Logical Networks has bought long-time IBM-centric systems integrator Computer Systems Integration (CSI) for an undisclosed sum.
Logical has its strong focus in networking, says chief Murray Jurgeleit, but it has become increasingly evident that the applications strongly tied with networking, such as voice over IP, require substantial processing power and hence "systems skills".
"Conversely, we bring a network strength to CSI," Jurgeleit says, an area where it is less strong.
As IBM’s largest reseller, the company is a particularly desirable acquisition. CSI has also been financially weak of late, making it a takeover target.
"The company took its hits in the post-Y2K slump," Jurgeleit says. "It has been profitable, but marginally so."
There is, he acknowledges, a risk of CSI’s IBM specialisation focusing Logical on that vendor.
"But in our network business we’re very Cisco-centric. Both of us have relationships with other vendors. It will be a challenge to preserve the vendor independence expected of a systems integrator, but on the other hand, I have to say at the moment that IBM’s product range is outstanding."
Jurgeleit previously held senior positions in IBM.
CSI managing director David Heald was unavailable at deadline, and no one else in the company was willing to comment.
IBM, after first saying it had a pre-prepared statement on the credit worthiness of CSI “should anyone inquire”, belatedly chose not to release the statement on the basis of internal legal advice.
Reseller News understands the purchase is being funded by Logical’s UK parent company, which itself has been on the acquisition trail to broaden its portfolio into software development.
CSI, which is best known as an AS/400 and RS/6000 reseller, did much of the software development technical work for the Kachingo loyalty card scheme. It’s thought that Logical may be taking the scheme to the UK.
CSI was established in 1978 and sold to IBM late in the 1990s. But because owning its own remarketer was not practical, IBM divided the company into two. Half became IBM Global Services and half was sold to longtime industry identity Brian Heald and Michael Ahkoy, who operates an IBM dealership in Fiji and other parts of the Pacific.
The New Zealand operation of CSI is headquartered in Wellington, with offices in Auckland and Christchurch. The company also offers the Maximise enterprise resource planning suite and a range of retail hardware and software solutions.
Reseller News has been told the CSI operation will be consolidated into Logical when Logical moves to its new premises in Wellington, the former Hewlett-Packard building. Earlier this year Logical laid of around six staff as a result of internal restructuring.