Melbourne-headquartered Readify has activated $7 million of capital and taken a minority stake in Folk, a Sydney-based user experience and branding agency.
Graeme Strange, managing director of Readify, said: "The world has changed, consumers expect all technology to be easy to use and our clients expect smaller, faster delivery of software that delivers immediate and continuous benefits. The days of fixed price mega projects are gone."
Strange said that to get that immediate return on investment, software made by Readify must look and feel appealing for potential customers. While the company already has "brilliant" technical talent for software development, Folk will bring brand identity and UX design skills in-house.
"That’s what makes this deal compelling. The acquisition will extend our capability so we can deliver outstanding software in a seamless collaborative environment."
Readify recently activated a $7 million kitty for mergers and acquisitions from a potential $10 million raised last year, and buying a 20 percent slice of Folk is the first dip into that fund.
"We have an option to increase our stake within the next 12 months and I suspect we'll do so," Strange told CRN.
Over the next year, Folk will expand nationally as the two companies collaborate on marketing and operational plans.
Readify has worked with Folk since 2008, including for some high-profile clients such as the Australian Rugby Union, Cancer Institute of NSW and Barnado's.
Folk managing director Michael Broadhead said that for service organisations, the digital experience equalled the brand, and the partnership is inevitable.
"As the world moves towards mobile and cloud, this design-development integration is a logical step, we’re just making it earlier than most," said Broadhead.
It's not the first blurring of the boundaries between IT channel and digital media.
In September, Nextgen Distribution formed a joint venture with Bang Australia to provide its channel with "tailored marketing support", while in August distributor DNA Connect merged with PushPull Marketing.
Hosting provider Bulletproof now runs a channel with web development agencies signed up as partners.