Solnet expands in bid to catch e-commerce wave

By MICHAEL FOREMAN

Sun Microsystems New Zealand distributor Solnet will expand staffing by about a third in anticipation of rising demand for its e-commerce services.

Managing director Murray McNae said Solnet would recruit another 30 people in New Zealand this year, bringing its permanent staff total to 110, not including a further 30 on contract.

The expansion follows Solnet's announcement in June that it was acquiring a Melbourne software company with 22 staff and recruiting another 29 in Sydney, and comes in spite of financial results that reflected a difficult market.

Hardware revenues rose to $54 million in the year ending June 30, up 8 per cent on the previous year.

Though described by Mr McNae as a "healthy increase in a tight market," Solnet's hardware growth had slowed markedly from last year, when hardware revenue grew 39 per cent.

Sun and Solnet's services and development revenue grew 19 per cent to $34 million, resulting in total revenue of $88 million, up 17 per cent on last year.

In 1999, services accounted for $26 million, a 30 per cent rise on 1998.

Overall revenue total was 38 per cent up at $76 million.

Mr McNae said room for growth in the hardware sector was limited as Solnet already commanded 52 per cent of the Unix server market and rivals such as Hewlett Packard and IBM were clinging doggedly to their market share.

Solnet had nevertheless made sales of top-end E10,000 servers to WestpacTrust, Carter Holt Harvey, Telecom, Air New Zealand, the National Bank and ACC.

Mr McNae admitted Solnet was expanding faster than results would seem to call for, but he believed it was one of the few local firms able to capitalise on the coming e-commerce wave.

New Zealand had been slow to take up this area, but the company had noticed customers starting to have money available for e-commerce projects from April as the Y2K threat was laid to rest.

In the US, Sun reported revenues of $US15.7 billion, ($34.1 billion) a rise of 33 per cent on the previous year.

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