An unceremonious end for Ipex
- 26 November, 2008 14:16
It may have lost its place as a viable local PC maker some time ago, but news the Ipex business is being wound up is still worth taking time to ponder over.
Ipex was established by the Schwalb family more than 20 years ago to supply PC products and became a major player in the corporate and government markets. At its high point, the company sat on a range of high-profile panels including the Federal Government Group 8 arrangement, and earned a reputation from customers and peers for producing reliable products. When Volante acquired Ipex in early 2004, industry pundits and ARN journalists proclaimed the combined entity, with its 850 staff and $450 million in annual revenue, Australia’s second largest IT company.
It’s easy to chart Ipex’s downfall since Commander’s purchase of Volante in 2006. According to IDC figures, Ipex has had a minimal impact on the PC market in terms of volumes for several quarters. At its peak (in 2004), the company represented 1.8 per cent total PC marketshare. But given Volante, and then Commander’s push, into services-based business, Ipex’s manufacturing capabilities have languished and steadily fallen off the radar.
From what we’ve heard, Commander made a couple of attempts to offload Ipex to other PC vendors and competitors, but all fell through at the eleventh hour. By the time Commander’s receivers, McGrathNicol, took over in August, there wasn’t really anything left to sell.
Ipex is just the latest in a long line of traditional PC integrators that once graced Australia’s IT landscape, but was unable to find a place in the maturing market. In recent months, we’ve also witnessed Optima’s demise, brought about by its failure to diversify away from government contracts into complementary areas of business.
The two companies were run by very different management teams, but both suffered from a state and Federal Government move towards more centralised PC procurement. The recent Gershon Review’s recommendation for Federal Government to centralise more procurement is only going to make it more difficult for local manufacturers to win significant business.
Analyst figures show whitebox has been steadily declining in recent years, and dropped 4 per cent year-on-year, according to IDC’s second quarter results. Increasing popularity of notebooks has been a major catalyst for the shift.
On the one hand, it’s sad to see so many significant local PC companies unable to compete in the market of today and tomorrow. But given even multinational manufacturers are being forced to change tack to find growth (just look at Dell’s backflip on working with retailers and channel if you want an example of desperate times, desperate measures) it’s clear everybody must find areas to diversify into if they’re going to survive.
For local assembler, ASI Solutions, this has meant focusing on servers and niche PC products, partnering with tier-ones, and leading with annuity-based services. There’s no doubt increasing demand for managed services is going to be a game changer, so I look forward to hearing about other successful transformations in future.