Cut-throat competition from the likes of Dell, along with the wafer-thin margins that dominate the PC business, have claimed their latest victim this week, with Elonex revealing it has been forced into administration.
On Tuesday, it emerged that Deloitte and Touche have been appointed as administrators for the company, and that a petition has been filed in the Royal Courts of Justice in London.
Elonex, which is based in London, had grown since its founding in 1986 into an international business with offices in France, Belgium, Switzerland and Russia. It has won large government contracts, including a £25m deal to supply the troubled NHS National Program for IT (NPfIT) with PCs and a £150m deal to supply laptops and other technology to the Essex e-Learning Foundation Initiative.
According to reports, the move that plunged the company into administration came from a distributor, Computer 2000, which applied for a winding-up order.
The last large UK PC supplier to go under was Time Computers/Granville Technology, which went into administration in July of last year with debts estimated at £50m.
But while the crisis at Time sparked widespread acrimony, with MPs and others demanding an inquiry into the circumstances under which the assets of the company were removed immediately prior to its collapse, the apparent demise of Elonex is a quieter affair.
It appears the collapse was due to the sheer difficulty of the conditions in the PC market. Apart from an increasing emphasis on lucrative government business, the company had moved into the "Digital Home" market, selling large screens and TVs incorporated into home systems — an area with slightly better margins than those for ordinary PCs. Prior to its demise, Time Computers had tries a similar strategy, without success.
Elonex did not respond to requests for comment.
Talkback
Another one bites the dust! Am I the only one noticing the seemingly common thread in the financial losses of large corporations like of Elonex, iSoft & Multiplex is the UK government? Thousands of jobs are going down the drain in these large firms that, presumably, are being run by capable business and project managers with industry excellence under their belt. I can't help but wonder if something is amiss in the government procurement process or the government's project management & delivery expectations. Surely it would be in the this country's interest to review these individual cases and inquire into any commonalities. Can the UK turn the downward spiral related to public sector tendering into a win-win situation for both the government and the private companies involved?
"Computer 2000, which applied for a winding-up order". -- And for those English speakers among us, what does that mean? If a company goes bust, an explanation of why ought to be something more than a cryptic sub-clause!