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Compugen targets Southwestern Ontario with Orbex acquisition

Orbex says it needed more resources to help its clients grow to the next level

One of Canada’s largets IT solution providers has gotten a little bigger, with Compugen Inc. announcing its acquisition Thursday of Orbex Computer Systems.

Orbex, a solution provider with offices in London, Guelph and Brantford, has been focused primarily on serving small and medium-sized businesses in the Southwestern Ontario (SWO) market for 15 years. Richmond Hill, Ont.-based Compugen was ranked 5th on the CDN Top 100 Solution Providers` list for 2006.

As both companies are privately held no dollar figures were released. Some 15 Orbex employees will join the appx. 800 person team at Compugen including former Orbex president Dwayne Mott, who will stay on as branch manager for SWO. There were a few layoffs resulting from the acquisition, and two Orbex employees decided not to join Compugen. The three Orbex offices will be maintained.

Harry Zarek, president and CEO of Compugen, says while Compugen is a national organization the SWO market is one where they haven’t had a strong boots on the ground presence. That will change with the Orbex deal.

“This was an opportunity for us to expand our business fairly strongly in the region,” said Zarek. “It’s a very large market. My view is the addressable market in SWO is hundreds of millions of dollars in terms of IT products and services.”

The two companies began partnering about a year and a half ago, says Mott, as Orbex began to realize it needed help delivering some of the more resource-intensive services its clients were beginning to ask for.

“We’ve been growing our footprint out here, but a lot of the stuff we bump our heads against are the processes and resources you need to deliver a solution (like unified communications),” said Mott, adding while Orbex was just beginning to look at Cisco unified communications, an area Compugen has achieved gold certification in, his clients didn’t want to wait. “So I’m behind the eight ball, trying to deliver solutions to my clients they want today.”

Fundamental changes are occurring in the industry around areas like managed services, VoIP and service delivery, requiring SIs to retool to stay ahead of the curve, and on its own Mott says Orbex was simply unable to upscale quickly enough to meet customer demand.

“Resources within Compugen are a bazillion times what I’d ever have,” said Mott.In addition to better serving the existing client base, Zarek says as part of Compugen the Orbex team will be able to go after on larger accounts than before.

“I believe their sales force is qualified and sophisticated enough to be able to do it, they just didn’t have the tools and the technical skillsets,” said Zarek. “Now they’ll be able to do that.”

That’s echoed by Mott, who says Orbex was often excluded from the reasonably-sized opportunities in the SWO market because it didn’t have the national resources to deliver services to, say, a sister-plant in Edmonton.

“When we’re going out to talk to folks now as Compugen, our tech and sales teams are more confident that they can deliver, and they can step it up,” said Mott. “The ‘we can’t go talk to them because’ impediment is going away.”

At the vendor level, while there is a great deal of partner overlap between Compugen and Orbex there are a number of Orbex vendor partners, such as Sage and Lexmark, that Compugen hasn’t worked with. However, Zarek says those decisions will be left up to Mott as SWO branch manager.

“We’ve found there’s a tremendous amount of regionalization in Canada,” says Zarek. “The products customers want in Quebec or B.C. are not always exactly the same, when you get to some of the specialty products. We’re going to let that evolve naturally.”