Industry rumour is predicting that the Queensland Government will opt for direct relationships with dealers rather than vendors under its forthcoming whole-of- government panel for PCs, notebooks and servers. According to sources close to the contract, the government has selected three panellists including at least two dealers. They are expected to be finalised by the end of the month.
Those who were originally vying for a place include Data#3, Dell, Acer, Fujitsu, HP, and Coretech (with IBM and Lenovo). A spokesperson from the Department of Public Works was unable to comment at time of press. Data#3 managing director, John Grant, said he would welcome a direct partnership with the Queensland Government should it be offered.
"As a major supplier to government in many agencies, and working at the coalface, we understand the role a reseller plays and the different value to what a vendor delivers," he said.
"It would be a very innovative decision for government to recognise market activity and build key relationships with resellers. They are the organizations
that have the capacity to address agency issues about selecting the right type of equipment for their specific needs and getting it delivered and configured to work in that agency's environment at the right cost. These are the things vendors have struggled with."
But while the potential new arrangement would benefit bigger dealers, it could cut tier-two players out of the picture. Despite this, NetOptions managing director, Clark Hobson, said he would not be overly concerned if Queensland Government were to work directly with three dealers. The integrator has done some work for Queensland agencies in the past.
"I'm not unduly worried about it. It's an inevitable outcome that when a panel is being driven by volume, the number of suppliers will be rationalised," Hobson said. "Whether Queensland Government chooses resellers or vendors, they will be doing it at a very low margin. "It comes back to one decision: do you want to be that volume business, or do you want to be a value-added reseller working on things with better margins and services attached?
"We want to win business that adds value to the bottom line and that we can build something around. If you want to win that business you need to focus on how to build a successful transactional model."
Managing director at Queensland reseller AfterDark, Peter Davies, agreed the whole-of-government hardware contract was about having logistics capabilities and didn't leave much room for resellers to make a buck. "It's not the sort of business we would chase because it's high volume, low margin and more about logistics than buying and selling specific hardware for specific needs," he said.
The Queensland PC, notebook and server panel went to tender in April and covers at least 26 agencies. Annual spend is expected to reach $70 million and encompass more than 42,000 assets. A spokesperson at the time said 3-5 panelists would be chosen.
The panel will run for three years with an optional two-year extension. Potential suppliers have been asked to provide procurement, installation and decommissioning services.
ASI Solutions bid for a place on the Queensland panel with its own hardware but often acts as a reseller to vendors participating in other state panels. Communications manager, Craig Quinn, said a three-horse dealer race in Queensland would see smaller resellers left out of the equation but said it would mean more opportunity for those who were successful.