Acquisitive reseller plots 'buy and build' trajectory
Fragmented Microsoft SME channel in need of consolidation, says m-hance
The boss at acquisitive software reseller and managed service provider m-hance claims the Microsoft mid-market channel is ripe for consolidation.
Mark Thompson was brought on board as CEO by Fiona Timothy, chairman at Calyx – acquired by Better Capital in September 2010 – having previously worked together in the management team at COA Solutions, now owned by ACS.
"The whole SME application market is very fragmented, it's filled with relatively small Microsoft resellers or lifestyle businesses," he told The Reg.
m-hance, backed by equity player Better Capital, was rebranded yesterday under a single management team.
It comprises Calyx Software, which itself bought two firms in the summer, as well as MS ERP and CRM dealer Gyrosoft, the hosting and software dev biz of MentecPlus, and the customer lists for Sys-Care and Avant-Garde.
Consolidated sales are about £15m, said Thompson, and the group has an EBITDA of £3m or a standard 20 per cent. It has over 150 staff in four locations and around 1,000 direct customers.
The operations are almost entirely integrated, but Thompson said the biggest challenge he had faced was putting in placed an organisational structure that is often missing in smaller resellers.
He said m-hance was looking at further expansion in the areas of managed services, portals and integration and is setting up user groups for vertical customers in distribution, not-for-profit, education, financial services and manufacturing.
"We are looking at verticals to see what customers need and what is available to buy or partner," he said.
According to TechMarketView analyst Angela Eager, m-hance's customer base makes it one of the larger mid-market software suppliers – albeit tier 2 in terms of size.
"In our experience, roll-ups need more than mass to succeed, so m-hance is unlikely to have an immediate impact on the mid-market – but the potential is there," she said.
"However, the number of acquisitions may be enough to tip wavering would-be purchasers of other mid-market vendors to make their moves, for fear of losing out," added Eager. ®
- Internet Explorer
- Microsoft 365
- Microsoft Build
- Microsoft Edge
- Microsoft Office
- Microsoft Surface
- Microsoft Teams
- Office 365
- Patch Tuesday
- SQL Server
- Visual Studio
- Visual Studio Code
- Windows 10
- Windows 11
- Windows 7
- Windows 8
- Windows Server
- Windows Server 2003
- Windows Server 2008
- Windows Server 2012
- Windows Server 2013
- Windows Server 2016
- Windows XP
- Xbox 360