I previously predicted that when Ingram made its US$700 million acquisition of Tech Pacific late last year that the next 12 months would be make or break for the remaining distributors operating in this market.
Some distributors saw the merger as an opportunity to differentiate themselves even more from the volume-based distribution giant. Others have felt the need to do some merging of their own.
Distributor Omega announced it had acquired the business of competing distributor Hallmark this month, signalling what could be the first of more distributor mergers in Australia in the months to come.
Consolidation is a fact of life in the current channel environment and I firmly believe that as a distributor, if you don't have a compelling reason for the reseller channel to buy your products and services, you're going to have a hard time against organisations that have already partnered with others.
Then there's the price issue. The merged Ingram and Tech Pacific organisation - which is officially 'integrated' this month - will have awesome buying power and will aim to have the best prices in the market, squeezing competing players.
For Omega and Hallmark, it quite obviously made sense to merge two companies with some synergies in order to survive in a distribution marketplace facing a squeeze.
At the end of day, distribution is a numbers game and those players that don't have the right mix of vendor partners will suffer.
I may be wrong, but I'm feeling that distributors are doing everything they can at the moment to take on new vendors and fill out their product lines to ensure that they can deliver as many different product lines to the reseller channel in the wake of the merger. Vendors and reseller customers will soon realise which distributors have the most to offer and only the strongest players will survive.
On another topic - our cover feature this week takes a look at the battle that is raging between open source and good old Microsoft. As Con Zymaris, a long-time Linux proponent, says in our feature: 'We get more money from doing our $2000 Linux server install than another company would doing the $10,000 Microsoft installation'.
Are you finding the same thing? Vendors that are backing the Linux movement, the likes of HP, IBM and Novell, are heavily promoting open source channels to market.
But with this mind, are Linux installations turning into pure profit for your business or is it all smoke and mirrors? Are Linux and open source solutions ready for mass deployments on the desktop and at the server level?
I'd like to know your thoughts on this subject - particularly if you have dipped your toes in the open source waters and are having some success. Even if you have tried and failed. We would like to know what the barriers were with selling and installing open source solutions.
Some distributors saw the merger as an opportunity to differentiate themselves even more from the volume-based distribution giant. Others have felt the need to do some merging of their own.
Distributor Omega announced it had acquired the business of competing distributor Hallmark this month, signalling what could be the first of more distributor mergers in Australia in the months to come.
Consolidation is a fact of life in the current channel environment and I firmly believe that as a distributor, if you don't have a compelling reason for the reseller channel to buy your products and services, you're going to have a hard time against organisations that have already partnered with others.
Then there's the price issue. The merged Ingram and Tech Pacific organisation - which is officially 'integrated' this month - will have awesome buying power and will aim to have the best prices in the market, squeezing competing players.
For Omega and Hallmark, it quite obviously made sense to merge two companies with some synergies in order to survive in a distribution marketplace facing a squeeze.
At the end of day, distribution is a numbers game and those players that don't have the right mix of vendor partners will suffer.
I may be wrong, but I'm feeling that distributors are doing everything they can at the moment to take on new vendors and fill out their product lines to ensure that they can deliver as many different product lines to the reseller channel in the wake of the merger. Vendors and reseller customers will soon realise which distributors have the most to offer and only the strongest players will survive.
On another topic - our cover feature this week takes a look at the battle that is raging between open source and good old Microsoft. As Con Zymaris, a long-time Linux proponent, says in our feature: 'We get more money from doing our $2000 Linux server install than another company would doing the $10,000 Microsoft installation'.
Are you finding the same thing? Vendors that are backing the Linux movement, the likes of HP, IBM and Novell, are heavily promoting open source channels to market.
But with this mind, are Linux installations turning into pure profit for your business or is it all smoke and mirrors? Are Linux and open source solutions ready for mass deployments on the desktop and at the server level?
I'd like to know your thoughts on this subject - particularly if you have dipped your toes in the open source waters and are having some success. Even if you have tried and failed. We would like to know what the barriers were with selling and installing open source solutions.
Byron Connolly is the editor of CRN. He can be contacted on (02) 8399 7648 or via email at bconnolly@techpartner.news.
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