I wish I totally understood totally how it would work, I guess it's just the usual "creating money using bits of paper" kinda thing
the risk naturally being on the shmucks who buy in (and the people who still hold)
News in the IT channels today is that Commander are keeping things exactly as they are and have no intentions of selling off anything, diluting or dropping any of the LOB's.
That's a good and a bad thing as anyone in the market would attest to. There are some lines of business that are just plain ugly in ICT. Hardware products and anything that gets into the commodity phase are losing margin hand over fist.
For example, Commander (and many others) would be bidding into the NSW Government. Anyone in the market knows that the new Commerce Contracts have wiped out margin from core commodities by standardising and negotiation.
Similarly the sell thru / attach of services isnt as prevalent. Servers, Blades, Telecoms equipment, Desktops, Screens etc etc are becoming "plug the thing in and they work" - even the more complex and mystical stuff is being simplified.
this removes erodes the margin almost immediately. So the whole systems integration sell is moving up the food chain or out the door.
However, it's a good thing if they have the time left to "get the model right" - like Dimension Data did after spending a good 2 years recreating themselves into the powerhouse they are now. But do commander have the time and the money to do that?
Someone mentioned on the forum before. The reps have left. Where do those reps (and those relationships) go to and will they sell competitively?
Also, will customers entrust large ongoing contracts to a company that may change tactics in the next few months
Certainly there is a lot of uncertainty. I am still waiting for the bottom but we may have it now
CDR Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
