Among CPA firms, mergers are often a public thing. Firms commonly send out press releases trumpeting new alliances. Accounting software VARs are more private, perhaps because they are still more oriented toward technology than marketing.
Sure, there were the public roll-up efforts such as ePartners, which publicized every new acquisition. More often, VARs are quieter. But over the last few years, the number of mergers, and formal and informal alliances, has been increasing. Ultimately, these may prove more successful than the noisier aggregations.
Driven by the increasing scale required by more sophisticated products and ballooning vendor product lines, VARs have been drawing together. This started years ago with a group like Atrac, which pulled together a handful of Epicor VARs, but went dormant as Epicor struggled and sales withered.
More quietly, the Interdyn Group formed, and over the years has become increasingly formal, creating Interdyn as a company owned by what are largely highly successful Great Plain resellers. The group claims to be the largest reseller of products from Microsoft Business Solutions, larger than ePartners or the Danish-based Aston Group. Depending on how you define companies, Interdyn has a claim.
The vendors are encouraging this coalescence, because having fewer, bigger customers is more efficient. On its way to trimming its channel, Exact Software has consented to arrangements such as the Esta Group, formed last summer, which has drawn together a number of Midwestern Macola VARs. They gain buying power by using a single operation’s reseller number. In Texas, the Russell Flowers organization has been buying up smaller Macola VARs.
We will see more of this because the economics favor larger reselling firms. It is simply cheaper to serve fewer customers and bigger organizations can afford the costs of training and certification, and can more easily make themselves into adept marketers that have a greater chance of success.
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