Merger faces turbulent weather

If I ever have to change my vocation, I can safely become a soothsayer because
whatever I predict turns out to be the realit. At the beginning of 2005 I had made
six predictions for the current year. Already, three of them have turned out
correct and there are still five more months to go.

The latest prediction, which is fast turning out to be a reality, is the
Ingram-Tech Pac merger. I had written that this merger would neither be smooth nor
will it make vendors and channels happy. In addition, the merger process will
not bee asy to implement.

I wouldn't say that I am proud of this prediction, but the fact of the
matter is that it is a stark reality.

The merger was announced last year in September. Ten months have gone by
since then but the merger process is still going on and on. The one face, which
it wanted to show to its customers from April 1, is still not a reality. Both
the organizations still exist as they were.

However, the most important factor of this merger process has been the
uncertainty, which hit the market. As a result, channels are not happy and
vendors in any case were less than positive about this merger.

Perhaps the biggest jolt to this merger process has been the rather abrupt
departure of SP Rajguru. For the last couple of years, he was not only the face
of Ingram in India but was also the person instrumental in building up the
company to it spresent size in the country. His calming presence could have made
all the difference in the market, something that the two merging entities sorely
needed. His departure does not augur well for Ingram and chances of more people
following suitis more than a possibility now.

As far as vendors or principals are concerned, they were in any case uneasy
with this merger. As expected, they have started broad-basing their distribution
strategy by going in for the second rung of distributors. For example, HP signed
up Rashi Peripherals for notebooks and Xerox has added Esys as its third
distribution partner. Others are also going to follow suit in the coming weeks.

This essentially means that another of my prediction hits bull's eye. I had
said that smaller distributors would emerge strong erand healthier as a result of
the Ingram-Tech Pac merger. This would be a direct result of the principals not
wanting to keep their eggs in one basket.

So where does all this leave the merger process? Is it going to be a failure?
Not really as the merged entity is already a billion dollar colossus. And some
groundwork has already been done. However, the speed at which things are being
implemented is not exactly what is needed. The merger process needs to run
fast and smoothen out the very roug hedges that have erupted.

Asim Raina