The unravelling of ASX-listed integrator, Commander (ASX:CDR), has left many rivals scrambling to assuage customer concerns and minimise its impact on the broader IT channel.
Receivers, McGrathNicol, were appointed to Commander by its bankers on August 7 after the board brought in voluntary administrators, Ferrier Hodgson. The receivers are now looking to sell the business and plan to continue trading.
Several competing resellers and integrators have expressed interest in acquiring parts of the business, and many have already picked up ex-Commander staff and customers. But despite the opportunities presented from losing a significant rival, most agree Commander’s failure to stay afloat will damage customer and market confidence in the sector.
“Commander’s problems have brought into question the stability of the industry,” 3D Networks CEO, Chris Luxford, claimed. “Customers are asking that if someone as huge as Commander can suffer so badly, how can the littler guys survive?”
For listed IT providers such as Queensland-based Data#3, and national IT reseller, Corporate Express, the failure of a significant rival to manage bank debts or operations effectively reflects badly in the eyes of the investment community.
“Any concern for the investment community that the sector has problems affects everyone because we are all sleeping in the same nest,” Corporate Express managing director, Grant Harrod, said.
Data#3 managing director and chairman of the Australian Information Industry Association, John Grant, said IT was a small industry from a listed perspective.
“This doesn’t create a positive perception of the industry in that sector. Without the investment dollars we won’t get the funds to grow, and so on,” he said. “This will have a much broader impact than the immediate implications for staff and customers. Those are extremely considerable, but the wider downturn implications are significant.”
Corporate Express general manager of IT solutions, Marcus Heron, said it put the spotlight on longterm contracts not just for Commander customers but also for everybody else.
“It has already driven closer engagement between the customers and the OEMs – you wouldn’t necessarily see the OEMs pushing aside the resellers, but this certainly strengthens the customer’s desire to have closer ties with the vendor,” he said. For Dimension Data spokesperson, Martin Aungle, managed services customers were of particular concern.