Getting to the bottom of a channel breakdown

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This article appeared in the 14 April, 2008 issue of CRN magazine.

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Getting to the bottom of a channel breakdown
What a difference a few months makes. In December, the channel heard that two of Australia’s more established resellers were to merge.

Victoria-based Leading Solutions and Perth-based ComputerCORP were all set to create a 430-strong reseller outfit, with first-year revenues expected to crack the $300 million mark.

At the time this seemed to me, and most people I spoke to, as a genuinely smart move from both firms. Leading Solutions and ComputerCORP are both providers of IT infrastructure services and business solutions. The firms boast vendor relationships with HP, Toshiba, Acer, Microsoft, IBM, Lenovo, Cisco, Symantec, VMware, Sun and Trend Micro.

Mergers are rarely straight mergers. They are normally acquisitions disguised as mergers. In December we learned that the merged entity will be called Leading Solutions and will be led by Frank Colli, who has overseen Leading Solutions’ previous acquisition.

This, not unjustly, led me to believe that Leading Solutions was the driving force behind the “merger”.

CRN spoke to Colli at the time, who said: “Our competitors will be the same as before, but our new size ensures they will seeing more of us. The companies out there include the likes of Commander and Data #3. It will be interesting to see how our competitors step up to the mark as the need for national partners grows.

“The ComputerCORP name will be phased out and we will look at how customers would like to see it phased out. ComputerCORP is a respected name, but we need to be one organisation.”

I was intrigued to see how this would affect players such as Dimension Data, Commander and Data #3. However last month ComputerCORP posted a statement on ASX Limited announcing the termination of its proposed merger with
Leading Solutions.

“It was no longer an attractive deal,” said Tony Heywood, eastern region director for ComputerCORP. “We believe we can operate as a standalone entity and we will continue to look for acquisitions and organic growth opportunities.”

This development felt like it was ComputerCORP doing the acquiring, but what really happened? Bring on
the rumour mill.

On Hot Copper, the ASX forum, rumours that Leading Solutions may be experiencing cash-flow problems have infiltrated ComputerCORP discussion threads.

At CRN we don’t deal in the currency of pure rumours, as most of the channel can do that on its own. However, getting the inside story of what really happened would make interesting reading. Did Leading Solutions move the goal posts? Was it a personal clash between the organisations? I really don’t know. What do you think happened? Email editors@crn.com.au.
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