Computerland set to stay separate

By PAUL BRISLEN

Telecom's newly acquired IT systems company Computerland won't be integrated into Telecom's Advanced Solutions Group for at least a year - if at all.

Telecom yesterday bought Computerland for $26 million from its Singaporean owners following on from the purchase of systems integrator Gen-i for $62.5 million in June.

Telecom CIO Mark Ratcliffe, who runs Advanced Solutions and Gen-i, says that while those two organisations fit together quite naturally, Computerland is a different proposition.

"They tend to have a slightly different market focus."

Gen-i and Advanced Solutions typically deal with the high-end corporate IT market while Computerland traditionally targets the medium to small enterprise.

Ratcliffe said Computerland also had a different business model that could pose problems for any full merger.

"Computerland is quite different from Gen-i in that it has this franchisee model."

Almost half of Computerland's staff were employed by nine franchise businesses throughout the country and Ratcliffe said one potential model he was considering was using those as the basis for a series of regional offices.

"That's just one model we're looking at."

Telecom already operates a similar model for its sales teams with a split between high-end corporate sales and the regional offices.

"That seems to work quite well, having a slightly different engagement model with different customers," Ratcliffe said.

He is also wary of trying to merge three organisations into one.

"There's always a degree of risk associated with any merger, a number of them do fail. Restructuring can also slow momentum within a company and, while all three are firing well, we didn't want to do that."

Computerland has 360 staff in Auckland, another 220 staff around the country in franchise operations and last year had a trading profit of $3.6 million on revenues of $100 million.

Once Computerland's purchase is complete, Ratcliffe will have one of the largest IT services companies in New Zealand, second only in head count to US giant EDS - which, by coincidence, supports Telecom's internal IT system.