Mergers sound death knell for supplier group

ITANZ, the organisation representing New Zealand ICT suppliers, faces extinction as consolidation of the sector causes its membership to shrink.

But Information Technology Association of New Zealand executive director Jim O'Neill is undismayed at the group's likely fate, which has been brought a step nearer with the creation of a new umbrella group for the sector.

"It's entirely possible that I'll be done out of a job," said Wellington-based O'Neill, a vocal supporter of the industry umbrella organisation.

"But I'm here to promote the industry, not promote my own empire."

The new group is ICT-New Zealand, which has been established to act as a voice for the ICT sector as a whole.

"There's been a lot of fragmentation in the industry," ICT-NZ acting chairman Malcolm Fraser said.

"So by putting some, all, or a few under a unified brand, we'll be better able to engage with offshore customers."

The industry has about 150 groups representing different interests.

The size of the New Zealand market means most ICT businesses soon look overseas for customers, Fraser says, and export attempts tend to be approached in an ad hoc way.

"When you've got lots of different companies going off and they're all members of different associations - and there's no one, single brand - it can get a little confusing."

He is not concerned that ICT-NZ could end up just adding to the confusion.

"We're not actually creating a new entity.

"Rather, we're creating a brand that eight or nine existing entities are gathering under."

The Wireless Forum, of which Fraser is vice-president, will be one of those member organisations. Others include the New Zealand Software Association, the Health IT Cluster, the New Zealand Computer Society and ITANZ.

Fraser said the model for drawing them together into ICT-NZ was being successfully applied in Singapore, Ireland and the UK.

ITANZ's O'Neill said mergers and acquisitions had erased more than 90 of his organisation's members from the IT landscape in the past decade, putting strain on its finances.

"Every year we lose four or five members. When Compaq and Hewlett-Packard merged, two of our biggest members became one."

Membership fees are dependent on organisation size, so mergers of that scale put a serious dent in ITANZ's coffers.

Further damage was done last year when Telecom acquired local IT firms Gen-i and Computerland.

O'Neill said a proposal outlining arguments to wind up the organisation would be put to remaining members in a few months.

"I would have no qualms about it sinking quietly into the sunset as I'd hope would happen to the other [ICT-NZ-member] organisations too."

ITANZ president David Irving, a director of the new organisation, said it was in line with a recommendation by ICT analyst group Gartner if New Zealand was to become a recognised international supplier of ICT products.

"I think it is a huge step in the right direction. The biggest goal of all of us is to have an organisation that is truly representative of our industry."

Different parts of the industry could retain their identities with special interest groups, Irving said.

Under present arrangements a wireless application developer for the health market, for example, could belong to four different organisations - the Wireless Forum, the Health IT Cluster, the New Zealand Software Association and ITANZ.