Acquisition-hungry integrator CNI will not find it easy to secure a foothold in Western Australia, despite its recent buyout of local networking specialist ACT Networks.
The warning came from Garry Henley, managing director of WA integrator AlphaWest, which has long held a prominent integration position in the West.
Last week, CNI Group managing director Lyle Potgeiter suggested that AlphaWest's current dominance of the WA market would soon come under fire now that it has a challenger in the combined CNI/ACT Networks conglomerate (ARN March 24, page 5).
"Firstly, we're flattered that they see us as the predominant player in Perth," Henley revealed.
"We've just kept our head down for 10 years and built the business. We're a business of 270 people and $50 million in revenues."
Henley said that Perth generally represents between 6 and 10 per cent of the IT spend in the products that they deal with, so it's a very small marketplace compared to Sydney and Melbourne.
But he was quick to describe Perth as one of the toughest markets in Australia.
"All the nationals recognise that it's a very difficult place to be successful. It's very, very competitive, and most of the nationals [resellers] have difficulty succeeding such a long way from Sydney and Melbourne where generally their direction is set."
According to Henley, WA is wary of large multinationals putting a stake in the ground and saying they're going to take over, and he predictably played the local card.
"Alpha West brings a high degree of commitment to the state. We've built a broad-based business with five major lines and a strong product/service mix - network integration, outsourcing, training, software development and human resources.
"It's a stable business and we've moved out to regional centres including offices in Bunbury, Geraldton and soon in Kalgoorlie."
Henley said that most national and multinational vendors and integrators have already established a WA presence, so there is nothing new in a company like CNI coming to town.
"The question is," he said, "are deep pockets and press releases enough to make a difference?"
Commenting on ACT Networks, he said the network specialist is quite focused in its niche market around Novell, and particularly in education.
"We rarely bump into them in the top corporate accounts, which is the market they have said they will move into, so they will be coming from a small base."