Brian Killin is managing director and principal shareholder of PowerCorp, a Sydney-based distributor of specialist networking solutions spanning remote access, wireless LAN, and multi-protocol print servers.
Known by many as a man with a gift for picking winners, Killin has been very successful in bringing overseas companies into Australia right at the crest of their international heyday.
Back in 1982, Killin, who was running a company called Data Peripherals, was the first person in Australia to recognise the potential of a small company of 17 people based in a garage in Provo, Utah. That company was Novell.
Killin secured the exclusive distribution rights for Netware in Australia. The rest is history. But it wasn't the only success for Killin. PowerCorp also discovered Centrum Communications -- now the basis of 3Com's remote access server products, and the list goes on.
But those were the golden years, Killin laments. The Australian distribution and reseller markets have undergone considerable upheaval in recent years.
Tough market conditions, especially in the hardware channels, have caused many a dealer to bite the dust. As a result, the industry is currently going through an aggressive period of rationalisation.
While volumes have escalated dramatically for businesses in the channel, sales margins have fallen to such an extent that only the largest organisations have the infrastructure to survive.
For most channel businesses in Australia, Killin believes the current business imperative is simply running "faster and harder" against the current of harsh market realities flowing in the opposite direction.
Killin decided some time ago to get out of the rat race and concentrate on niche segments of the networking market.
Formed in 1993, PowerCorp is aimed at addressing the specialist networking needs of Australian organisations and, as a result, focuses on new and emerging technologies from Australia and abroad as well as segments of the market which are "poorly served" at the moment.
The art of specialisation
Killin said less than 5 per cent of dealers in the local networking industry could describe themselves as specialist. "We're not in the business of 'going along for the ride'," he said.
Currently, PowerCorp is looking at the areas of serial to Ethernet conversion, which covers connecting simple RS232 devices, such as clocks and alarm panels, to a network.
PowerCorp is currently a $3 million company -- not bad for an outfit with four people -- growing at 30 per cent per annum. Essentially, the company focuses on what Killin describes as the multiprotocol segment of the market where an understanding of Novell, NT and Unix-based networking are all par for the course.
Volume is not what Killin's business is about.
"We are looking for the right things to do instead of the most," he said, and it is this fact that he believes has allowed the company to maintain an intense focus on the customer, offering pre and post sales support via the company's value-add model.
Here, he believes that values such as customer service and vendor integrity are still valuable currency. The barriers to entry remain high with little room for businesses lacking in technical expertise.
Outside of this is a cutthroat world where the dollar has blinded vendors and suppliers to the real needs of businesses, Killin claims.
"The integrity has gone out of our industry -- marketing people are throwing ideas around as though they are products," Killin said.
Electronic commerce, according to Killin, is one such area.
While business automation is something Killin has embraced from the beginning, he claims that electronic commerce is at the mercy of marketing people trying to sell a concept rather than an actual solution.
One area of deep concern for Killin is the skill set of Australian channel businesses.
Killin created the CNE program in Australia back in the eighties and despairs at how little has been achieved.
"On the whole the levels of expertise within the Australian network reseller channel are hopeless.
"Even resellers with CNE certification often display an amazing lack of standard skills."
Certification is just another in a long list of elements to be tainted by the current business climate, Killin said, adding that individuals are simply seeking to improve their resumes while vendors are exploiting certification as a marketing exercise.
Ever since the whiff of the quick buck drifted beyond the realm of specialist IT distributors and resellers, the industry has been besieged by hordes of entrepreneurs looking to cash in on the staggering volumes of hardware and software being churned out by overseas manufacturers.
The trade off between the customer's needs and the business realities governing vendors and channel partners has seen IT become increasingly commodity-based. Service has suffered as a result.
The way Killin sees it is that the opportunities that once made IT so appealing no longer exist.
The business model used to be simple: high-unit cost and high volume. Anyone could make a profit back then. But what should be abundantly clear from the current pattern of rationalisation across all IT industry segments, is that the old ways just "don't cut it" anymore. Well, at least not for small players.
Rivals join forces
Last year was perhaps a cornerstone for the networking IT industry in Australia as well as the US and Europe.
On the local front, Dimension Data acquired Australia's oldest home-baked networking com-pany, Datacraft. Long-term rivals Banksia and Netcomm joined to form Sirius technologies. McAfee Associates and Network General became Network Associates. Then there was the news of Compaq's acquisition of Digital, briefly preceded by Cabletron's acquisition of DEC's networking business.
Killin sees the Compaq-Digital acquisition as the most significant event for the Australian channel in a very long time.
Specifically, he envisages massive change among the respective channel partners of the two companies as Compaq attains its desired status as an enterprise vendor.
This, he claims, will lead to a situation whereby Compaq will be forced to deal directly with large clients, denying the channel large chunks of business.
"Companies which had previously been traditional rivals will look to join forces as business in the channel dries up," Killin said.
Previously, the best Compaq could offer was the best its largest reseller could offer, he said.
"But I'd put Compaq on par with the big boys now."