Tasmania's two largest resellers followed global channel consolidation trends last week with the announcement of a merger designed to strengthen the combined company's services revenues and shift away from box-moving.
Computerland Hobart, a fast-growing corporate and government reseller, doubled in size last week by absorbing the Hobart and Launceston operations of major local rival Sleebs Computer Industries.
The buyout creates a strong homegrown defence against mainland and international prospectors. Combined revenues from corporate and government clients are currently running at $20 million annually, according to Euan Hills, CEO of the beefed-up Computerland. Hills rejected the notion that this was the only way in which he and other local resellers could combat national organisations attempting to sell on its turf, but he did say it was needed to boost services.
"We compete against mainland resellers very effectively and that is not the reason for this merger," he said. "We had appeared on the top-100 list of the fastest growing companies in Australia for three years in a row and then last year we weren't there.
"We weren't going backwards but we weren't going forward as quickly as we would have liked. In a confined market like Tasmania, you can have natural growth for a fair period of time but after that your next strategic move has to be by acquisition.
"We have led the field with that by taking out the nearest competitor," Hills said.
Currently relying heavily on hardware revenues, the new goal for Computerland is to increase services revenues from 10 to 30 per cent within 12 months and then further build on that in the future.
With strong network and PC markets and experience in high-end installations, Hills was "looking forward to growth opportunities" for Computerland as Y2K issues come to the fore. "The merger puts us in the top 5 per cent of resellers in Australia on turnover," he said. "It is an investment in Tasmania. Either or both of us could have been snapped up by a national or international organisation and neither of us wanted to go that way."
Of the 40 staff affected by the move, there were only three redundancies from "administrative positions that were duplicated", Hills said.
Computerland's Larry Podmore will head up the sales team, while former Sleebs Hobart manager Allan Sleebs is charged with services growth. Industry stalwart Sleebs is taking a bit of a load off after selling his business and concentrating on other commercial interests in Victoria.