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Will the second tier survive consolidation?

Will the second tier survive consolidation?

The ongoing wave of acquisitions in the integration space has left some industry representatives questioning the future of traditional tier-two and state-based players.

S Central managing director, Peter Mavridis, said integrators need to acquire in order to deliver on large contracts and expand their breadth of offerings.

"In the space we are in, there's no room for smaller state-based players in the long-term," he said. "To secure a future, you have to be a national organisation. You need size, scale and multiple locations.

"You can't just focus on one technology. Even midsized customers expect you to deliver holistic strategies to support them and provide ongoing maintenance. Resellers usually require more than one specialty and skill."

S Central is one of many integrators buying up. Over the past 12 months, the company has purchased Melbourne-based ExpressApps, NSW-based AGM IT, and library services provider, DA Library Technologies. It currently has a presence in Sydney, Melbourne, Adelaide and Canberra. Mavridis said Brisbane and Auckland would be next, followed by Perth further down the track.

"We're expanding by geography and services. We don't want to be all things to all people, but we need to have a wider range of services to offer," he said. Perth-based integrator, ComputerCorp, has also flagged acquisition plans to help it build a national footprint. It has splashed out in recent years for Melbourne reseller, Fed IT, Tasmanian-based Xite and CES Computers in Canberra. Regional sales manager, Tony Heywood, said any organisation striving to become a national, tier-one player needed to build geography in alignment with its technology strategy.


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