NSW-based integrator, Syncretize, has spun off its software division in an effort to free up both businesses.
Former managing director, Peter Stanford, will head up the Artefaction division while founder and director, Peter Walters, will continue to lead the IT services and integration business.
Walters said ongoing internal competition over resource allocation had hampered the growth of both companies for too long.
"Integration tends to hog a lot of resources and drags the software business in around the fringes," he said. "Software projects take the principals out of action for a few months, but with an integration business you need to be in day-to-day contact with your clients."
The problem was exacerbated by the company's integration business growing faster than its software division, Walters said.
"We are pretty closely linked to IBM and HP and have been growing by about 25 per cent a year," he said. "The software side is heavily linked to Microsoft and its .Net platform hasn't been growing as strongly as it could."
Free of its Microsoft-based partner, Syncretize was now free to work with third-party software vendors and build up its own in-house Linux team, Walters said.
"We can now look at moving more into security for things like host and network intrusion systems and building our own firewall product," he said.
Artefaction was already out working on new business - partnering with HP on a business development and consulting project, Walters said.
Both companies would be preferred service providers to each other, he said.