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Vendor swoops on its reseller

Vendor swoops on its reseller

- ERP reseller J.D. Edwards Australia and New Zealand realised its dream last week when it was acquired by business partner J.D. Edwards.

Set up to deal exclusively with J.D. Edwards solutions in 1987 (with the vendor owning 10 per cent of the reseller), the local partner was the ERP vendor's sole representative in the region, growing from its original $7 million turnover to over $60 million last year.

"It now makes sense to have a localpresence locally and it was hard for us to constantly generate the capital we needed to operate a $60 million business," said Richard Mathews, managing director of the new Australia/New Zealand division.

The acquisition was always intended to take place, according to Mathews - with the reseller shaping its business model around the vendor's - but now is an especially relevant time in the company's development, he said. "Our competitors were saying to the high-end corporates we were dealing with 'you're a billion dollar company, why are you dealing with a reseller?' We'll now have the backing to invest more capital, giving us the ability to sell into larger corporates."

Mathews said that in its new larger, international form, J.D. Edwards ANZ will establish an advanced lab in Sydney and will gain access to the parent company's intranet.

The buyout will also give the company more marketing clout, with Mathews claiming the local division plans to hire more staff and develop marketing campaigns.

"A sales campaign in this industry can cost anywhere between $50,000 and half a million dollars. We can now invest in this type of activity."

Mathews assured staff and customers that the transformation would be smooth, with no management changes or staff retrenchments planned.

"We will actually grow the business," Mathews said. "We didn't expect to get so big. We have been growing at 80 per cent a year. Last year we didn't grow quite that much but expect growth to get back to about 35 to 40 per cent pretty soon."

Despite this optimism Mathews is realistic about J.D. Edwards' third position in the ERP market worldwide, accepting the fact that SAP and Oracle "are pretty tough competition. It will take a while to catch them." The good news extends to the reseller community as well, with Mathews more receptive to the idea of channel partners now that he resides in vendor land.

"We have not been that keen on having reseller partners, for obvious reasons. We wanted to maintain our exclusive position. But once everything has settled down, in four or five months, we'd like to sign on some reseller partners, focusing on vertical industries or geographical locations such as Tasmania."


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