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Buy, buy, buy

Buy, buy, buy

Most people thought last year was acquisition-mad, but if the first couple of weeks of 1999 are any indication, then "you ain't seen nothing yet".

At this time last year, seers were making predictions surrounding the likely entry into Australia of the big three international distributors. It never really eventuated. Already this year, as our front page story indicates, Ingram has finally declared they're getting serious about the Australian market by making a takeover attempt for Electronic Resources. And if our mail is on the money, it won't be too long at all before you see another of the big guns, most likely CHS, join the fray.

Observers last year predicted the Australian channel would shake out, with a small number of larger players emerging as reseller powerhouses. Certainly that trend began last year, but 1999 is set to be the year where the channel seriously consolidates. Already, we've begun the year with Data#3 taking over CICtechnology in Sydney (see page 20), in a bid to establish itself as a tier-one integrator.

Then last week, two of Australia's largest software developers made headlines for acquisitive actions, one selling, one buying. Leading local antivirus developer Cybec sold out to global behemoth Computer Associates, while Solution Six acquired NSW developer PKF (see page 6 ).

Last year, a number of experts warned the channel that they needed to "get big, get niche or get out". There are a lot of companies out there that seem to be embracing that philosophy. After all, consolidation is not unique to the IT industry. As almost each and every market has evolved to maturity, the same pattern has emerged. Two to four very big players have emerged supreme, while the rest have moved to establish themselves as boutique operations.

Still, I suspect the IT industry is still growing at such a phenomenal rate that there are still plenty of opportunities for your small-to-medium general reseller or integrator and that the call of "get big, get niche or get out" is premature. Certainly, it's a trend to be wary of, but I wouldn't be advising anyone to get out, just yet.

I'd love to hear your thoughts on the matter. Are you realigning your business to fill a niche, or getting ready to buy or sell? Or are these lines just propaganda espoused by those in the best position to benefit from those scenarios? E-mail me at philip_sim@idg.com.au.

Happy New Year

I'd like to extend a heart-felt Happy New Year to all our readers. We'll be introducing a number of exciting innovations early in the year, but as always the foundation of what we do this year will be to interact with the reseller community so we can most effectively represent the "voice of the channel". So as I've done before, I welcome you to contact myself or any of the editorial team, with suggestions, news tips or issues you'd like to see covered. So much of what we do today is driven by you. A lot of Web sites have logos at the bottom of their home page with tags like "Powered by Lotus" or "Powered by Cisco". At ARN, we're definitely "Powered by Resellers"!


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