Computers manufacturer/marketer Systemax announced yesterday it’s getting out of the ProfitCenter Software (PCS) hosted software business. The company is working on transition plans with current customers and not taking on any new hosting arrangements.
Founded 2002, PCS is a java, Web-based order management and e-commerce system. Systemax chairman/CEO Richard Leeds said in a release that the company has been unable to profitably market, sell and implement the software on a hosted platform model.
The PCS segment generated less than $500,000 of the Systemax’s total revenue of $3.0 billion for 2008.
With its SaaS approach, PCS certainly blazed a new trail, says Curt Barry, president of multichannel operations and fulfillment consultancy F. Curtis Barry & Co. “Every time a vendor or resource fails in our industry, to me it’s a tragedy,” he notes.
Barry’s company began receiving several calls from PCS clients about the shutdown last Friday. It’s now working with several PCS users to help them make transitions to new vendor platforms.
An orderly decision and transition realistically “needs to happen in the next six to eight months for companies,” Barry says, based on a recent discussion with PCS president John Marrah.
Barry says that Marrah assured him that Systemax will do everything it can to help the current PCS clients. He also says Systemax is actively looking for a buyer for the application and technology used in the PCS product.
As a result of the consolidation, most of the PCS workforce will be leaving the company, while the remaining PCS workforce has been consolidated into the Systemax’s Port Washington, NY, location.
These and other PCS-related actions are expected to result in incremental one-time pretax charges to earnings during the rest of this year of about $4 million to $5 million. Excluding these charges, Systemax expects the consolidation will save more than $10 million annually.
Systemax bought the CompUSA brand, trademarks, and e-commerce business in February 2008, and late last month it won a bankruptcy auction for the e-commerce business and intellectual property of Circuit City Stores. The company also includes the Global and TigerDirect brands.