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Merger Mania and the Reseller

When my editors asked me last week to write my column about the sale of the IBM PC Division to Lenovo, I delayed for a couple of days. There were two reasons. The first is that I didn’t want to provide an instant analysis to something that required more thought. The second was that there […]

Written By: Wayne Rash

Dec 17, 2004

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When my editors asked me last week to write my column about the sale of the IBM PC Division to Lenovo, I delayed for a couple of days.

There were two reasons. The first is that I didn’t want to provide an instant analysis to something that required more thought. The second was that there were so many rumors of similar corporate actions in the wind that I wanted to see what other shoes were going to drop.

As it happens, we’ve had four major corporate moves announced or leaked in the past week. There’s IBM-Lenovo, of course. There’s also Symantec’s acquisition of Veritas, Oracle’s acquisition of PeopleSoft, and the Sprint-Nextel merger. Depending on what sort of products you resell or what kind of consulting you provide with those products, these actions may not matter to you. But they probably do.

The most likely to matter to you is the IBM-Lenovo sale. If you’re an IBM reseller, you’re going to have to take more time to explain that IBM’s PC products have been outsourced for years, and the sale won’t change that.

If you’re competing against IBM resellers, the sale will start to loosen the grip IBM has had on the corporate buyer’s mindshare. White Box vendors will have some breathing room, and that will grow during the five years of co-branding before IBM’s name disappears from the PC marketplace.

More importantly, the IBM sale demonstrates clearly that it doesn’t matter so much who actually assembles a computer. What matters is how well it’s done, how good the engineering is, and how well it’s supported. If this isn’t an opening for a reseller, I don’t know what is.

Click here to read the column, “IBM’s PC Biz Sale Will Be Ho-Hum for Resellers.”

The other mergers will have a more specific impact, depending on the individual business involved. Oracle’s acquisition of PeopleSoft will reduce competition and will probably put some integrators in conflict with former partners as companies that were serving these respective communities find themselves either out in the cold, or serving exactly the same master.

Symantec’s acquisition of Veritas will probably matter most to companies that provide Veritas to their customers. As the product is subsumed into Symantec, the role of those companies will become less clear. On the other hand, those that remain will have a lot more to sell, and a much better chance of providing a one-stop solution to their clients.

The Sprint-Nextel merger will basically mean that Sprint gets Nextel’s push-to-talk technology and frequencies, and a lot of their cell sites. Nextel customers will eventually have to replace their phones as Nextel moves to CDMA technology. If you’re planning to provide high-speed wireless data to your customers, this means you’ll have a better coverage area and fewer gaps.

Individually, none of these acquisitions and mergers creates a huge problem. Taken together, however, they may be ominous.

Each reduces the choices you can provide to your customers. Ultimately, it’ll be less likely that you’ll be able to find exactly the solution your customers need. More importantly, the reduced competition will mean higher prices and less service. Your job will get harder.

On the other hand, your opportunities will improve. After all, if the big manufacturers, software houses and providers won’t provide products you need, that leaves it up to you. And there you can reap the profits.

Check out eWEEK.com’s for the latest news, reviews and analysis on IT management issues.

Merger Mania and the Reseller

Wayne Rash

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