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Editorial: It's all about convergence

Editorial: It's all about convergence

Both stories on the front page of this week's ARN (July 27 issue) can be summed up in a single word - convergence. While it means different things to different people, it is the most pervasive trend in the IT, telecommunications and consumer electronics industries today.

The CEO of the world's largest IT distributor, Greg Spierkel, has made it quite clear he wants Ingram Micro to be a major force in all three departments. And work is already underway to make those ambitions a reality.

Locally, it has already been pushing the digital home concept more actively than its competitors; most notably through a dedicated area in the annual ExpoTech show it inherited through its acquisition of Tech Pacific.

But the news that it has agreed to pay about $US200 million for a top-end home integration distributor takes those ambitions to a whole new level. Should everything go to plan, it will use the skills it gains via that purchase to build standalone CE business units in the US, Canada, across Europe and Australia within the next two years.

This will open up a whole new area of business for Ingram and its vast army of resellers across Australia. While it won't be an opportunity for everybody, it is a potential pot of gold for those partners that have, or are willing to build, the relevant integration skills. In addition to its CE drive, Spierkel said Ingram has also been forming relationships with heavyweight telecommunications carriers in the US during the past six months. No doubt this is also aimed at building out its triple play skills and it will be interesting to see what bundles this leads to further down the track.

One thing for sure is that added complexity will bring greater rewards for both Ingram and its resellers. This is clearly something Ingram is looking to achieve - it's no secret that IT hardware is a tough way to turn a buck these days and anything else that can be thrown into the mix can only help the bottom line for all involved.

The other way Ingram can look to add to its value proposition is to develop internal divisions that deal with specific technologies. It is something we saw Ingram and Tech Pac doing before the merger and it looks like we can expect to see more of the same from the combined entity. Spierkel has highlighted components, enterprise, networking, storage and licensing as top opportunities.

We are brought back to convergence with the news that Optus has bid just shy of $26 million for Alphawest in an attempt to build up its integration capabilities. The potential deal looks to be great news for the WA-based service provider, which will is likely to benefit hugely from the financial clout it will inherit as part of the Optus stable.

But, even if the Alphawest brand is retained in the long term, it remains to be seen whether the telco will leave the current management team at the helm. There are clear parallels here with Telstra's buyout of The Kaz Group. While that brand has been retained, it didn't take long for a Telstra executive to get his feet under the chief executive's desk.


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