Integrators facing doom and gloom

Integrators facing doom and gloom

Australian integrators face bleak futures because narrow-minded managers have failed to react to changes in the marketplace, according to the latest Gartner Group research.

And integrators interviewed by ARN agree that those which don't soon reach critical mass and haven't shifted from being box movers to service providers are destined for niche status or oblivion.

"It's been our experience that companies have to get big, get niche or get out," said Nathan Cher, Com Tech's technical director.

Irene Vervliet, Anite Network's general manager for sales and support agreed that "plain vanilla flavoured integrators" that aren't services-led are "destined for a rather rapid demise".

The Gartner findings discovered that "most channel organisations are trying to grow at twice the rate of the market", even though confidence in the market has plummeted, says Gartner senior analyst Mitch Radomir.

"The outcome of this will be that the market is going to be extremely competitive and that margins are going to continue to be squeezed." And this will make it near impossible for integrators that still rely on product margins for profits.

To succeed, integrators need to have invested in the infrastructure that will enable them to provide the services that users are crying out for. According to Radomir, this hasn't happened and integrators don't have the expertise to provide services for cutting edge technologies.

"Management is not thinking about transitioning, and they don't have the critical mass that would give them the funds they need to invest anyway."

"We don't seem to have managers who look forward, they're just focused on how do they survive the next three months. A lot of management comes from the time when product was king and margins were high."

However, if those interviewed by ARN are any indication, integrators have now seen the light and are moving to boost their services infrastructures.

Whether they can move fast enough is another question, though.

"We have repositioned our whole organisation to adopt a services led strategy," said Vervliet. "Customers are looking for and expecting a higher level of service."

Vervliet agrees customers are looking for total solutions, however she claims that solutions do not necess-arily have to come from the one company. "If we cannot provide a total solution we will partner. Even companies as big as IBM and the other outsourcers believe they can't do it all themselves."

Brian Walshe, marketing director at Praxa, also doubts any one company can do it all itself.

"I don't think there's ever going to be a super integrator - it just doesn't make sense because it is unlikely that any one company can handle all of the requirements."

One company that seems better positioned for this than most is Com Tech. According to Cher, his organisation has already invested heavily in a broad services infrastructure and its expertise in new technologies.

"For us to be able to do our job, we have to make an investment in train- ing and infrastructure or equipment because if we don't we are going to fall short of adding value to our customers," he said.

"And we try and stay ahead of the wave and introduce a new technology or two each year - like e-commerce and videoconferencing this year."

Cher does believe that if smaller integrators specialise in leading edge, niche technologies there will always be opportunities to work with the larger integrators like Com Tech.

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