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By | Paul Kunert 2nd August 2011 10:12

Bytes swallows Security Partnerships

Microsoft LAR buys its way into security cloud

Surrey-based Bytes Technology Group has swallowed Security Partnerships (SP) in a bid to start reducing its software division's reliance on Microsoft licensing.

Bytes has forked out for a couple of Xerox concessionaires in the past half decade, buying Xclusive in 2006 and Planflow Systems two years later, but has been relatively inactive ever since.

"IT Security continues to be high on our customers' agenda and the more we can help and support their business the better it is for ours," said Neil Murphy, Bytes Technology Group's group MD, in a statement.

The need to expand into alternative technologies was apparent in Bytes' fiscal 2011 numbers, with nearly 14 per cent growth in sales to £149m flattered by two one-off NHS true-ups with Microsoft worth £55m.

But Bytes is also facing another major challenge: Microsoft is planning a massive cut in fees that large account resellers (LARs) make on licensing sales to the largest enterprise customers from October and also plans to up incentives for mid-market customers.

The deal struck with Reading-based SP – which was founded in 1999 and flogs perimeter and data security, as well as offering risk assessments and cloud security – is a step to build up Bytes' biz in that mid-market segment.

Other resellers including Microsoft LAR Trustmarque are also taking steps to expand into IT services outside of their legacy licensing operation.

Murphy said SP has a turnover of £10m but it filed abbreviated accounts at Companies House for the year to 31 July 2010, indicating it has a turnover less than £6.5m, a balance sheet totalling no more than £3.26m and fewer than 50 staff on average. ®

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