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Insight-PCM deal opens integration, service opportunities
Insight CEO Ken Lamneck says the newly closed PCM purchase will augment the combined company's managed service offerings, add scale to its product business and boost efficiency.
Insight Enterprises, having closed its $581 million acquisition of PCM Inc., will now work to integrate PCM into its SAP platform, while looking for growth opportunities in areas such as supply chain optimization and managed services.
Ken Lamneck, CEO of Insight, discussed the post-Insight-PCM acquisition landscape in an interview. Insight, a technology solutions provider based in Tempe, Ariz., in June agreed to purchase PCM, a provider of IT products and services headquartered in El Segundo, Calif. The deal closed Aug. 30. For Insight, PCM will add more than $2 billion to sales and expand its global reach in Canada and across the Atlantic, where PCM provides access to high-profile customers in the United Kingdom.
The Insight-PCM transaction also marks the continuing consolidation of the IT channel, as companies seek opportunities for greater scale and broader offerings.
Acquisitions can also open opportunities for rationalizing internal systems, and that is part of Insight's plans for PCM. Lamneck said PCM runs multiple ERP systems, adding Insight will "integrate them to our SAP platform." That task will take a couple of quarters, he noted. Insight runs on SAP ERP Central Component.
"That will create lots of synergies and efficiencies," Lamneck said, referring to integration on a single platform.
Tapping managed services
PCM also contributes to Insight's managed services portfolio. Lamneck said the acquired company has "quite a bit of managed services in their current footprint."
Ken LamneckCEO, Insight
Those services, which include service desk support, typically are related to the products PCM offers its customers.
Managed services are wrapped around PCM's cloud offerings, which include Microsoft Azure and Office 365, Lamneck added. PCM is a Microsoft Cloud Solution Provider. He said PCM's cloud lineup is "built on top of a good engine to really support their clients as we drive more toward a consumption model."
PCM's cloud business helps Insight tap into the midmarket customer set, Lamneck noted.
Scaling the supply chain business
Lamneck said the addition of PCM bolsters Insight's supply chain optimization business and procurement platform, through which customers can purchase hardware, software and services. He said PCM won't add any net-new suppliers, but will provide greater scale. The combined companies offer products from such vendors as Cisco, HP, Lenovo and Apple.
Product sales will continue to be an important part of the combined companies' business, as it is for other channel partners selling hardware amid the growth of managed services and cloud consulting. Lamneck estimated three-quarters of Insight's customer projects include an opportunity to provide hardware.
Insight's connected workforce business handles the procurement and management of laptops, tablets and mobile devices. Both that business and its cloud and data center transformation business contain a heavy product component, Lamneck said.
Emerging technologies such as AI and IoT also call for hardware. Lamneck said IoT projects drive demand for edge gateways and specialized hardware devices for collecting and processing data.
"We deal with very few clients … that don't have some aspect of hardware," Lamneck said.