EDITORIAL: For Sale: Australia's Channel

EDITORIAL: For Sale: Australia's Channel

The winds of change currently blowing through the channel are about to be upgraded from "cooling breeze" to "gale-force warning". Nothing is sacred. Everyone is vulnerable, but the news isn't all bad.

If the sale of Tech Pacific is completed by the end of this financial year, as planned by Dutch parent company Hagemeyer, that in itself is enough to transform the Australian IT distribution channel dramatically in one fell swoop. Estimates of the distie giant's market share range from 40 to 60 per cent, depending on who you listen to and how you equate the numbers.

But Tech Pac changing hands really just denotes the beginning. Changes in software distribution and licensing models are being implemented all over the place, led by some of the biggest players (Microsoft and CA). Channel companies are being acquired left, right and centre by vendors, competitors and cashed-up outsiders, while analysts are declaring that direct selling (of PCs) is on the rise.

These same analysts are also predicting enormous growth in a new wave of Internet-connected devices and appliances that may not have even been conceived yet. How are these going to get to market? In the way a phone is now distributed or through channels developed by the rise of the PC? Meanwhile, the more savvy vendors are taking much tighter control of their channel management. In Australia the channel is the route to SME riches, so partner management is a high priority here. "Channel automation" is something you will be hearing a lot more about; and vendors' inventory levels will be managed a lot closer to home and based on sell-through rather than distie sales.

The recent trend of stacking the channel with as much stock as possible and hoping it all moves before the next boat arrives has proven a disaster for many, and new strategies are sure to emerge. Don't be too surprised to see future "distributors" operating very specifically as sales and marketing operations only.

The channel's future can be predicted with as much accuracy as your average TV weatherman's latest forecast. But one thing is for sure, no reseller of any description should be maintaining a status quo by thinking that everything is sailing along very nicely.

It is not the Apocalypse, but it is a significant transitional moment. Observe the trends, identify the opportunities and adjust accordingly.

However, the biggest single influence to the average reseller in the next three months will be what happens to Tech Pacific. Will it be another distribution company or a new venture to these shores that takes the reins?

I would suggest not the former, for lack of cashed-up players in the industry - except maybe Ingram - and I hope not the latter for Australia's sake.

I'd prefer to believe that one of Australia's larger public companies might swoop on a veritable revenue stream. I wouldn't be too surprised if one of the retail, logistics, financial or telco giants of Australian industry spies Tech Pac as a good cash source offering synergies with existing operations and a healthy slice of the greening IT market.

The IT channel could be treated a lot like breweries were by Australia's corporate raiders of the 1980s. No corporate-wannabe of the Alan Bond era was worth its weight if it didn't have a beer factory for cash turnover.

Would it be good for the Australian channel if some blue chip-company such as Coles-Myer, TNT, NRMA or Telstra dipped into its pockets for Tech Pac? What do you think?

Gerard Norsa is editor of Australian Reseller News.

Reach him at

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