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Editorial: It's all happening

Editorial: It's all happening

In the channel, sales may lull from time to time but things are rarely ever dull. As Bill Lawry, Australia's best-known pigeon fancier and former Test cricket captain, would say, "it's all happening here in the channel".

Two big stories emerged last week, each taking a dramatic twist as they unfolded to become totally different articles by the time they made it to print. Meanwhile, two other stories augur well for a healthy finish to what, for most, has been a pretty tough financial year.

Firstly, it was discovered last week that Senteq had been sold to an ASX-listed telco. Much channel gossip had proliferated about the sustained decline in fortunes at Senteq and this development appeared to arrest it.

Here was a cashed-up services and voice communications bedfellow, which would allow the once high-flying Cisco, IBM and Compaq box-shifter to be relevant in the 21st century of merged voice/data networks.

On face value, it was all good news for the various parties involved. However, it then turned out that as soon as the sale of Senteq had been completed, its holding company, which was responsible for all current and past debtors and creditors, was placed in voluntary administration.

As a result, debtors would have terms and conditions strictly enforced and creditors would be staring down the barrel of a 40 cents in the dollar return on their outstanding accounts. Both will now also have to deal with the cold, hard reality of bean-counting administrators.

Then there was the E-Store affair. This tale started out as a remarkable phoenix story about a gutsy pure-play e-tailer fighting back from circumstantial tragedies last year.

ARN had been originally told a consortium of mainly Australian investors with US-based funds had injected capital through acquisition into a great little business.

These new investors, ARN was told, had deep pockets with lots of old money and a clicks-and-bricks vision. They were ready to gamble on the market having come full circle. Where once investment opportunities in the IT industry were ridiculously over-priced by market hype, this group now wanted to pick up some bargains while the market was at rock-bottom.

Good theory. However, all of a sudden the existing shareholders of E-Store asserted that no "investment" from this so-called consortium had been made at all. There was no new money forthcoming and no need for any to be sought. Again there was another side of the story, which made it all the more interesting. We loved the pure newsworthiness of it all.

Senteq may be writing itself a new chapter and E-Store may be embroiled in a boardroom dispute but there are also two positive notes this week.

The falling price of gaming consoles and the opening up of new channels by their vendors is good news to retailers. One of the last great booms in the channel was when PlayStation prices dropped dramatically. It spurred a rush in console and game sales at computer stores as electronic gaming became a national obsession. This drove traffic to stores and provided a multitude of up-selling opportunities.

Secondly, Government departments are expected to open the coffers they have been sitting on for the last 10 months for fear of losing their IT budget allocations for the next fiscal year. Subsequently, demand should receive a boost as channel players catering to agencies at all levels of Government receive orders from a sector that has always been crucial to the industry.

It appears the Bill Lawry principle most certainly can be applied to our world. Look inside this issue of ARN. Without a doubt, the channel is where it's all happening.

Gerard Norsa is editor of Australian Reseller News.

Reach him at gerard_norsa@idg.com.au.


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