The key to success

The future is looking bright for software sales and licensing specialist Pugh Computers, currently riding high as one of the top...

The future is looking bright for software sales and licensing specialist Pugh Computers, currently riding high as one of the top 50 companies in its native Wales.

Standing proud on the coastline overlooking Cardigan Bay, the impressive state-of-the-art building known as Denver House acts as a physical tribute to the entrepreneurial success of Pugh Computers.

Building his empire by selling software and services to the education sector, founder and managing director Jeffrey Pugh is nervous that recent developments between Microsoft and various governmental departments may threaten resellers like him.

Founded in 1981, Pugh Computers specialises in software sales and licensing. It is described as one of the leading suppliers of software to the education and voluntary sector throughout the UK and Ireland. The company also offers high-level consultancy in networking and network security.

Last September, the Llanon-based reseller hit the £10m turnover mark and ended the financial year at just under £13m. According to Pugh: "The location of our business, which makes maximum use of today's modern technology, means that we do not need to be city-based. Our staff deals daily with establishments throughout the UK and Ireland and have the added benefit of living in one of the most beautiful regions of Wales."

It is this element, together with the ability to create employment in rural areas, which Pugh finds one of the most rewarding aspects of running Pugh Computers. "Helping individuals to achieve their potential through training and bringing on their skills is immensely rewarding. It is a key factor in breaking the £10m barrier," he claims, adding: "We try wherever possible to recruit locally."

Pugh Computers became an incorporated venture in 1991 when Mike Young joined the board as sales director. The company has grown to become a significant local employer with 18 full-time staff.

But it was not always Pugh's dream to work in the IT field, and unlike Microsoft's Bill Gates he did not start as a high school geek building computers in his backyard.

"I am an accountant by trade but was working for a mail order company selling sports goods to the education sector before I got into IT. I thought I saw a gap in the market and went for it," said Pugh, describing how he initially worked from a corner of his Dad's office before moving into his own premises. "First I bought an office just down the road and then the office next door - joining the two premises."

Pugh has only recently moved into Denver House but is already planning his next move. He says the company has outgrown even its current premises.

A prominent player in the Wales Fast Growth 50 index of Wales' top companies for the last two years, Pugh attributes the company's strong market position to its close working relation-ships with suppliers such as Microsoft, Macromedia and Adobe. Those partnerships have helped Pugh Computers develop purchasing programmes to satisfy the needs of education establishments and charities, and deliver low cost software.

As key vendors, Pugh also lists Network Associates, Symantec and Veritas which, it says, are also doing well. He adds that while security has boomed recently in the IT sector, in the education arena it has enjoyed steady growth over the last three years. "Security has developed into the second thrust of the business, which just goes to show how well it is doing," says Pugh, adding that because education is a budget-driven market it has very different stimulators to the traditional market.

"I would say the key to our success is to be very focused. My staff and I know exactly where we are going and we understand the customer. Good business management and the fact that we are very liquid and can seize opportunities as they arise are also very important," Pugh argues.

Pugh Computers has grown organically since its inception but is now considering acquisitions as a means to maintain growth. While Pugh would not divulge any details, he admits the near future is very exciting but despite his success he does not have dreams of creating a multinational organisation strung out across the globe. He believes that the company's success is as a result of his specific market knowledge within the UK and Ireland, and that expanding outside those borders could be detrimental to the organisation.

But while the future looks good, it is not without concern. Pugh sees new opportunities from Microsoft's governmental deals but also sees such deals as a possible threat to resellers.

"[Microsoft] has recently struck a deal with the NHS and is also developing a fixed-cost, model framework for government organisations."If we can cash in on the deals they could be extremely lucrative, but there is the fear that such deals could exclude the dealer," he says.

The NHS deal, struck in October last year between the health service and Microsoft, is a three-year agreement, based on a subscription model. A single annual transaction will replace the many thousands of transactions between healthcare organisations and the software vendor in previous years and means that local NHS organisations will no longer need to order licenses for any of the products under the agreement.

So, although there are challenges ahead, Pugh remains confident that the reseller can continue to grow.

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