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Changing fortunes

Changing fortunes

It's often said in sport that you're only as good as your last game. While reputations in the IT channel are rarely made or broken on one deal, this certainly isn't an industry where you can afford to sit back and take it easy because you made an important sale or had a record quarter. Anybody who isn't on their toes is likely to be knocked off their feet before very long.

Somebody drew my attention to similarities between the performance of Commander and Leading Solutions/ComputerCorp last week, comparing it to the situation we saw with Ansett and Virgin Blue in the local aviation industry five years ago. The demise of one airline was a major factor in the other getting its business off the ground and, although I think the Commander comparison is way too early, it wouldn't be the biggest surprise if the Ansett/Virgin scenario was replayed in the local channel.

Few people would be in a better position to capitalise than Leading Solutions boss, Frank Colli, if Commander fails to turn its fortunes around. He will be running the merged Leading Solutions/ComputerCorp entity and would be only too happy to clean up any business dropped by Commander - Leading and Commander are probably the largest two HP resellers in the country.

At the other end of the reseller market, there was more doom and gloom last week with news that Plus Corp had been forced into voluntary administration. Nigel Fernandes has ridden the highs and lows of the industry for many years and it is a sign of tough times when somebody like that is forced out of business. In this column recently, following the demise of Computer World, I talked of the difficulty facing traditional hardware resellers as they come under attack from the mass merchants on one side and Web-only operations on the other. I read with great interest Fernandes' suggestion that online, which has been touted many times as the saviour of smaller resellers, was a major factor in destroying Plus Corp because it lowered barriers to entry. Anybody using a shop front to sell commoditised hardware is being placed under enormous pressure by the proliferation of Web dealers and we are approaching a tipping point where the neighbourhood computer store becomes all but untenable.

Finally this week, more than one industry contact has suggested that Synnex is in talks to buy the IT operations of rival distributor, Cellnet. You only have to go back a little over 12 months to find Cellnet launching an aggressive acquisition strategy of its own but - although it did pick up HiTech Distribution and VME Systems - it was unable to land major target Dicker Data. Now, it seems, Cellnet is itself a target and this is yet another reminder of how quickly things can change in this industry.

Buying Cellnet would be good business for Synnex because it would benefit greatly from picking up a couple of tier-one hardware brands to reignite its business. Strength in Queensland would also be attractive for a company that is strongest in Victoria because it would improve its standing across the eastern seaboard. Whether it can close the deal remains to be seen.


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