How does a Czech IT group get a contract worth billions for the European Commission?
It all started with a somewhat daring idea put forward by our colleagues from Brno, who decided to register then AUTOCONT for a tender organised by the European Commission for the supply of hardware and services for its data centres. After all, it costs nothing to try, as they said at the time. And they succeeded... Although in this case it wasn't actually a victory in the true sense of the word. They "just" won a seat at the table.
I see that you gesture to indicate really clear quotation marks on the word ‘just’.
Yes, I do, as although the signing of the so-called "frame contract" did not bind us or the European Commission to any future order, that in itself is worth many hundreds of millions. It implies that you’re at the stage where you meet the demanding qualification criteria, and are able to offer meaningful quality and service for some extraordinary European IT contracts. In an environment that is itself demanding in terms of IT infrastructure.
Even so, it took quite a long time before you got the first specific order.
It did, and we really had to do a lot to get it. Becoming part of the "procurement channel" was only the first step. We had become one of the five major European players allowed to supply and manage infrastructure and data centres for European institutions. It was only then that the "mini competitions" or "reopenings" could take place. These are actually blocks in which companies compete for 10, sometimes 20 million euros in the annual turnover of these services or supplies. They always compete for the appropriate ratio between price and quality – sometimes it’s 60:40 in favour of the quality of the services offered, while at other times, for example, the ratio is 70:30 weighted towards the price. Unfortunately, we had never managed to win anything. And we really had no idea why that was the case.
So what did you have to change?
Our approach. I was bothered by the fact that that we weren't able to outdo our competitors on price or the standard of our services, and that big contracts continued to go to the traditional players. I started looking for the causes and, as it happened, I came into contact with some people from Germany who were aware of our situation and wanted to talk to us about what we could achieve together. I was most impressed by how the people knew the environment, how familiar they were with the processes. At that moment I realised that we had to step outside our Czech bubble and move to Brussels. To be seen, to know the map, to show our readiness to work on some really big European contracts.
What did they say at home when you decided to found AUTOCONT INTERNATIONAL and started making frequent trips to Brussels and elsewhere?
They’re used to it. Not to mention the fact that, to be honest, I personally was missing the international scene a bit by then. I was involved in it for a long time, and in recent years had been focusing more on Czech business, which still has its limits. European or global business is a slightly different ballpark.
In what way, specifically?
Whether we like it or not, for most large manufacturers or business partners the Czech Republic is part of the CEE (Central and Eastern Europe) region. If you want to enter into dialogue with the largest manufacturers of servers, processors or infrastructure, it’s not enough to have good relations in the region. The Czech-Slovak branch of a global technology giant might keep acclaiming us as the best domestic distributor, but that still doesn't mean much in Europe. To enable us to succeed in European tenders, we also need an above-standard approach from these global manufacturers. If you’re in Brussels and work for the European Commission, one of the largest 'public' contracting authorities in the world, they treat you differently.
You mentioned your cooperation with the Germans. Did that come about by chance?
Totally. I happened to be alpine skiing in the Beskid Mountains when my phone rang. They said we should get together. But how? We were in lockdown at that time; not even the cable cars were running in the mountains, the borders were closed, and there were practically no flights. However, from the phone call it was clear that the person on the other end really knew what they were talking about, that they could put us in the picture and bring us closer to a contract. So, I started thinking about how to get across the border. That was a pretty partisan time, to be honest.
What did your superiors at Aricoma have to say about that?
We management types are not very corporate in our actions. I said, guys, I’ve got an opportunity on the table that could bring us a hundred million euros, but it might well cost us several million and turn out to be nothing, so what do you think? The matter was decided within a week, and then we found out how difficult it was to physically get to Brussels. There were only two flights from Prague. One to Stockholm and the other to Amsterdam. So I landed at the completely deserted Schiphol airport in the Dutch capital, and a German colleague I’d never seen in my life was waiting for me at the Belgian border. We met the manufacturers in the park, as there wasn’t a single restaurant open. They only had a few rooms occupied in the hotel, which was pretty off-putting. Yet within three weeks we’d put together a bid that finally broke the ice.
What do you think it was that gave you the chance to show yourself?
The fact that we were slightly disrupting the status quo there. Among companies that had been supplying the Commission for 30 years, we were something of a phenomenon. They’ve got everything up and running there, and are happy to just 'vegetate'. The Commission probably wanted to bring in a breath of fresh air. And, perhaps, to give a chance to companies from the new member countries, as it were. But that was all just circumstantial. The decisive factors in the tender itself were our creative approach and the support of our suppliers. At the same time, we were facing the challenge of how to supply technology to all the data centres of the European Commission, meaning all the directorates and organisations that come under the Commission. A total of 52 customers. At a time when, after years of stability, the world was hit by an unprecedented raw material and logistics crisis and a shortage of chips.
That must have been pretty nerve-racking.
It was an incredibly hectic time. During the holidays, we had to put together a team of people to handle the contract as a whole. We prepared it - but the orders weren’t coming in. When we looked into why that was and spoke to customers, they told us that the previous supplier had warned everyone to stock up in advance as 'some unproven supplier from the east' was coming in. After two months, orders suddenly started pouring in, but there were no longer any chips or cards on the market. We were suddenly unable to supply anything at all, and we heard from the manufacturers that it could be six months, maybe a year. Everything got complicated and the Commission was already starting to get anxious, as some of the European Union’s critical applications also run on that infrastructure. Such as the visa system and Covid certification. The Commission had made a promise to the Member States and suddenly it was unable to meet its deadlines. That's why we had to achieve the impossible and knock on all the doors. We worked our way up to the most senior global leadership positions at the most important suppliers in the US, communicating directly with the management of the manufacturer's supply chain. And with that, we managed to ease the whole situation off a little and gain the necessary priority at the factory level. I dare say that they started to see us differently after this.
What’s the situation like today?
They already know that we’re a partner who will do everything possible, and impossible. To be honest, our cooperation last year was already excellent, despite the ongoing problems in the supply chain. We did a good job and that’s evident within the company, too - in our extraordinary economic results. Most of all, however, we proved to ourselves that we have what it takes to be in Europe. Today we can rely on the fact that we already know something about how things work in Brussels. But also about relations with manufacturers at the global level.
Will you win any more contracts this year?
We’re currently involved in two major tenders. It would be great if we could turn at least one of those into another success. What’s important for me is that we’ve proven our ability to work for a highly demanding international customer and have fulfilled all our commitments and expectations. However, I know that our competitors now see us differently to how they did two years ago. They no longer underestimate us. On the other hand, we’ve made a name for ourselves as a standard supplier for the European Commission and have earned its trust. At the same time, we still have drive and a creative approach, both of which can play a key role.