Security distie Peapod goes into administration
High profile security consultancy/distie Peapod has gone into administration after attempts by parent company e-initiative to expand into Europe ran aground.
e-initative's businesses will operate as a going concern following its decision to go into administration on October 16. Jon Birch, director at administrator Numerica, told us it was looking to secure a rapid sale, with a number of companies already expressing an interest in acquiring the company.
"The core business is sound and we have the support of customers and suppliers," he told us.
Problems occurred for the business because of an over ambitious expansion by the group into Sweden, The Netherlands and Germany during a time when IT spending was going into decline, he told us. Rapid European expansion last year resulted in an unsustainably high overhead, forcing e-initative into administration earlier this month.
Eight people - including one director - have been made redundant but 40 core staff remain on board and the company is trading normally.
e-initiative is the holding company for Peapod UK Ltd and Peapod Distribution. Its businesses include security software distribution, security integration, professional services and consultancy. A research group within e-initiative focuses on developing IT Forums.
e-initative has "900 blue-chip customers", turnover of £7 million and recurring revenues of £2.5 million, according to an advert for the sale in the FT earlier this week. Its two continental subsidiaries have a turnover of £4.3 million.
The security market is one of the few bright spots in the struggling IT sector. Part of e-initative's problems come, we strongly suspect, from a failure of marketing. There was too much focus on its service to help employers assess how their email policies comply with business needs and legal requirements, Peapod's Email Auditing Programme (EAP), and a near obsession with promoting security certifications for BorderWare's firewall, for which it was one several UK distributors.
Neither did much to promote Peapod's own brand or build its main businesses of security consultancy and distribution, we believe. ®