Climate forces channel changes

Vendor Auspex files for bankruptcy; reseller Azzuri acquires Convergent Systems

Consolidation reared its head in the channel again last week as one reseller was acquired and one vendor filed for bankruptcy.

Storage vendor Auspex filed for voluntary Chapter 11 bankruptcy protection in the US Court of Bankruptcy for the northern District of California.

Garry Elliott, former country UK manager at Auspex, said the firm had closed its UK offices just two weeks ago.

"There have been lots of reasons for the bankruptcy, the economic climate for one. But basically we just didn't sell enough products," Elliott said.

He added that he was unsure about what was happening with the firm's US headquarters, but he understood that some staff were still working there to maintain support contracts.

Paul Talbut, managing director of reseller hps, said he was shocked by the news. "Auspex has become a casualty of the economy. More consolidation is going to happen," he said.

Jon Collins, associate at analyst firm Quocirca, said: "Some consolidation is inevitable and should be seen as a reflection on the way some storage businesses are being run, rather than on the state of the IT market."

However, the storage market is not the only sector experiencing a shake-up. Last week, Azzurri Group, a large convergence reseller, acquired voice and data value-add reseller Convergent Systems (CSL).

It joins FH Brown, Smart Connection, ATC Networks, Netwise and Kilbryde Communications at the £75m group. Smart, CSL and FH Brown are all Avaya resellers.

Clive Sawkins, vice president of Avaya in the UK and Eire, said: "The time is right for consolidation. The market is close to its bottom. I don't think this is the first or the last acquisition in this area."

John Conoley, managing director of CSL, gave four reasons for the takeover, including the firm's proprietary CallMedia application, its position in the call centre market, geographical position and its relationship with Avaya.

He predicted there would be no job losses at CSL as a result of the acquisition.