Updated: Fujitsu buys Kaz
- 02 March, 2009 09:02
- Comments 5
Fujitsu has acquired Telstra (ASX: TLS) IT services subsidiary, Kaz Group, for $200 million.
In a statement, Fujitsu said the deal would expand its customer base, skills and national footprint and make it Australia’s third-largest IT company by revenue. Combined, the pair will have nearly 5000 staff.
The acquisition was in line with Fujitsu’s long-term objectives to grow its Australian business and provide broader consulting, application and infrastructure services, Fujitsu corporate first senior vice-president and president of global business, Richard Christou, said in a statement.
Rumours of Fujitsu’s intentions to acquire Kaz have been circulating for over six months. Last August, sources told ARN the pair had been unable to come to an agreement over the purchase price or terms and conditions.
In an interview with ARN, Australian CEO, Rod Vawdrey said Kaz delivered broader skills particularly around service-oriented architecture (SOA), which was gaining popularity within Fujitsu’s SAP customer base. Both organisations also partner with Microsoft and Cisco.
“This is significant because it gives us complementary capabilities around geography and customers,” he said. “It’s amazing how well it fits together – we’ll have 5000 people and be able to compete with the big boys in all segments.
“Many of Kaz’s council and government customers are different to ours, which means we’ll have a wider customer set. Also, with a number of customers, they’re providing one service, while we are doing the other – for example, applications and infrastructure. This allows us to call more customers and maintain deeper relationships.”
Vawdrey denied the economic downturn would hinder the acquisition’s success or the combined group’s long-term growth. He added there were no plans to cut headcount.
“Good companies in turbulent times need to be focused on core business. Our core business is end-to-end IT services. By expanding our business in those core areas, we are about being more competitive and offering more capability,” he said. “We are in good shape and are taking on a good business – we will be more competitive through scale, and be in a position to take advantage when the recovery happens.
“We are finding that services are faring fairly well. Customers are stretching the life of hardware, but services are holding up.”
Telstra enterprise and government group management director, David Thodey, said the telco no longer considered ownership of an IT services business as core to its strategy.
“Telstra will continue to deliver centralised network services to our customers through our network enterprise services business,” he said in the statement. “However, we will also continue to look for opportunities to work with Fujitsu in the delivery of IT services.”
Fujitsu and Telstra will continue to work together as part of a strategic alliance, Vawdrey said. He cited unified communications and virtualisation deployments as areas of opportunity.
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Comments
AngryOldGuy
Long time coming...
...this has been on the cards for such a long time. Does anyone wonder why it took so long to get through? And could there be possibly be any connection between the departure of El Sol and Telstra suddenly becoming easy to do business with?
Mickey
The price is right
Most companies will sell up at the right price. $200 million, was a good enough reason for Telstra to sell it off.
Pete
It's about time !!! Phone companies don't understand IT, and never will. Optus is going through the same painful lesson with Alphawest, who they bought a couple of years ago. They cannot get it to perform, reverted to retrenchments before Christmas, and more to come later this month.
Good move Fujitsu - now watch KAZ once again grow.
Anonymous
contradiction
It actually states that Telstra is keeping the core network and SP services. Now What is a definition of IT? A broad understanding prevailing is that IP =IT, where this is far from being the case. These days most of the core services are based on IP, or other parts of IT&T for what it matters. What may be correct though is the SP model versus the Enterprise model, as the customer base is the most important factor determining the business modeling and mindset respectively.
Also, on the second point, the critical and optimal volume theories actually should put the attention alarm lamp on... being too big is not always positive - Think about big telcos and why KAZ integration was not that successful.
Anonymous
Kaz might be a good company to work for again.
Bitter.
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