Australia's Solution 6 Holdings, which supplies business systems to accountants, will buy its New Zealand distributor to underpin its launch as an ASP - renting software across the Internet - and portal company.
Solution 6 will acquire Auckland-based Office Resource Centre (ORC) for $A2.5 million in cash and shares and will merge ORC into Solution 6 New Zealand. Until now Solution 6's local operation has been a software development house with 25 developers working on practice management software aimed at large organisations.
ORC director Greg Bateman will become the New Zealand manager of Solution 6, while ORC managing director Doug Hanna will work in research and development for Solution 6 Australia. Hanna will, however, remain based in Auckland.
Bateman says Solution 6 is broadening its scope into the ASP and portal markets and plans to do so through chartered accountant firms.
In Australia Solution 6 has partnered with Unisys and will pilot an ASP service offering SAP applications in September. It expects to launch as an ASP in Australia at the end of the year, followed shortly thereafter by a global roll-out, including New Zealand.
Bateman says Solution 6 will deliver its service through chartered accountants.
"By acquiring ORC they've gained our client base of chartered accountants which gives more direct access to end-users.
"Chartered accountants deal with a large volume of the business community and are an excellent channel for new products coming out from Solution 6. The ASP service will potentially have commercial applications that clients of chartered accountants will use.
"Another service we're looking at producing is financial planning via the Internet. Solution 6 have invested in a share brokerage in Australia. Accountants will be able to log on to the service, put their client profile up and get advice for the client."
Bateman says the financial planning site, to be positioned as a financial services Internet portal, will launch within the next six months.
Hanna says Solution 6's ownership will provide growth capital as well as access to people and technology resources to bring products to market faster and drive increased sales in the region.
According to Chris Tyler Solution 6 managing director and CEO (and former general manager of Telecom Xtra), the company's products are used by more than half the accounting firms in New Zealand including "the big five" practices. Solution 6 products include client accounting systems, taxation software and practice management system for chartered accountants.
Two weeks ago Australian telco Telstra took a 15% stake in Solution 6, worth around $A50 million ($US32.5 million), largely because of its ASP and portal strategies.