Leading distributor of IT products, Rectron, is extending its value proposition to clients through an exciting new acquisition.
Rectron has acquired a majority stake in accounting software development company, Palladium, strengthening its proposition in the accounting software arena.
“Diversification is critical to future sustainability,” says Gerhard Malan, Financial Director of Rectron. “Investing in companies that have the ingenuity to meet customers’ dynamic demands will go a long way to ensuring our future profitability and success.”
Palladium’s accounting software range features affordable, feature-rich, out-of-the-box functionality. Leading products, AccountMate and Acumatica offer clients the ability to modify the core source code itself, enabling complete flexibility with cloud or desktop deployment options.
IT distribution strategy is shifting away from products towards services and solutions. As such, it’s important for companies like Rectron to create greater value for their partners, who derive the majority of their revenue from ‘legacy software’ such as hardware, servers, storage, software, networking and desktops.
Unique cloud-based solutions
Palladium is unique to the South African accounting software landscape in that it is in the process of developing a cloud-based offering. “Through this investment, Rectron will offer its partners the support and services to grow their businesses around cloud and managed services,” comments Malan.
MD of Palladium, Stephen Corrigan, says there is a saturated market of legacy software in South Africa, adding that there aren’t many true cloud solutions in the market. “In order to remain competitive, businesses will need to adopt cloud-based business applications that offer viable alternatives to the unwieldy, inflexible and expensive systems that have long dominated the sector,” he says.
Resellers will gain a lot more revenue and profit from the products that Palladium offers than from products they would simply resell, adds Malan. “These products offer them the opportunity to provide their customers with consultation and additional service opportunities.”
Proudly South African
As one of few South African-owned accounting software on the market, Palladium is able to adapt more quickly to changing local requirements than its competitors.
It also provides customers with greater stability. All products are Microsoft-certified and use the Microsoft SQL server database, and therefore provide a superior level of supportable security
In partnering with Palladium, Rectron will absorb much of the smaller company’s administration burden, enabling it to focus on growth and product development. A common objective for both entities is to scale Palladium’s business as quickly as possible.
Corrigan says Palladium will benefit significantly by aligning itself with Rectron, not just because of the distributor’s relationship with thousands of resellers, but also because of its high degree of professionalism and impressive management infrastructure.
Over the first year of the new acquisition, Rectron’s priority will be to meet forecasted growth projections. “During this time Palladium will be able to leverage off of the strength of Rectron’s broad reseller base and will provide the necessary expertise to build on the success of Rectron’s cloud business,” says Malan.