Channel veteran Force Technology has shut down its distribution business after key supplier Olicom pulled the plug on its long-standing relationship.
However, the company is no spent force just yet. Now under the management of former Fore Systems boss Charles Spooner, it will be reborn as an integrator under the banner of FTA Solutions.
As a result only six staff have been layed off.
Company co-principal and co-founder John Murray said the loss of long-time supplier Olicom had prompted the company to examine its options.
"We're not that big, we'd lost our niche so it was time to get out," he said.
Like Company 29, which also shut down its distribution business last month, the emergence of multinational giants like Ingram Micro was a deciding factor.
"If we had millions of dollars, we'd probably be taking the fight to them, but the fact is we don't," Murray said.
Force established its network integration arm, Force Field Computer Services, 18 months ago and turned over $2 million in its first year, with clients like Goodman Fielder and BBC hardware. According to Spooner, it is on track to do $10 million this year and his aim is to turn over $50 million in three years.
But Spooner was keeping his cards fairly close to his chest for the moment.
"We'll focus on a niche and we'll have some very interesting announcements to make," he said.
However, he has been working in overdrive to build up his sales and pre-sales support. Already, he has poached Simon Rachowski from Cabletron and Troy Soutar from Summerville.
"This was an area where we let ourselves down in the past," Murray said. "We didn't have the sales staff to enable us to protect our customers.
"But hiring the right sort of sales people is where Charles Spooner is very strong," Murray said.
Spooner is excited about the engineering strength of Force where, as Olicom's primary support provider, it has delivered services to customers from the "ma and pa shops through to Australia's biggest companies like Westpac and Coles/Myer.
"There is a great foundation here because the core engineering capabilities are very strong," Spooner said.
"So we have very good network engineering skills but small enough and light-footed enough to be responsive to the market."
Spooner said the staff he had let go were "distribution people through and through" that didn't have the skill sets to make the transition into integration. "We're a small company," Murray said, "and it's like a family so it hurts when you have to let people go, but we've tried to do everything we can for them."
Olicom's Australia country manager Claus Hansen claimed that Force had "not promoted Olicom as we would have liked" and that it and "other business issues" were the reasons why it terminated the distributor.
Murray, however, claimed that current Australian Olicom management "had not done any of the things you would have expected of a vendor in its support of a distributor".
Hansen claimed that Olicom now had a local support centre and a 24-hour hotline so resellers would not suffer from a lack of a support infrastructure. He said resellers could source equipment from Olicom's other distributor, Advanced Portable Technologies, and declared that it would sign "one of Australia's major distributors" to replace Force.
Industry lacking morals
While company co-founder Brian Winn will be less involved in the running of the business, he is going to remain financial controller for the time being. However, John Murray has decided its time to "look for something new to do".
Speaking exclusively to ARN, Murray took something of a parting shot at the industry he has lived and breathed for so many years now.
"I'm fed up with the lack of morals and ethics in this industry," he said. Vendors set the pace in "unethical behaviour" but resellers too, particularly the larger players, show no loyalty and are more than likely to turn their backs on distributors they had partnered with.
He said not many in the channel were sitting comfortably.
"Most businesses out there are sitting on a knife's edge," he claimed. "For many, it would only take one of their major customers to go belly-up and it's all over."
New general manager Charles Spooner will take a stake in the business with an option to buy out both Murray and Winn.