Sensis jumps into IT outsourcing

Sensis jumps into IT outsourcing

Sensis has revealed it is making a serious play for the largely untapped SME IT outsourcing market to complement its growing swag of search, advertising and directory products.

Known as Invizage, the IT services shop offers consultancy services, hardware and software to the 420,000 existing Yellow Pages advertisers routinely snubbed by larger services players and resellers, enabling existing Sensis customers to bundle their IT needs into the same package as their print, online and telephone directory services purchases.

Sensis acquired a controlling interest in Invizage (at least 51 per cent) in March 2004 and has quietly been plugging away at delivering solutions to smaller enterprises without the time, inclination or skills to run their own IT set-up – typically in the one-to-50-desktop range.

Originally founded, and still run by, Brad Bond and Paul Adler, Invizage's origins trace back to the bedroom of a rented, share house.

Sensis CEO Andrew Day said Invizage had so far reached forecasts set for it, bolstered in part by Telstra's Big Pond help desk.

"The Telstra BigPond people who can't take the router-type enquiries – are being referred to Invizage," Day said.

While Sensis will not disclose either the price or operating revenues of its new services toy, Invizage communications manager Fiona Harrington said the company estimated SME IT spend in Australia will reach $12 billion within three years.

Harrington said Invizage has around 7000 customers, 70 staff and 100,000 products with offices operating in Sydney, Melbourne, Brisbane. Most of Invizage's staff is IT centric.

"Small business is a different kettle of fish. [They] want IT to work and forget about it. The financial controller doesn't want to spend time fixing things," Harrington said.

In terms of vendor alliances, Invizage appears to have little trouble attracting brand names, with Microsoft, IBM, Cisco, Intel, HP, Symantec, Veritas and Adobe all listed as partners.

In terms of acquisition strategy and management, the Invizage deal closely resembles Telstra's successful raid on Kaz, where upper management has been retained and given autonomy rather than having a Telstra management model foisted from above.

Sensis acquisition intentions also captured the imagination of market analysts, with Deutsche Bank analyst Richard Long looking for answers from Sensis CEO Andrew Day and Telstra GMD for wholesale, broadband and media Bruce Ackhurst as to what lay ahead.

Day immediately ruled out any offshore search acquisitions, saying they were both too costly and offered Sensis little revenue potential compared to the domestic market.

Responding to questioning over IT expenditure by Macquarie Bank analyst Ian Martin, Day said Sensis' ratio of capital IT spend in proportion to revenue was "quite small, and that's a nice surprise".

SMS search sooner rather than later

Other new offerings to come out of Sensis' newly harmonised IT environment will also include the ability to execute directory queries via SMS and text from its Linux driven, 5-terabyte Oracle 10g database known internally as "The Bucket".\

According to Sensis general manager search, Greg Ellis, Sensis will offer a text-based query service to be offered as a beta trial in the first quarter of 2005.

"Text-based searching is something that we are looking at closely. Search is very likely to be a revenue-share model [between carriers and Sensis] based on pay-for-performance. When you have selected a restaurant through either the Telstra or Optus networks, we know you have selected it, we charge an amount for that and we share that with the carrier," Ellis said.

Customers would pay a text-based charge for the SMS query, while carriers will be offered a range of payment options such as subscription and revenue sharing to access the service.

Sensis currently sells directory assistance data from its back-end to carriers operating in Australia including Vodafone, Optus and Telstra.

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