Dataflow sinks under perfect storm

A search and rescue mission for software distributor, Dataflow has been scuttled after a buyer failed to materialise, causing the 17 year old, $89 million company to be liquidated.

Martin Madden of Arthur Anderson told The Australian Financial Review today Dataflow will be fully liquidated, ending any hope the distributor had of returning to life.

Curiously, the collapse comes despite significant investments in the company as recently as February by Allco Finance Group and South African investor Brait Capital.

Attracting a buyer proved to difficult for Dataflow, which was floundering in a perfect storm of events including a botched enterprise resource planning (ERP) implementation, departure of MD Michael Touma and desertion of life-blood suppliers such as Microsoft and computer-games supplier Activision.

The termination of the Microsoft deal slashed an estimated 60 per cent off Dataflow's revenues according to company sources.

Madden has reportedly blamed Dataflow's relationship-centred business structure for the failure to find a buyer for the company. Although some offers had been made, none of the interested parties were prepared to take on the entire business.

About half of the employees had been retained to wind-up the business, and all will now receive full pay out entitlements, Madden said in the report.

Dataflow's 17 year history in the Australian channel saw it become one of the key players in the education software market. Channel research company Inform reports it had revenues of $89 million for the 1998/99 financial year, a rise of just $5 million on the previous year.

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