Baillie and his big distie

EDITORIAL: Fresh Ingram Australia managing director Kerry Baillie seems far too relaxed for a man whose decisions will make or break what soon will be Australia’s and Asia-Pacific’s largest IT distribution company.

For our cover story this issue, I had a candid discussion with Baillie about the integration of the local Ingram and Tech Pacific operations and was quite surprised when told that he didn’t really plan to do too many things differently with the combined operation.

I guess it makes sense. After all, people -- or in this case, the staff, shareholders and reseller customers -- are generally adverse to change.

With an easygoing attitude and his obvious affinity with Tech Pacific staff, I believe Baillie will do a great job with the local subsidiary of the US-based giant. He’ll tell you he has already put runs on the board during his three years at the helm of Tech Pacific.

He took some credit in our cover story, as he should, for returning Tech Pacific here to profitability
after admitting that in 2001 the company lost ‘heaps’, finally resorting to a tactic whereby he would profit-share with all Tech Pacific employees when the company started performing again.

And guess what? Last year was the most profitable Tech Pacific had been in its history, recording $1.5 billion in revenue and a $30 million EBIT, admittedly helped by an improving Australian economy and IT market.

On the surface, it appears as though he has done a better job that previous managing director David Cullen, but to his credit, Cullen was steering the company through the dotcom bust and a pretty average period for the IT industry the world over.

Baillie, helped by a market upswing, had Tech Pac back on track again, with a big focus on markets like retail and the emerging market for consumer IT in the home.

Still, the next 12 months will be an extremely testing time for the combined group. As Baillie freely admits, the tall poppy syndrome that we Aussies are so famous for may come through, particularly given that we’re talking about a US company here.

Ingram just cannot make the same mistakes that it did when it first came here in 1999 through the acquisitions of ERA and ITG. The result was staff disarray and generally a pretty average situation.
I remember conducting an interview with the now Ingram CEO Hans Koppen about 18 to 24 months after the giant first landed in Australia.

He admitted at the time that the company had not handled the integration of ERA and ITG as well as it could have. A bit of an understatement to say the least. However, since Steve Rust was brought in as local Ingram managing director, the company has performed better.

I reckon Ingram management have learnt some lessons from the past and will be a major force. There is certain to be more consolidation in the distribution market this year and some smaller players will definitely suffer. In the end, Ingram’s massive buying power may just prove to be too much.

I’d like to know what you think about the Ingram/Tech Pacific merger, particularly if you’re a smaller, niche player.