Service Express International (SEI) started business as an enterprise Third-Party Maintenance (TPM) supplier in 1993. Its business is primarily based on post-warranty hardware maintenance of data center IT equipment – made up of servers, storage systems and network devices and also offers data center relocations, asset recovery and OS support. Headquartered in Grand Rapids, Michigan, in November 2019 it was itself acquired by New York-based private equity company Harvest Partners from Pamlico Capital.
At the beginning of this month, Service Express acquired its fifth company, UK-based TPM BlueChip, expanding on a business relationship they already had and making Service Express more international in the process. BlueChip’s business includes managed services, which Service Express will now be able to sell to its customers outside the UK and EMEA.
Previous acquisitions by Service Express were:
- Its first expanded within the US by buying Compu-Fix (based in Pittsburgh) in 2016, Delta Computer Group (New York state) in 2017 and SYMM-Care (Cleveland) in 2020 increasing its expertise and customer base in the process.
- It began its international expansion by buying Zensar’s TPM division (also in 2020). Zensar is principally a software company based in Pune, India and originally founded from ICL’s business.
- Buying BlueChip is significant in signalling an expansion into Europe beginning with the UK and into managed services elsewhere.
Last October, BlueChip’s founder Brian Meredith, unfortunately, passed away. Under his guidance, the company became one of the largest UK-based independent managed services providers, specialising in IBM Power (i and AIX-based) servers housed in its own Tier III/IV data center, which has a PUE rating of 1.1 and runs on electricity from renewable sources. Its latest/last published financial report (for the year ending in September 2020) shows that it made 54% of its £53.1m revenues from managed services, 36% from maintenance and 10% from hardware sales – also, that 97% of its revenues came from the UK. With the addition of BlueChip, Service Express will now service over 4k enterprise customers worldwide from its 50 offices.
It now becomes part of a company which is highly placed in Inc. 5000’s list of the fastest-growing privately-held companies in the US – posting an annual revenue growth rate of between 50% and 91% for each year between 2016 and 2020. Its outlook for the next few years is also very positive for a number of reasons. For instance:
- Beyond a handful of offerings (VPN, PCs, security software and services for instance) the pandemic has severely restricted the purchasing of new enterprise IT equipment.
- To address climate change, companies will need to assess the carbon emissions of their IT equipment not just in the electricity they use, but also in the energy that was used in manufacturing them.
- Hardware vendors attempt to lock their customers in by various means, including limiting the availability of BIOS upgrades to those who buy maintenance plans once (typically) 3-year warranties expire. This is despite the fact that some of them outsource all maintenance activities, while others offer their known Multi-Vendor Services (MVS).
TPMs don’t just offer cheaper maintenance prices than the manufacturer once the warrantee period is over; they can also enhance data center efficiency, help with inevitable future carbon audits and support operational management . For Service Express the addition of BlueChip gives it a strong position in a mature and valuable market. Now outside the EU, the UK is no longer a jumping point from which to address continental Europe; but then again I don’t expect this to be its last acquisition.