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Trends and truths

Trends and truths

The growth in local IT services spending forecast by Gartner is good news but, although that rate is apparently faster than the global average, I would still have expected it to be higher. It would be interesting to see these numbers compared with estimated changes in other categories to see if the rise in services is enough to account for shrinking hardware spending.

Gartner predicts services will grow at a compound annual rate of 3.7 per cent in the five years to 2011, which is particularly good news for the channel as this will be driven to a large extent by greater take-up in the mid-market. While the historic problem of competing with tier-one vendors for services revenue in the enterprise is never going to go away, those same vendors are much happier to let partners have their head once we get below 1000 seats.

One trend we will see increasingly, particularly from IBM and HP, is an attempt to package their services that can be pushed through partners. It is likely integrators will pick and choose from those services offerings to fill gaps in their own portfolio rather than adopting them lock, stock and barrel.

In other news, it looks like make or break time for Cellnet as the company's founder, Stephen Harrison, embarks on a series of reviews with its IT vendors.

Industry whispers suggest the Queensland-based distributor is holding onto its HP contract by the fingertips and, with the vendor reaching the end of its first quarter in a couple of weeks, it would be no great surprise to see them part.

If HP walks, I think we can officially call time on Cellnet attempts to present itself as a serious competitor in broad based IT distribution.

Finally for this week, the recent merger between Leading Solutions and ComputerCorp has a lot of people scratching their heads and wondering what's next for the new entity. For my two cents, I think we will eventually see it trading as Leading Solutions once the dust has settled. ComputerCorp has struggled to break out of its own backyard in WA and has been spluttering since company founder, Hugh Smith, sold up in April last year.

Leading Solutions has easily been the more successful of the two organisations and its founder, Frank Colli, has been installed as managing director. He is fiercely proud of his brand and it is difficult to see him letting go.

Staffing looks certain to be an issue given the number of double-ups in areas like middle management and administration. Colli said Leading Solutions had retained almost all staff following its acquisition of BCA IT at the end of last year but, having doubled in size again less than a year later, that seems unlikely to happen this time.

Whether or not the company remains listed on the ASX also remains to be seen. Listed integrators and service providers, such as Data#3 and Oakton, have been performing very well although growth in the tech sector as a whole has slowed recently.


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