YEAR IN REVIEW: A look back in retrospect
- 13 December, 2000 14:32
The enterprise reseller channel has faced a turbulent year in 2000 with significant drivers causing some companies to reassess direction and others to forge ahead into new markets.
Despite being warned last year about the fate of the box mover, those companies that hadn't made the transition began to fall by the wayside in 2000. The first to go were distributors who began losing vendors' faith; Sealcorp lost Novell and Micrografx, while Dataflow went belly up.
Resellers, who were a little more agile and less dependent on shifting product, were able to adapt. Many announced major structural changes around services, outsourcing and consulting like Data#3 in May. Companies like Powerlan went on the acquisition trail, picking up security (XSI) and consulting (APA Management Services) companies to hedge its bets in a changing market.
Powerlan also tried its hand at training only to get burnt - Com Tech didn't, and neither did Full Spectrum. Both capitalised with good revenue streams from training.
And some reinvented themselves around untried business models, such as Janteknology. The company raised a number of eyebrows when it evolved from an integration unit into a distribution outfit - online distribution that is.
While the channel battled to maximise services to eke out an existence on paper-thin product margins, the real enterprise movement happened at opposite ends of the spectrum. Large-scale enterprises had anxiety attacks pre-Y2K, only to find it was no big deal - the channel wracked up huge consulting dollars and everyone was happy. Then the SME market had its turn to worry when the GST came into effect on July 1, buying up all the copies of MYOB and Quicken they could find. This gave everyone just enough time to put their feet up during the Olympics.
But not with complete ease - the occasional catastrophic e-mail virus scare kept even the most ardent of network managers a little edgy. Not so for the handful of specialist security resellers who could now charge top-dollar for the privilege of protecting a company's network - the managed security provider was born.
The year also saw outsourcing come to the fore, backed by banks (EDS scored the CBA, IBM GSA bagged Westpac) and the Government. Although bank fees exceeded even taxes in meteoric rises, the banks remain tightlipped over how cost effective their outsourcing initiatives are. Meanwhile, the government released a report slamming its own initiative to outsource the lot.
On the vendor front, a new company seemed to set up an Asia-Pacific hub in Sydney every week whilst the channel grew accustomed to the "hybrid" part-channel, part-direct model - not as crazy as it sounds in a year when storage became sexy again. Legacy NAS fought it out with the in-vogue SAN and managed service provision became a handy go-between - a viable option for the channel.
Although ERP dominated the latter part of 1999 and early 2000, its little brother CRM was the talk of the town as enterprises realised the value of leveraging their infrastructure and the Web to own the customer. Although the vendors would like to take the credit for this trend, and there's plenty to choose from, another view would be that the channel became more business focussed and less technology focussed in its approach.
This saw the traditionally business/accounting focussed big five (Cap Gemini Ernst & Young, Delloitte, PricewaterhouseCoopers, Andersen Consulting (and its variations) and KPMG emerge as massive integration and outsourcing/service providers. Between them and the companies coming from a technology background (IBM GSA, CSC and EDS) all the talent was soaked up and the industry's skill shortage continued in earnest.
But that's only a snippet of the year that was 2000.
Enterprise highlights 2000
ESR hails cab contract
Enterprise Speech Recognition (ESR) set the metre running after scoring a lucrative four-year contract with Sydney's largest taxi company, Combined Communications Network (CCN).
Commerce One/SAP snare coveted corProcure deal The best-kept secret surrounding Australia's largest e-commerce portal was aired last week, with a blanket announcement that five firms will provide the technology solutions for corProcure.
IDC: Outsourcing explosion only temporaryIT research firm International Data Corp (IDC) has sized the local 1999 services market, showing IS outsourcing leading the charge, estimated to be worth around $2 billion, but it's not likely to happen again, according to Merv Langby, IDC's chief analyst, services.
ISI acquires local developer Sentor
Local Lotus Notes developer Sentor Communications has been acquired by Independent Systems Integrators (ISI) for an undisclosed amount.
Direct sales without a channel Blue
When it comes to e-business and the way in which it is going to change the world, clearly IBM intends to make an effort to practice what it preaches.
Storage to follow networking channel
As a channel opportunity, the integration of storage solutions into enterprise IT infrastructures is set to take the same rapid expansion path network integration enjoyed during the late 80s, a pioneering storage-focussed reseller claimed last week.
CHA calls it quits with CHS, NAI
After months of deliberation, Computer Hardware of Australia (CHA) finally pulled the plug on its sale agreement with US-based CHS Electronics late December, capping off a turbulent year for the distributor.
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