back to article RM: Killing our PC unit hit our top line, but our bottom line is pert

Murdering the PC building biz was always going to result in some top-line slippage for Brit specialist education tech supplier RM, but the move to shutter the production line hasn't hurt profits, quite the opposite. The Oxford-based biz today reported half-year numbers to 31 May with sales down more than 22 per cent to £92.1m …

  1. Terry 6 Silver badge

    Politics

    In many ways RM has followed the pathway set by politicians.

    As education has been pushed away from letting teachers get on with the job, and replaced valuing teaching with valuing what can be measured a vast amount of education spending has been moved into corporate coffers.

    Once a local authority team would have fixed the computers in their schools. And the teachers would have assessed their kids themselves. The money would have been used for educating the kids, buying equipment etc.

    Now the schools end up with an expensive commercial maintenance contract and money floods into testing and assessment materials, published schemes and so on, instead of equipment.

    1. Anonymous Coward
      Anonymous Coward

      Re: Politics

      Not sure where you got that from!

      I work in a school (which is part of a group of Academies) and the school employs its own network manager and technicians to look after the network and associated infrastructure. This is an entirely typical setup, at least in my part of the SE of England.

      The only schools which have outsourced IT around here are those who were forced to by the abortion that was BSF - a terrible scheme which involved people running school infrastructure who had no idea of how it works in real life. (Trying to make teachers phone to lodge a support call for a whiteboard not connecting to a PC, for example, whereas in real life they send a pupil into the IT office, someone goes to the class, sorts the issue in a minute or two and the job's done). Needless to say that as soon as they could, schools that were BSF'd for IT went back to the traditional, on-site support method. Heck, some BSF schools even broke out of Northgate and RM's control whilst they were still contracted to use them, figuring that the penalty fees were worth paying to regain control for themselves.

      We used to use RM, but they were very overpriced for what you received. Just buying Lenovo or HP machines saved around £100 per machine straight off. We moved to a "vanilla" Windows 2008 network, ditching the expensive and somewhat lobotomised RM Community Connect software, which saved even more money - we no longer have to pay a tax on every PC, instead our licensing is managed on a "number of full-time staff" basis. That gives access to Windows, Office, SCCM and we can upgrade as and when we want to, rather than waiting for RM to come up with a custom package.

      Good riddance to RM, in my view. They were far too expensive for what they offered.

      1. Terry 6 Silver badge

        Re: Politics

        I'm thinking more about the primary, special and smaller secondary sectors Some still do have Local Authority teams, with an SLA the school buys into.

        Bigger schools can employ a tech team themselves.

        More to the point, as you note, schools get better value for money by not buying a RM box, and RM make more money by selling into a market that has become geared up to schools paying for commercial services of all kinds.

  2. Skullsmasher

    I for one will not be sad to see to see the demise of RM. Having worked in the education sector in the past, I have seen them charge customers to alpha/beta test software for them & provide no documentation. Their hardware was always ridiculously overpriced & their installation engineers didn't seem to have a clue.

    Their demise cannot come too quickly IMNSHO.

  3. Nuke
    Headmaster

    Easier to Take Buying Depts for a Ride

    RM have discovered that selling services gets higher profits than selling hardware.

    There is no logical reason for this, only a psychological one. It is deep in people's culture and instinct to look hard when they buy a physical thing, and are more likely to look for a bargain if they can. OTOH, people lose their bearings when they buy a service because it is an abstract thing, and are afraid if they get into a discussion about it that they will reveal that they don't understand (as they usually don't). Also, they are usually on the rebound from paying for the physical thing.

    Another example is gadget shops being so keen to sell extended gurantees - often regarding the sale of hardware as merely a vehicle to sell the extended guarantee. My father-in-law for example always bought a whole raft of paperwork "extras" when he bought a TV or washing machine; he hadn't a clue what they were about but didn't want to admit it. He thought he understood the hardware though - because he could touch it and weigh it in his hands.

    1. Terry 6 Silver badge

      Re: Easier to Take Buying Depts for a Ride

      Nuke and Skullsmasher

      I'd say it was more that RM always sold an implicit service to schools, going back to the early days, supplying the expensive hardware with a package of reassurance - in effect saying "Don't worry about anything, leave it to us, we'll do it for you and you know it will be right because we specialise in schools' computers".

      And schools wanted that and anyway felt they had to conform to what all the other schools were buying. The educational equivalent of "Nobody ever got fired for buying IBM". LAs recommended them for that same reason.

      Which was fine before computers and even networks became a commodity item. Cost counts and RM's premium for supplying school friendly hardware isn't what it used to be. For a start, in the old days, it was that the 380z and 480z machines were solid enough to take the abuse that schools worried their small stock of expensive computers might suffer. These days decent computers are a fraction of the cost, and schools have many more of them. They won't pay a premium for robustness. And the LAs won't recommend them for the same reasons - preferring to negotiate a good volume price with a supplier.

  4. Mikel

    Quit the unprofitable business.

    PCs aren't a profitable business.

    1. itzman

      Re: Quit the unprofitable business.

      Well they are, but not in the way RM wants them to be.

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