European view
Europe is in the grip of merger mania. Not a week passes without some huge IT takeover hitting the headlines. Take Microsoft, for instance.
Not content with voraciously buying small software companies, it has recently made a $150 million investment in Apple.
Elsewhere, Compaq is still getting to grips with Tandem, Thomas Conrad and Microcom, while 3Com has swallowed US Robotics and is still slowly chewing on it. Intel saw, came and conquered Chips & Technologies, Sun took over software company Integrity Arts, Apple paid a great deal of money for Next, Microsoft invested in Lernhout & Hauspie, IBM took possession of Tivoli (after the Lotus merger) and so on and so forth.
Money is changing hands in the distribution world too. CHS Electronics and Ingram Micro are always ready to pounce. In a short space of time, CHS added Karma and Santech Microgroup to its burgeoning portfolio. Having already mentioned its desire to enter the US market, the distributor is now considering doing business in India and China. And Ingram Micro acquired the Finnish software distributor TT Microtrading after completing acquisitions in Germany and Chile.
The rumours are relentless, too. Digital's network department is begging to be taken over and Cabletron is said to have expressed an interest.
Compaq is eyeing Unisys and IBM still has big bucks in the kitty. Perhaps Informix, Novell and Sybase will be the next takeover victims.
Why all these takeovers? Are they strategic moves? Are they determined by financial considerations or are they simply growth ambitions?
The question that interests us most is, does it improve the reseller's position? Let's take a look at what's really happening. Microsoft's investment in Apple means Mac users will be able to use Office 98 later this year.
But Mac sales have dropped drastically. In other words, the reseller is not getting that much out of the deal, nor is Microsoft. Does Compaq allow resellers to sell Tandem products?
Of course not.
Anyway, the sales channels are not the same. Compaq swears by indirect sales, while Tandem has always used direct. Tandem's technology will be integrated in Compaq's high-end products. Resellers, your time will come.
What I would really like to know is the real story behind Compaq's network products, the former Microcom and Thomas Conrad offerings. Resellers are probably selling more Compaq network products as a result, but it hasn't helped them an inch. The same can be said about the new network and communications giant, 3Com. Will resellers sell more USR modems because they are part of the 3Com group? I doubt it. It's more likely to be the opposite.
As a client, I prefer not to put all my eggs in one basket, so why should I buy all my network and communications products from one company?
And what about CHS? Do resellers get a better price for its hard disks now it has taken over Karma?
The fact is, there is no commercial advantage for resellers. When a company takes over another, it takes at least a year to integrate the corporate culture, customs and distribution channels.
Merging 3Com and USR into one company is no simple feat, and the resellers have felt it.
IBM was working on the Lotus project for years, but it wasn't until this year that the first signs of an integrated approach became apparent. Compaq did not have the right strategy and focus either. And resellers had to be patient.
There is one argument that is often heard, which appears to make sense.
Companies take over other companies in order to keep abreast of the latest technology - it's their way of safeguarding the future. Seen in this light, the reseller is served.
At least we hope so.
Companies have admitted that it is impossible to keep abreast of the latest technology. How much longer can the situation persist? And anyway, isn't this an indication that the technological landscape is changing too rapidly?
Of course I may be entirely wrong about the takeovers and IT suppliers really have taken the needs of their partners into account. It is possible. And if so, they have managed to keep it a secret for a long time. Let's get to grips with it soon.
In other words, Compaq, Microsoft, 3Com and the others, please explain to the resellers - your partners - where the advantage lies. It can't be that difficult, can it?
Just answer two questions. Will resellers be able to sell more products and services? And will they be able to expand their companies?
They can use the rest of the story to satisfy their shareholders and company strategists.