Aussie IT integrators merger symptomatic of the market

ComputerCorp will buy Synergy Plus for more than $9 million and merge with services group S Central to create a group employing 330.

It won't match the force of local players such as TechOne (700 workers), SMS (1200 workers); Oakton (1300 workers) and Data#3 (450 workers).

But it may become another option as a systems integrator/subcontractor in some of larger deals, said Jens Butler, analyst at Ovum.

He told CRN, the combined integrator would expect to be competitive in some smaller deals and possibly as a component in bigger deals - depending upon the partner strategy.

The integration of all three companies into a larger organisation could make it harder to react to constant changes in the marketplace.

Butler said at the moment, stability is most probably a more valuable attribute than flexibility.

"It depends upon the integration planning, structures, controls and what the go to market will be," he said.

ComputerCorp's recent merger acquisition/merger comes off the back of its purchase of Paragon IT and Paragon Systems in December 2008.

"ComputerCorp has a history in [IT integration] space and they are focusing on their key services areas in which revenue is still growing," said Butler.

"Renewable services revenue is pretty critical at the moment to tie organisations over the next 12 to 18 months.

"Stability and a reasonable size will be key components of survival going forward."

Butler said the consolidation was part of a continuing trend in the service provider market. 

"Given the global economic situation, expect this to continue," he said.