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June 17, 1990


By CBR Staff Writer

With its interim results due later this month, Hoskyns Group Plc is likely to report that it facilities management division with around 90 clients, now represent over 50% of the company’s revenue. In the first six months of this year, Hoskyns Facilities Management has won 14 new contracts, and is about to open a London data centre to complement its 60 UK sites and 12 large data centres. The division has 90 clients, and proudly claims that it has only lost two customers to competitors out of the 200 that have passed through its books. Of those 90 clients, 50% are in manufacturing, 20% in finance, retail and distribution also accounts for 20%, and the remaining 10% are in the public sector. Hoskyns Facilities Management is very much a UK company, and although it has a presence in France and Holland, continental Europe is virtually virgin territory. Peter Falconer, associate director for marketing in facilities management, says that the company will expand across Europe, but it is a gradual process and will probably follow the European progression of existing clients. As regards the US, Falconer says it possible that Hoskyns would provide facilities management services, but almost certainly as part of its other US-based activities. He believes that facilities management comes in an infinite number of combinations, but in simplistic terms, Hoskyns will either manage day-to-day operations, or assume entire responsibility for a company’s information technology activities, including strategy and development. He says that approximately 60% of clients fall into the first category, although it seems certain that the remainder are the more profitable. The degree of autonomy within each contract varies, and depends very largely both on the nature of the inherited installation and objectives of the user. If Hoskyns has entire responsibility, then it frequently buys the equipment and employs existing data processing staff. That could then entail buying new equipment, upgrading existing machines, or changing a company’s hardware platform. Falconer acknowledges that a change or upgrade may be necessary, but it would have to be justified. Swapping environments creates enormous problems in terms of software, and although that doesn’t arise when changing from IBM to a plug compatible manufacturer, he maintains that there would have to be good reason for such a move. Falconer’s says that the consequences of IBM’s facilities management contract for Eastman Kodak (CI No 1,228) are two-fold. It endorses the business, and means there is more competition. However, while users may benefit from single source supply, they are unlikely to get get independent advice and could be tied in very easily. He seems fairly sanguine about the IBM threat, and says that both DEC and ICL have been in facilities management for years. The difference between those companies and Hoskyns is that they regard it as strategic sales tactic and often part of a bundled deal. Despite the For Sale sign that GEC Siemens pinned on Hoskyns, Falconer doesn’t believe the company has been ad versely affected. He dismisses the notion that faci lities management may be hived off and sold as a separate entity since it needs to draw on the skills and resources of other divisions. Nonetheless, it seems that GEC Siemens is asking a high price for the highly profitable Hoskyns. There are probably few companies that could afford it, and the ones that spring to mind are large US telecommunication corpor ations, the Japanese, and a currently acquisitive IBM but GEC Siemens and the market may be asking too much for it in today’s climate. – Janice McGinn

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