Who remembers South East Computers, the 1980s Brighton-based top 10 dealership with a £20 million turnover, which supplied the major league dealers with grey IBM kit? When it went bust, most of the business migrated overnight.
'It is surprising how little is left when a £20 million computer dealership goes,' Michael Kianfar, now a GE Capital bigwig but then the MD of Systems International, told me.
When resellers go belly-up, little remains except bitter memories, bad debts and higher insurance premiums for the survivors. Failing computer hardware vendors hardly register any higher on the Richter Scale. Who will care in 12 months' time that AST manufactured PC servers?
Distributors that nearly go bust - such as Azlan - are a slightly different matter.
If a £200 million-plus turnover company can be saved, it is worth saving.
Azlan has come through the other side relatively healthy - or so its spin doctors claimed in last week's Sunday Times. But it is not as robust as it once was. Entrepreneurial energies have dissipated while the management team grind their way through interminable reorganisation.
But who cares when there are always new contenders? The latest kid on the block in the networking market is DataTec, the South African-owned hybrid distributor/reseller.
Last week it made a couple of infill acquisitions in the shape of Web Factory, a £6 million turnover Staffordshire-based intranet integrator; and Training Solutions, the London-based Microsoft Atec.
The purchases follow two major acquisitions in recent months: Logical Networks, the £42 million turnover networking infrastructure reseller/ distributor, bought for up to £25 million; and Bluepoint, the £27 million turnover Compaq reseller. DataTec also operates a £20 million turnover networking distributor.
Less than three years ago, DataTec UK did not exist. Now the group is a £100 million entity. I say entity, but Big Bang integration under the Logical banner (for user sales) and Unity (for distribution) will take place only after the bought-in companies have worked through their earnouts.
Data Tec's UK acquisitions are earnings enhancing. Capitalisation on the Johannesburg stock exchange is $450 million - twice turnover - an enormous premium compared to the UK or Nasdaq. Resellers in the UK begin to look very cheap indeed compared to highly rated DataTec paper.
More important is what DataTec and the management team under Jens Montanana can bring to the party. Channel companies need more than competence - real or assumed, and the right franchises to survive.
For a company to really fly, energy and self-confidence are key. DataTec has those qualities in abundance. But Azlan? We'll wait and see.
Drew Cullen is a freelance IT journalist.
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