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November 14, 1994


By CBR Staff Writer

The official rationale for bringing together Kalamazoo Software Services Ltd and the maintenance services unit into the newly-formed, 300-strong Kalamazoo Computer Solutions (CI No 2,523) is that it will satisfy increasing customer demand for one-stop shopping. However, a more plausible reason is that Kalamazoo, founded almost 100 years ago by two Quakers, has found many of its major markets are static, including the motor trade and printing, and Kalamazoo is looking to its computer arm to increase the company’s growth. The group, which is publicly-quoted, but has 51% of its equity held by a company trust that distributes share dividend payments to staff, is emerging from a rocky few years in which it nearly went bust. Some tough policy decisions, including staff lay-offs to bring the headcount down to its present level of 1,300, have pulled the company around. In the 1992-93 financial year it managed to climb back into profit, and last year made a UKP6.3m profit on turnover of UKP61m. The core of the newly-formed Computer Solutions arm is its business as a Tetra Ltd value-added reseller, which brings in about UKP25m a year, but the aim is to grow the division up to a turnover of UKP40m by 1996. Over half this growth will come from acquisitions, and the division is sharing a UKP20m war chest allocated by the group for acquisitions during the rest of its financial year, to the end of next March. One of the first products on its shopping list is a UK open systems accounting system that it will be able to sell at the top end of the Unix market, without conflicting too much with its existing Tetra business, where bread and butter sales are in the tens, rather than the hundreds of thousands. Kalamazoo says integration is the name of the game at the moment when it comes to accounting sys-tems. The days of stand-alone systems are over and accounts staff want to be able to share the desktop goodies used by everyone else. The company sells most of its current systems running under Santa Cruz Operation Inc Unix or Hewlett-Packard Co or Acer Corp Altos hardware, but also has considerable Novell Inc expertise in-house. Kalamazoo believes demand will grow for accounting applications running over distributed NetWare systems. It it is keeping a close eye on the Novell statements about plans to bringing UnixWare and NetWare together.

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