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Services for sale

A storm has been brewing in the Australian channel. And it seems we are now starting to witness the first of what could be many shake-ups in the ranks of Australia's integrators and services organisations.

I'm referring, in part, to Computer Associates' revelation last week that it is holding high-level talks with "a particular Australian services-oriented organisation", in the words of Alan Smith, CA's Australian managing director.

Smith couldn't be coaxed into divulging the name of the organisation in question, however it appears the race is down to three - Aspect Computing, Computer Power Group (CPG) and Data#3.

So what can we glean from this imminent takeover by CA of any of these highly successful services organisations?

We can view this as a trend taking hold in the services marketplace whereby vendors are discovering the unrivalled revenue streams created by a services arm. It certainly makes sense for vendors such as CA, for example, to go into a customer site, sell its Unicenter TNG management platform and then mention to the IT manager that "hey, we can put your network together, too".

And what about follow-up service calls if the network breaks down? There's another reason why a services addition would be a godsend for most vendors.

But the vendors are only one dark shadow that is looming over the heads of Australia's integrators. Big-hitting outsourcers such as IBM GSA, EDS and CSC are also squeezing them. Even though these outsourcers might have their sights set a tad higher than the likes of Data#3, ComTech and Praxa, there is always the chance that they could encroach on the turf of the second-tier services operators.

Encroaching on the market

And what's to stop a large Australian or multinational distributor from encroaching on the services market? The likes of Tech Pacific (if it could rid itself of the "box mover" tag) or an Ingram Micro could decide to buy a small Australian integrator to deploy solutions based around their vast product catalogues.

Although you could argue that this last idea is a bit far-fetched, I've learned that Australian channel organisations can never say never to any proposition, no matter how left field it may be.

You would have to have been living on another planet not to have noticed the rationalisation of the channel. Resellers, distributors and even integrators are being forced to re-engineer their organisations in a bid to offer added value to customers.

Whether that is through partnerships or straight-out acquisitions is not the issue. What is at stake is customer loyalty and if that means an integrator has to partner or be engulfed by a vendor then there aren't too many other options.

The next few months will certainly be stressful for Aspect Computing, Computer Power Group (CPG) and Data#3. For the chosen one, life with CA will never be dull. But for the two unsuccessful candidates there will always be tomorrow when another vendor could come knocking at their door on the hunt for a well-heeled services partner.


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