MERGERS AND ACQUISITIONS
All of these market challenges have seen a year of unprecedented consolidation, as multi-national distributors and resellers look for local partners with expertise, vendors look for ways to fill the holes in their offerings and, in a dog eat dog world, others simply go out of business.
Microsoft’s David Gage believes it comes back to something more than just that basic metric - market share.
“I think it’s about capability. I think there are partners out there that recognise that potentially they haven’t moved as fast as they would have liked to if they had their time over. They’re looking to acquire the capability because they recognise for them to build it themselves it’s going to take too long,” he said.
Harbour IT’s Sean Bishop said his company is approached to buy, or be bought around once a month at the moment.
“There’s just so much activity happening out in the marketplace. And it is almost by necessity. So I think if you stay small you’re just going to be gobbled up. You’ll just disappear. You’ll become irrelevant. There’s so many big players moving in now and so many of the large SIs are just taking over. It’s hard to compete,” he said.
Interestingly, it can also be some of the smaller, more dynamic players that are disrupting the market, according to Gage.
“What we’re seeing is that there are some small ‘born in the Cloud’ partners that are selling significant size deals to major enterprise customers. They’re not necessarily that classic trusted advisor,” he said.
“Some of the smallest, most disruptive players, that are most forward thinking, are the most attractive targets getting pretty decent priced offers,” he said.
Enspire has also seen multiple approaches from larger parties.
“We want size. So if we can find someone that doesn’t have a Cloud offering, we’re looking to sell,” Geoffrey Nicholas said.
“Two of the people we’ve spoken to I’ve sort of turned away. They didn’t focus on people; they didn’t focus on our customers. I didn’t go into business to just make money, I mean I’ve got to have fun. I want to look after my team and I want to look after my customers that I’ve known for 10-plus years. I won’t sell them out to someone who’s just going to take advantage of them.
“We want to do something, and I have seen a lot of the MSPs that haven’t moved to Cloud - they’re dead in the water. If you haven’t made that transition I think you’re dead.”