Datamatic, one of New Zealand’s longest-standing distributors, has closed its doors.
“There’s no money in IT. There’s no money in distribution,” says John Forster, who describes himself as the “Australian chairman” of Datamatic.
Forster plans to transfer distribution rights for any supplier that will allow it from Datamatic to Renaissance, which is also owned by Datamatic’s Singaporean parent company, ACMA.
“They don’t want all of them, only the ones that suit their model,” says Forster.
Datamatic’s slide began in mid 1995. Prior to that it had been sole distributor of Novell products in New Zealand. In 1993, 80% of Datamatic's revenues had come from Novell products, but by 1995 this had dropped to 25%. The appointment of Comtech as co-distributor lead to a falling out between Datamatic and Novell and their relationship was severed.
After that, Datamatic lost the rights to distribute a range of products, including Citrix, Iomega and Dr Solomon’s, and finally lost the Cisco account earlier this month.
“After 31 years in the industry I’ve had enough of it,” says Forster, who says there will be redundancies, but hopes that some of the staff may find work with Renaissance before the end of the year.
Forster hopes to wrap up Datamatic completely within three months.
“We had four other IT companies in Datamatic and about a year ago we got rid of all of them. This one is the last.”
Forster claims the current model of tight margins and high turnover has driven him out of the industry.
“You need twice as many sales and twice as much stock. The cash never gets turned into a dividend so you never make a profit. The only way to make a profit is to close down the business.”