Consolidation Key To Growth

Minneapolis-based Equus Computer Systems last month acquired the last two offices of Able Computers, completing an acquisition that started in May when Equus purchased two other Able branches.

Meanwhile, Brea, Calif.-based GST recently acquired Riverside, Calif.-based Jaguar Computer Systems in a bid to wrap new services around its branded and custom-system business.

Joe Toste, vice president of marketing at Equus, said the acquisition of Able&'s Cincinnati and Portland, Ore., branches now gives his company 12 branches around the country and improves its ability to serve his customers, mainly smaller solution providers looking for custom systems for their clients.

“This gives us a national touch,” Toste said. “It gives us the scale and reach of a distributor, but we can support the system builders at the local level with customized services, unique configurations, Web services and so on. Someone like Dell can ship one configuration very efficiently. With white boxes, you need some combination of products and services.”

Consolidation in the space will have to continue because of competition from Dell and other direct marketers and the expense of investing in expansion, Toste said. “Very few system builders are large enough to invest in the business,” he said. “We have invested over $1 million over the last 18 months in our ERP system alone.”

Investing in developing the business also led to GST&'s acquisition of Jaguar.

Stephen Monteros, general manager of GST, said Jaguar brings his company new expertise in storage, messaging and services. “They had expertise we didn&'t have, and it was easier to buy the expertise than develop it in-house,” he said.

Those services, especially break-fix, will be a big plus in GST&'s custom-build business, as they are often easier to wrap around white boxes than branded systems, said Monteros.

“A lot of midmarket customers require specific SLAs [service level agreements] for break-fix, and it&'s easier to meet them with custom systems than with branded systems,” he said. “With branded systems, you have a bigger phone maze for service, and it&'s not as easy to find the people you need to contact.”