As the computer industry tries to overcome the shock of returning to work after the Christmas break and the December lull - which seemed to kick in during the middle of the month - the great consolidation in the channel has already started in earnest, in only the first week of January.
The first acquisition of P&P's dealer arm by GE Capital will have ramifications for the balance of power in the channel. While it will give GE Capital turnover clout , it will be interesting to see if GE can command the dominance in the UK that it already commands in the US. It is also worth pointing out that the two companies were surely haggling over details, possibly hinging on the price, since PC Dealer reported that GE and P&P were talking way back in June. While deals can take time, seven months is excessive.
So while we were all in the grips of working out what the GE deal would mean, there came the news that Specialist Computer Holdings (SCH) was going to buy Wycombe-based Preview Data Systems.
It seems as if 1997 was a year marked by acquisitions and mergers among vendors as well as resellers, but it still comes as a surprise to see 1998 start with such a bang.
Our industry is maturing faster than ever, and if what I suspect to be the case is true - that the Preview purchase is a key indicator of this process - then the industry is in for many more acquisitions later this year.
Even in the past 12 months, the market has moved to benefit the high-value, high-volume players. Corporate buyers in particular are forcing this pace of change in buying habits by favouring the aggressive larger European and US-based resellers - companies which can also deliver desired services and outsourcing deals. This is increasingly the case as up to 15 per cent of outsourcing deals actually result in increased costs, as the recent Business Intelligence Outsourcing report pointed out.
P&P had revenue of #135 million in 1997 and looks as though it will become a training specialist. Whether it can prop up its other ventures, QA Training and Acuma, now that it has disposed of its dealer arm, is another matter.
Both of the acquired companies have had strong European growth as an essential element in their business strategies, something we pointed out in June last year as a major part of the large reseller's game plans.
No business hoping to succeed in the long term can ignore this in their 1998 business plans.
And, unfortunately, the first wave of consolidation in the channel is not yet over. In fact, this will be the year in which consolidation will be the overriding trend affecting companies. So, we look forward to more buyouts and mergers but, sadly, this will only help the big get bigger and more powerful. Still, we can only hope for a better year than the last one.
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