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Editorial: A time to shine

Editorial: A time to shine

Australian tier-two integrators are stepping back into the limelight

Open up any newspaper, online media site or industry report and you’ll hear about the effects of the economic downturn. Last week, the Australian Financial Review published a report on the looming recession, pointing out Australia’s gross domestic product grew by just 0.1 per cent in the third quarter of the year. The report also found the market had begun losing momentum before the global stock markets went into freefall.

Globally, we’re hearing increasing reports of staff cuts, largely in the vendor space. In the last week alone, there’s been global layoffs at Ericsson, Websense, Adobe, Belkin, and in the past month, HP and IBM also reduced headcount. At the time of press, AT&T announced it would chop 12,000 people in 2009. The local channel isn’t immune either, although the cuts haven’t been as severe at organisations like UXC, Alphawest and Data#3.

While I certainly don’t want to downplay the impact of the economic climate on customer spending or market sentiment, what we have always strived to do at ARN is help make the channel successful. So rather than just concentrate on the doom and gloom in this week’s edition, we’ve instead taken a look at the success of tier-two integrators this year and where they have found opportunities in the market.

According to several industry representatives, there has been a resurgence of tier-two integrators, or those bringing in $50-$150 million in revenue annually. To an extent, this opportunity for growth was propelled by Commander’s demise, which opened up some $700 million worth of business to the market. But there has also been a consistent move by integrators to deepen their technology skill sets and provide tailored services to customers. This has resulted in many winning new, significant deals and being better recognised by their vendor partners.

The reasons for this are two-fold: On the one hand, new technologies such as virtualisation, unified communications and Web-based applications are triggering a need for different skills; but there has also been a massive shift towards providing on-demand and annuity-based services.

A long-term trend at the customer end towards select sourcing, coupled with a better understanding of the importance of IT in terms of business enablement and productivity, is also making them more willing to work with smaller and more nimble providers.

The thriving market conditions we saw last year acted as an impetus for many of these mid-tier players to expand their businesses through acquisition, as well as invest into new staff and certifications. And despite the current economic climate, I’m still hearing from integrators in this space who are recruiting staff and completing higher levels of certification.

Although the crystal ball is foggy, and it’s hard to predict just how far this downturn will stretch, those who can continue to innovate and keep the long-term growth plan in sight have the best chance of making it through. By the sounds of it, many tier-twos are finding the right formula.


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