When the cyclical trend of recession rolls around so do acquisitions and mergers, as companies seek to pool resources, snap up easy targets and fortify themselves against failure.
This trend cut across vendors globally and distribution companies locally during the tough economic times that hit the industry this year.
Among vendors, the high profile list of planned and completed buyouts includes EMC and Data Domain, Avaya and Nortel’s enterprise business, HP with 3Com and Oracle with Sun Microsystems.
The local distribution space has been equally as interesting to monitor this year. It to has been marked by acquisitions such as that of Cellnet’s IT business by Datastor, and subsequently Datastor itself by Westcon Group, along with Value Added Distributors and Vantex by Ingram Micro.
Distribution hasn’t been an environment for faint-hearted New Zealanders this year. With margins hit hard in some product categories, such as PCs and, more broadly, hardware, reinvention has become a familiar narrative.
There are many examples of organisations seeking out, and focusing on, more specialist technologies in the hunt for profitability.
Cellnet has become less broad-based, preferring to specialise in telecommunications accessories, while Renaissance has singled out education and retail as key priorities.
In a similar vein, reseller Portables Plus elected to hand its IT customers to Lexel Systems, having identified 3G-enabled notebooks and its First Mobile outlets as a better bet than traditional notebook PCs.
The identification of point of sale technologies as a growth market was evident with Ingram’s buyout of Vantex and the establishment of new distributor Sektor, which brought HP into POS locally.
Ingram Micro managing director Gary Bigwood recently told Reseller News his company had been forced to assess which of its offerings truly provide value to end user organisations. Anything that doesn’t, simply won’t make a significant contribution to Ingram’s business.
The recession has certainly sharpened the channel’s focus on what it does well, while forcing its members to do away with what doesn’t work as well.
Although there are signs of cautious optimism, it’s difficult to know the pace recovery will take. But as it does begin to kick in, the spotlight cast on technology that genuinely allows firms to be more competitive in a short time frame, is a good thing. Long may this continue in 2010 and beyond.