Sun calls it quits with SolNet

After months of speculation of relationship trouble between Sun and New Zealand reseller SolNet, Sun has filed for divorce.

After months of speculation of relationship trouble between Sun and New Zealand reseller SolNet, Sun has filed for divorce.

Sun Australasia boss Jim Hassell told Computerworld Online yesterday that he has ended the supply agreement with SolNet “for financial reasons”.

“On Monday we stopped trading with SolNet,” says Hassell, refusing to say more for fear of “prejudicing any position we’re in”.

“We’re extremely disappointed and sad to be in this circumstance after a long and successful relationship.”

Wellington-based SolNet chairman Murray McNae is equally disappointed.

“The disappointment for us was the lack of consultation,” McNae says.

SolNet, which was founded by McNae 10 years ago, was Sun’s New Zealand sales agent until July, when its status changed to that of reseller-distributor. McNae says SolNet has been having discussions with Sun for some time about the impact of the change, and he had expected the negotiations to continue.

“It was surprising to be given notice of termination; we’re open to dialogue should Sun come to us.”

McNae says the new business relationship called for a big investment by SolNet in a services organisation, while leaving it to ride out the peaks and troughs of sales of Sun products.

“We wanted to participate in a normal supplier relationship.”

The Sun-SolNet partnership took a hit in April when SolNet northern region boss John Hanna left. He started a job a few months later at Computerland, which is activating a dormant Sun reseller agreement.

“When I departed the company it had a strong relationship with Sun and good forecast outlook,” Hanna says. “Now Computerland has a strong relationship with Sun.”

Some people are good at maintaining relationships and others aren’t, Hanna says.

“Obviously something has gone awry for this to happen after 10 years. It’s a real waste.”

He says Computerland will not be starting a “feeding frenzy” by going in pursuit of SolNet customers.

McNae won’t be drawn on how much money SolNet owes Sun, saying the suggestion that it is as much as $10 milllion is “ridiculous”. He says there is always money owed between supplier and customer and that SolNet is trading profitably.

“It has good cashflow; it’s a sound business.”

But the loss of Sun business will mean reshaping the company, and layoffs. SolNet has 110 staff in New Zealand (it has 12 in Australia), about 80 of whom are involved in software and services.

“In all likelihood there will be some who can’t be assimilated” into the services business, McNae says.

The debt to Sun will be dealt with as just one of the company’s obligations to creditors, he says.

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