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Falling sales force Corporate Express to look downstream

Falling sales force Corporate Express to look downstream

Corporate Express is extending its logistics-driven model into the SMB sector. The move comes after the national reseller reported a 9 per cent year-on-year decline in IT sales for the six months to June 30.

General manager of IT solutions, Marcus Heron, largely attributed the drop to turning down a substantial software deal.

"To a lesser extent, HP has pursued a few strategic accounts which also affected us," he said.

In order to grow revenue, Heron planned to expand into SMB with a limited set of products, and solutions that integrate services around core lines. These include document management and archival, printing and imaging, AV integration, storage deployment, server consolidation and virtualisation.

"We have traditionally played in mid-sized corporates with 500-3000 seats," he said. "We're not looking at lessening our revenues at the top end - we are looking for incremental growth through the lower end.

"I think our model suits what SMBs are looking for: aggressive procurement and a broad product range with logistics-leading solutions."

Like many resellers, Heron said Corporate Express was coming to terms with sustaining profit as average selling prices continued to fall. To combat this, the company was continuing to broaden. As an example, he highlighted the reseller's acquisition of TSG in 2004 had given it the ability to offer software asset management.

Another area of growth was warranty authorisation. Heron said the reseller had bought several regional office products and copier businesses that gave it warranty delivery capabilities in tier-one brands like HP and Lexmark.

"We have seen a decent shift in our overall revenue towards solutions categories," he said. "Hardware sales are still there but, like everyone else, we have focused on our margin position."

Heron forecast further market consolidation, increasing the gap between larger players and niche operators.

While its competitors pushed into select outsourcing and applications integrator, Corporate Express would continue to focus on integrated logistics, he said.

"Where we are is not a lot different to where a lot of integrators have been over the last couple of years," Heron said. "Those who have moved to a services model are not showing any more profitability than we are."


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