Advantage Group has sold the web development unit of its Wellington e-services business, formerly Glazier Systems, to the unit's general manager for an undisclosed sum.
E-services head Tony Stewart was one of the founders of website developer Glazier Systems, which was acquired by Advantage Group in 1999. Stewart's new company is to be known as Intergen.
Staff moving over to Intergen number 42 and include hosting services and “the creative team” working on the non-technical side of site design, as well as the technical developers, says Stewart. About 14 former Glazier people have stayed with Advantage, he says.
The sale is the result of an ongoing operations review. Advantage will maintain its e-services business through what was Campbell Pope, the Wellington software firm acquired by Advantage in May 2000. The remainder of the e-services operation will slightly "re-focus on consultancy, integration and package implementation”, says Advantage financial chief Stewart McKenzie, “but it won’t be that different from what they’ve been doing; just a different emphasis.”
McKenzie says demand for traditional web development services has fallen away compared to previous years. All development will now be done by Advantage's Auckland team, which is in close proximity to another recent acquisition, Aldridge Punter, but the company will occasionally work with Intergen on Wellington work. “In terms of web development, the industry is moving towards package-based development [using tools like] Vignette and Clarus,” says McKenzie.
Asked about declining profits and the fall of business in bespoke web development, Stewart agrees “the market is a bit soft at the moment”. But Advantage’s Wellington web-design business has been profitable for the past three months, he says. He adds, however, that it has been difficult to get a real picture of the unit’s productivity while it was involved with a large company.
The suggestion to buy out the unit came from Advantage, Stewart says. “We both agreed that when you’re selling people, a smaller closer company works better." Everyone can see more clearly the impact of what they’re doing, he says, and overheads like administration are less onerous. Stewart intends to sell down some of his shares to "key members of staff". Intergen was not interested in acquiring any part of Advantage's Auckland web operation Webmasters, Stewart says, because of its close ties with Aldridge Punter, and because it works on Unix and other open systems, while Glazier has been purely a Microsoft-oriented operation.