ASX-listed communications group Datafast has acquired the ISP assets of Melbourne-based Ocean Internet.
Ocean had previously outsourced the management of the ISP to Datafast in October 2001 while it focused on one of its core business units, software development. But even with the ISP being managed by an outsourced partner, Ocean CEO Geoff Hutchinson said the unit was proving a distraction to the company's core competency, hence the sale to Datafast for an undisclosed sum.
Datafast Telecommunications owns both a retail and wholesale ISP as well as a voice communications business. CEO Frank Romanin said he expects significant profits from the purchase of the Ocean Internet ISP with the addition of 1,500 subscribers and around $500,000 of extra annual income at little cost to the business.
The Ocean business began in 1993, with one of its founders focused on applications development services and the other founder focused on hardware and networking support services. In 1995, the Internet began to rear its head and the company established one of Melbourne's first ISPs.
The combination of applications development and ISP services led the company to move into Web development, further enhancing the software development capabilities within the company as a whole. In 1999, the group was merged with Australian Horizons to attract venture capital funding and Geoff Hutchinson was appointed CEO to assist the further development of the merged entity.
Hutchinson has since become convinced that the ISP business is a less interesting proposition than the company's skills in software development. Over time, Ocean's developers forged a reputation for producing quality operational management software, gaining a foothold in the niche areas of Government and Defence.
This software was installed at three air bases for the Royal Australian Air Force, and has since been marketed to Australian Coastwatch (Customs), a customer that will use the system to manage and map its assets over a wide geographic area. Ocean is also in the final stages of signing a deal with the Royal Air Force of Canada.
"We found [owning the ISP business] a distraction," Hutchinson said. "We didn't want to be managing a multimillion-dollar Defence contract and also getting calls about the usual hassles of owning an ISP.