Brands Survive Modem Deal
Sydney Morning Herald
Tuesday February 24, 1998
IT'S the brightest star in the night sky, 8.6 light-years from earth. It's a road in leafy Lane Cove where modem maker Banksia hung its shingle. Now it's the name of Australia's newest and instantly dominant modem company.
Forged by the merger of Banksia and NetComm, Sirius Technologies launched last week with a commanding estimated 60 per cent share of the Australian modem market.
But don't go looking for black boxes bearing the company's name and new logo, which integrates elements of the previous Banksia and NetComm designs. While Sirius will be their common sire, the brands of Avtek, Banksia, Dataplex, NetComm and Simple remain on the shelves.
"Our biggest challenge is to maintain focus on the brands and not lose brand equity," says David Stewart, the founder of Banksia and now managing director of Sirius Technologies.
Stewart believes the profile and profitability of each brand can be assured by careful positioning to reinforce their natural characteristics.
Avtek stays as the bargain-basement modem sold on price alone, to compete against Asian imports. Internal models will help Sirius chase OEM (original equipment manufacturer) business.
The mass merchant channel will push Simple to home users and students. The Banksia house brand will be fine-tuned for small- to medium-sized enterprises with up to 50 users and the product set broadened to "communications appliances", such as the WebRamp M3 modem sharing hub and the new CommServer, a remote access solution for small offices running Windows 95 networks.
Corporate and government users seeking bullet-proof modems as well as modem racks will be pointed towards NetComm, while Dataplex stays at the big end of town - the "MIS 4000" - for whom data is their lifeblood.
Sirius will stay inside their core activities and have identified remote access, dial-up security (lead by NetComm's new SmartSecurity firewall) and Internet-based voice, video and e-commerce as future areas for growth. Anything outside that matrix is, in the words of one Sirius executive, "excess baggage".
Sirius will sell their 22 per cent stake in ISP Connect.com, inherited from NetComm and currently valued at $3.2 million. Keen to signal that NetComm's troubled cable days were not a part of the Sirius business model, Stewart emphasised that Sirius "had no financial or shareholder involvement in Aurora Communications", the NetComm cable modem spin-off headed by former NetComm CEO Chris Howells.
Asked to cite the biggest opportunities ahead, Stewart volunteered the OEM market and the shift to 56K.
"We're already shipping some modems to Malaysia, where they are built into PCs that are then sold back into the Australian channel, so there's not a lot lost offshore right now. But supplying internal modems to OEMs is a growth area and we've set up a dedicated business unit to chase that."
Sirius claim to have nailed the modem replacement business as following a two-year cycle based on speed, and one for which the 56K upswing has only just begun. Agreement on the new V.90 standard had ended the protocol wars and represented a "milestone for the modem industry that would inject confidence into resellers and consumers".
© 1998 Sydney Morning Herald
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