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Esteem cuddles up to Oracle with reseller acquisition

Microscope contributor

Sun Microsystems partner Esteem Systems is taking the first tentative steps to expand into the Oracle software arena by acquiring small integrator Midas IT Solutions.

Set up in November 2009, Midas which majors on Oracle's database licenses, SLA Middleware and the Beehive collaboration suite, will trade as Esteem Midas with current managing director Rob Thompson remaining at the helm.

The software goliath Oracle has made no secret of its plans to closely integrate its apps with Sun hardware and Joe Connolly, chief executive at Esteem, hoped that by straddling both camps it would become more valuable to the vendor.

"We manage customers' servers but we have not been able to work in the Oracle market, this will give us access to those skills," he told MicroScope. 

Consolidation in the reseller channel is expected to pick up pace this year and Esteem has developed a 'buy and build' strategy centred on "owning the data centre".

Connolly said it was eyeing up other targets in the networking and managed services channels with the backing of its bankers and the blessing of VC partner Primary Capital, which owns 60% of Esteem.

The current Midas operation has no connection to Oracle reseller and e-commerce consultancy Midas Computer Services that Thompson set up in the 90s and sold to Compel in 2000, which was itself acquired by 2e2.

The brand name disappeared and Thompson, who was approached by several backers last year with a view to setting up an Oracle practise, decided to resurrect it but quickly realised it needed to be part of a bigger hitter.

"We weren't making a big enough impact in the market but the acquisition by Esteem will give us access to its client base and technical support," Thompson said.

All ten staff will remain at Midas and it will operate out of Esteem's London and Slough offices.

In the last audited accounts for the year ended 30 June 2009, Esteem's revenues declined 22% to £27.2m while profits dropped a 44% to £2m, due to the postponement of infrastructure projects which happened across the industry.

Midas turned over in the region of £500,000 in its first six months.

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