A common theme across the channel community now is whether to build new services skills, or acquire them.
Managing director of SMB integrator Evolve IT, Nick Moran, agreed it was a perfect time to buy if you had ready cash. Major incentives included an instant geographic footprint and a wider customer base.
“In the small business market, acquisitions have never been more attractive,” he said. “We have changed our model into managed services and now have 90 per cent of our services based on recurring revenue. If you are able to acquire a small business that is break/fix and move those clients to a recurring model, which fits into your systems and processes, it saves a lot on the costs of managing that customer.” The increased pace and maturity of the IT services space also encouraged organisations would acquire first, rather than build from the ground up, Moran claimed.
Klikon director, David Abouhaidar, was looking for both organic and acquisitions growth to bolster its infrastructure capacity and footprint along the east coast. He claimed a gap existed for a tier-two systems integrator to sit underneath the likes of Dimension Data, Frontline and Data#3 and service customers with 2000-5000 seats.
“There are a handful of players at the top level, who’ve got the whole market sewn up in the huge systems integration space,” Abouhaidar said.
“The market needs someone inbetween who’s not overly big, but who’s not in that top space either… that gap in the industry is what we are hoping to fill.”
For Accucom co-founder, Sam Sarkis, acquiring complementary businesses that struggled during the GFC because of a lack of business nous could also help expand its new managed services practice.
Although IDC’s Hore believed ASX-listed players were slower to move, several such as ASG Group and Synergy Plus have flagged their intention to continue acquiring, while listed distributors, itX and Cellnet, are on the hunt to spend cash reserves on niche acquisitions to bolt onto their operations.
