Editorial: Making you mark

Editorial: Making you mark

ComputerCorps/S Central/Synergy Plus has a battle on its hands

We’ve been talking about consolidation in the integration space as a given thing for some time now.

Commander’s ungraceful exit last year, along with a raft of acquisitions by UXC and ComputerCorp, certainly added weight to the argument. Maturity of IT and the increasing complexity of technology is another driver. And with an economic downturn now hitting hip pockets and corporate spending, those who aren’t able to cope, or don’t want to face it alone, are expected to be even more open to merger and acquisition discussions this year.

News last week that ComputerCorp, S Central and Synergy Plus will unite as a single force targeting Australian midmarket organisations is likely to be one of the biggest acquisitions/mergers we’ll see in 2009 (see page 1).

Ensuring these three companies are integrated successfully is not going to be an easy task. But should they conquer it, the combined group will have significant weight to throw around in the channel arena. It’ll also have strong relationships with a raft of tier-one vendors such as

VMware, Citrix and IBM. What I’m not so sure about, however, is just how much business is out there for them to pick up. When talking over the reasons behind the merger, S Central managing director,

Peter Mavridis, told ARN that Commander’s demise left a wide gap in the market for another player to step in. Combined, he believed Computer- Corp, S Central and Synergy Plus will have the end-to-end capabilities and skills to be able to provide a full offering to mid-market customers and take on any competition.

At the time of Commander’s exit, several vendors estimated $700 million in business had fl own back into the market. Many industry representatives, including channel director at

EMC, David Henderson, said Commander’s demise became a catalyst for the resurgence of “tier-two” integrators, or those working in the midmarket sector, such as Datacom and Ethan Group.

Over the last 18 months, or since Commander’s debts became so pressing, many of these “tier-two” services providers, telcos and systems integrators have taken advantage of the situation to either acquire new skills, staff or customers. Some, such as Frontline

Systems and Data#3, simply wooed dozens of Commander staff to their ranks. Others, like CSG and Hyro, called the receivers and purchased select parts of Commander’s integration and managed services businesses.

Many competitors also took advantage of the situation to win over Commander’s customers and secure business in their own right.

What this means is that most of the customer contracts Commander once managed have already gone into the hands of a bunch of aggressive and innovative players determined to get their piece of the pie.

The combined S Central/Computer- Corp/Synergy Plus entity is not the only organisation looking for success in the mid-market space. And as the popularity of a managed services model grows in this customer segment, so too will the relevance of these tier-two players. I’m sure we’ll see a lot more consolidation in the year to come.

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