CSC offloads reseller business

Services giant CSC Australia has sold its product reseller business to Level 3 Communications subsidiary Software Spectrum, leaving 60 staff in the lurch.

In a statement issued to CRN, the company said it had "negotiated the successful transfer of the software reseller relationships with customers of its product business to Software Spectrum".

The decision followed major changes in the hardware market and an extensive examination of the product business, a reseller of desktop hardware and software licences to corporate clients, CSC said.

Mike Shove, managing director of CSC's Australian operations, said while the company's product business had achieved strong revenue during the peak activities associated with Y2K, the market had changed substantially, revenue had declined and "future projections indicate it is not a viable long-term business for CSC".

CSC said it would explore alternative job opportunities for the 60 staff involved in the division. Redundancy packages would be offered to staff that cannot be found new jobs within the organisation, CSC said.

Shove said CSC would fulfil all existing orders and a support structure had been set up "to ensure this occurs as seamlessly as possible for its customers".

CSC declined Australian rival NetOptions' offer to buy the reseller group in March after several months of negotiations. CSC had been investigating this sale since November 2003.

It is believed that the reseller group made $150 million a year for the company but PC reseller and recruitment activities had fallen 10 to 12 percent last year.

Richard Marlow, general manager product at CSC, declined to comment. Financial terms of the sale were not disclosed. It was expected that it would be closed on 6 August.

Keith Coogan, CEO at Software Spectrum, said in a statement: "The agreement makes sound strategic sense for our company. This transaction will enable us to further scale our business and to build on CSC's strong relationships with leading Australian businesses".

Andrea Della Mattea, APAC managing director at Software Spectrum, said some of the 60 staff would be offered positions with Software Spectrum but was not sure how many.

Della Mattea declined to reveal how many customers Software Spectrum had picked up as a result of the transaction. CSC has around 4000 staff in Australia.