Cellnet's key vendors have welcomed back founder and reinstalled managing director, Stephen Harrison, but are urging the new chief to get its long-term strategy in order.
Cellnet co-founders, Stephen Harrison and Mel Brookman, returned to day-to-day duties at the ASX-listed distributor last week. Harrison took over from Mark Bloomer, who had been at the helm for four months. Brookman has come back on-board as sales director. The changes also coincide with the appointment of CVC Limited CEO and Cellnet major shareholder, Alexander (Sandy) Beard, as chairman. He replaced Reg Clairs.
Harrison told ARN it would conduct a review of its IT vendor stable, but denied it could sell-off any parts of the business.
"I'm not saying we will reduce the number of IT vendors - but we need to review them, and vice versa," he said. "The space we are looking to play in is SMB. We always said we wanted to be in that area, but we have been trying to play in the top end of town. We need to consolidate and focus on SMB."
Harrison was also keen to strengthen Cellnet's traditional telecoms and accessories business to create balance across the telco and IT sides. Lenovo general manager, Alan Munro, said Harrison's return was positive for the industry and the business. "I've worked with Steve [Harrison] before and it's exciting to have him back at Cellnet. He has a strong entrepreneurial flair and a real focus on getting things done," he said.
"Steve mentioned to me the other day he plans to focus in even more tightly on customer service and SMB, which aligns well with our values and strategy.
"I'm very confident in where Cellnet is going as a business." Asus sales director, Ted Chen, also threw his support behind the new boss, saying the return of a major shareholder to day-to-day operations sent a positive long-term message to the industry. But there are still concerns over what Cellnet's proposed telco strategy will mean for its IT vendors in the long term. Chen declined to comment on what effect this could have on Asus' seven-year relationship with the distributor.
IBM's director of global business partners, Andrew Baker, said it had rescheduled a Cellnet meeting to find out what the recent changes meant for its relationship. "We have regular governance meetings with all our key partners and are in the process of bringing the Cellnet one forward to have all the obvious discussions," he said.
"There has been significant change with Steve going back there but we are hopeful there will be a positive outcome."
Samsung's IT general manager, Norm Krieke, and Toshiba's Information Systems Division general manager, Mark Whittard, agreed the jury was still out. Both hoped to catch up with the new team soon.
"Overall I see this as a positive move - I'd like to see what firm plans they put in place," Krieke said. "Their track record has always been one of business growth and I hold a positive view of where Steve and Mel [Brookman] can take it.
"There has been growth [in Cellnet's Samsung business] but not to the degree it could have been. I don't think Cellnet has been realising its full potential. "I don't know to what degree that telco focus is going to have an affect. Cellnet had a big telco accessories customer base and reach - they may look at the degree this customer base overlaps with their IT range." While approving Harrison's re-appointment, Toshiba's Whittard warned change was not always a good thing.
"Cellnet will need to communicate openly about why the management change has been made," he said. "Our business with Cellnet has not been doing as well as we had hoped in recent times, but it's a good company and we have high hopes."
For Lexmark general manager of channel and emerging business, Carmel Mosser, any business strategy that made Cellnet stronger would be welcome. "If having more focus on that [telco] business makes the business stronger overall, then we're happy with that," she said. "We need to learn more about Cellnet's strategy and where the focus will be, but I'm positive we will have a good relationship with them. They are committed to us, and we have good lines of communication, so we'll be pushing our investment with them moving forward."
Similarly, HP partner solutions organization director, Paul Robson, said its business with Cellnet over the last six months had met joint expectations and the relationship remained unchanged. Harrison resigned as Cellnet's managing director in March 2005 after four years in the role. He said the distributor's poor share performance over the past two years and the struggle to juggle IT and telco had left it in need of a helping hand.
"It's pretty broken at the moment - we need to turn it around," he said. "I see myself as someone who can rebuild the business for a period of time.
"I think it has lost some of the energy and passion it once had. With that go other things in the back-end, such as service levels and customer service. "But the fundamental business is good - we have strong skills, our financials are stable and we have a good customer base and vendor line-up. We have all the ingredients to bake the cake, it just hasn't been rising."