And the big get, well you know, it is as it has always been.
In the last three weeks, consolidation in the software reseller market moved to a new level as there were significant deals in both the Sage Software and Microsoft channels, following on a summer of strong activity.
In the Microsoft world, Altara, a $16-million-a-year New Jersey reseller was acquired by a New York company called Computer Generated Solutions, which has a diverse set of services, including systems integration, and outsourcing, and which is not well known in this market.
Meanwhile, the Dallas-based MIS Group, which has been stirring up the channel, acquired two more Timberline resellers -- Timberline is Sage’s high-ended construction accounting software -- to bring it to about a $25 million run rate.
The thing that these purchases have in common is that accounting software is just a piece of the puzzle, and these companies with broader services are becoming more common. Tectura, which has pushed itself to nearly $200 million a year comes to mind, since it too is far more than just an accounting software reseller, and a market in which accounting software VARs offered products and services that were pretty much like those offered by competitors are becoming companies that don’t do the same things.
The CGS move follows a fairly recent purchase of FolioDev, which markets to the professional services sector, including advertising and marketing, and architecture and engineering.
During the summer, the MIS Group, a Timberline dealer, merged with the Enterprise Resource Group, an MAS 90/200/500 reseller. In the latest move, MIS acquired CreativeWare and Texas State Construction Systems, in what chief executive Robert Muir described as purchase that cost somewhere between $1 million and $10 million.
The deal makes MIS a powerhouse in the southwest market. (Although the company was projecting a $27 million run rate in August before the latest deal). Muir says the company won’t buy more Timberline VARs, but is certainly on the look for MAS dealers to pick up.
One thing that these moves have had in common is that they involve quality organizations. All of the Timberline dealers involved in the growing MIS family and ERG had been President’s Circle dealers and Altara had been an Inner Circle VAR, although it fell off the list for 2006.
Still, consolidation isn’t pushing weak dealers together to build strong VARs. It’s bringing together the accomplished players and looking to make them better.
This is not a game amateurs can play any more.
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