Editorial: From hunter to hunted?

Editorial: From hunter to hunted?

While Commander continues its attempts to complete a hostile takeover of Volante, industry whispers suggest Optus has latched onto the scent of the communications integrator and could be poised to gobble it up. Neither company was prepared to comment on the speculation but, as we have seen so often in the world of business, the hunter can very quickly become the hunted.

It has been a trend in the local services market for larger players to get the chequebook out and buy smaller, more nimble operators. Kaz Group was snaffled up by Telstra for $333 million back in April 2004; while IBM Australia paid $88.5 million for the local operations of Logicalis during the same month before renaming it as Cerulean.

Singapore-owned Optus is no stranger to the concept of buying Australian, having paid about $26 million for WA-based integrator, Alphawest, last year.

All of the acquired companies have seen selling out as a way of increasing their financial firepower that would enable them to compete for bigger contracts. But leading analysts have often been critical of the trend, suggesting there have been some strange business fits and questioning the value of the deals. There have also been concerns that the acquired operations have lost the identity that made them successful in the first place.

At the time of writing, an Optus move to buy Commander is nothing more speculation, but it isn't the first time this one has reared its head and persistent rumblings usually have some grounding.

Wider industry consolidation, however, is a reality in all sectors - NSW-based distributor, itX, started the ball rolling this year with its purchase of security specialist, Dovetail. And at the time of writing, a major player in the local integration market was in the final stages of being sold. As long as there are no last-minute hitches, ARN will have delivered that story online by the time you are reading this.

In vendor land, the most significant news in the past week has been Lenovo's announcement of new desktops and notebooks aimed at small business and consumer customers (see page 4 of ARN, March 1 edition).

While the company has been at pains to protect the premium reputation of the ThinkPad and ThinkCentre brands it inherited when purchasing IBM's PC business last year, it will aim its own moniker at a completely different section of the market with price tags to suit - the entry-level models of Lenovo's 3000 series will follow HP and Acer into the sub-$1000 category.

An assault on the consumer and small business markets is, quite simply, one that Lenovo had to make. I am slightly surprised that it has decided to have a crack at the very bottom of the barrel but then again, while it has been well received in its Chinese homeland, the Lenovo name carries no weight in Australia, the US or Europe. It is hoping that sponsorship of the Beijing Olympics will go a long way to establishing the brand but 2008 is still a fair distance away. Aggressive pricing is clearly viewed as another way of attracting attention.

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