris has opened up about the company's direct US expansion, telling CRN he sees it as a "logical step" and he anticipates over a thousand staff to be out there over the next few years.

Computacenter has been partnered with services giant CompuCom Systems in the US, but in its 2015 results it released today, it announced it was "planning to begin direct, rather than partner-based, operations" in the region.

Speaking with CRN, Norris (pictured) said the move "is in process as we speak" and the firm has already established an office in New Jersey, near Newark Airport, and it plans to have around 400 US staff up and running by the end of the first half of the year. The majority of these staff will be on customer sites and the office is small, he added.

Computacenter is also setting up a support centre in Mexico, which will be servicing customers in the US time zone, but Norris stressed that these operations are for Computacenter's international customers which have a presence in the US, and not for new US-based customers.

"Most of our customers we support in the US are our global customers in the US, rather than specific US customers," he said.

When asked if this US base could start selling to new US customers, Norris said: "For the foreseeable future it's about supporting our global clients in the US."

While the initial plan is to recruit around 400 staff, Norris said he expects to see this number increase dramatically over time.

"It's a good evolutionary programme and I would be very surprised in five years' time if it wasn't well into thousands of people there," he said.

Despite these large numbers of staff, Norris played down the move and said he didn't think it was a very momentous moment in Computacenter's history.

"I don't see this as a particularly significant step, but then again I don't see anything as a particularly significant step," he said. "You just go and do better. We floated the company and someone said that was a significant thing; I just saw that as a slight change of ownership... I think it's an evolutionary step, but remember it's only 400 people; Computacenter employs 14,000. When we went into Germany and we bought a company with 4,000 people, that was a very significant step; this is an evolution."

He added that the company is at a big enough scale now to deliver its own support to its US customers, as opposed to partnering with other firms.

"This is an evolutionary process of going from using our partner network to deliver this to say we are big enough now and it's worth our time and effort for us to do."

Computacenter's US expansion is not the first transatlantic play witnessed in the channel in recent months, with US giant CDW completing its acquisition of Kelway last summer. But Norris said Computacenter's play is "irrelevant" to CDW, which is a products-company and Computacenter only plans to run services in the US.

"It's absolutely not a threat to them whatsoever," he said. "Their acquisition of Kelway, good luck to them. I don't know how it's going to turn events. Kelway are not a particular competitor to us; they compete somewhat with us, so we will see in the fullness of time. [But] what we are doing over there has nothing to do with them whatsoever."

The next step

When asked where the next geographic move from Computacenter is likely to be, Norris said that Asia is an "interesting" region.

"We have quite a reasonable size in Kuala Lumpur (Malaysia) already; we have around 120 people out there," he said. "[But] Asia is more difficult to serve because it's multiple countries, with different languages and they don't speak English as much. As opposed to the US which is a single jurisdiction.

"A much as we have plenty of customer demand for supporting their requirements in Asia it's just much harder to do."

For its financial year ending 31 December 2015, Computacenter's adjusted group revenues were flat at £3.054bn, while adjusted pre-tax profits rose 7.2 per cent to £86.9m. Norris said he was "delighted" with the results for last year but added that the firm's temporary move out of its Blackfriars Road office impacted its UK performance.

"We were out of our Blackfriars office for nine months; that's cost us money and is a distraction," he said. "But overall we are delighted; France and Germany are picking up really well. We have lots of cash which is great, so we are in good competitive shape. But it's never easy; if it was easy anyone could do it."

Channel thoughts

Martin Hellawell, Softcat chief executive, said he was "delighted" for Computacenter with its US move.

"It makes a lot of sense for them," he said. "They have a lot of international customers they are looking after [with] a big presence in the US. So I understand why they are taking that base and turning it into a direct base. It's nice to see a British company doing it in the US, rather than US [companies] doing it Britain, like CDW, Systemax and Insight."

When asked if Softcat could perform a similar expansion in the near future, Hellawell said he has no such plans, as the firm does not have the international customer base.