Watch out for Telstra

Watch out for Telstra

This isn't the first column I've written about the relationship that telecommunication carriers like Telstra have with the channel. It won't be the last either.

In this issue you will read that Telstra last week took a 15 per cent slice of Solution 6, with the option to take another 10 per cent in the next 12 months. Last issue, we featured an article on Telstra's 10 per cent acquisition of Sausage Software with an option to take 40 per cent.

When you also consider the stake Telstra took in ComputerShare, not to mention the expansion of its retail stores into computing equipment, then it is glaringly obvious that Telstra is very serious about becoming much more than a telecommunications vendor.

E-commerce analyst Marc Phillips was quoted in Network World Today, an online sister publication of ARN, as saying that these investments would only be the start of a concerted buying spree. "There could be a dozen in the pipeline."

Telstra refuted the claim with the comment that its acquisition strategy had been code-named cricket and that there were "three stumps and we got them all. There are no bails."

However, even with just this current round of acquisitions, Telstra is very well placed to make a significant impact on the IT market and its channel.

In fact, no matter where you sit in the channel, it's more than likely you will bump into Telstra at some point in the future. As previously mentioned, retailers already compete with the Telstra Shops.

At the small and medium business end of the market, Telstra is going to aggressively push into the e-commerce arena. In fact, its investment in Sausage was partly driven by its desire to have shrink-wrapped e-commerce solutions for the market. It's perfectly well placed to attack this market leveraging off its successful and well-branded Big Pond ISP and Web Hosting services as well as its Yellow Pages product.

Of course Telstra isn't the only one salivating over this market. Everyone from your large integrators to your corner dealer wants a piece of this market, but you can be sure Telstra is going to be one of the most fearsome competitors in this space.

Go higher up the e-commerce chain and Telstra has already been successful as an Internet integrator, recently winning deals to take NSW Government agencies online. It has also had success as a network integrator winning Qantas' business, for example.

Then of course there is the application service provider business which Telstra has bought into with its investment in Solution 6. I've written in this column previously how telecommunication companies are perfectly placed to dominate in this market because they own the infrastructure.

So if you're a software integrator or reseller you're not safe from Telstra either.

But Telstra can't do it all itself and many smaller resellers and integrators are looking to forge strategic alliances with the big outsourcing companies - might I suggest that you definitely look to build some type of relationship with Telstra.

It is almost certain to be a major player in the new Internet economy in this country. In fact, when you talk about promising Internet companies and stocks, Telstra has to be the granddaddy of them all.

Philip Sim is editor-in-chief of Australian Reseller News. Reach him at

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