Can you start by giving us your background with Commander (ASX:CDR)?
Steve Evans (SE): I joined Commander in 1999 when it had just been separated out from Telstra. My first job was to separate out the databases. I was part of the original management team at Westel. At the time Telstra decided to privatise that SME/key telephone Systems [KTS] business, there was a joint venture between Plessey Asia-Pacific and Telstra, which still owned 30 per cent. So it was called PlesTel. The purpose was to firstly create a separate company that looked after the KTS business, but then to grow that into providing all IT and telco services to SMEs. It was an exciting time – the board then, including Michael Brogan, had a great vision about where they saw the business going.
We changed our name to Commander in 2000 and floated the business. We then acquired a couple of small IT resellers – those being OSI in NSW and CSI in Victoria. That was our first foray into IT resale. At the time I was heading up IT and doing the IT operations.
In 2002, I was moved into heading up what was our fledgling data business. We then acquired Centari, which really gave us a foothold and presence. We were HP’s eighth or tenth reseller at that time. Centari were an $80-$90 million business back then, so it gave us an $80-$90 million footprint in IT resale. During 2002/2003 we bedded that acquisition down and made a few other smaller acquisitions, such as UniTel, and set about creating, certainly in my part of the business, some great growth. We recruited great people as well as made a strategic commitment to Canberra and starting growing our business there. Pre-Volante I think we’d grown organically and through acquisition to a $300 million business.
So Commander already had a significant public sector business pre-Volante?
SE: In our own right we were the largest non-multinational hardware provider to Federal Government in 2006, so we had a huge business there. Whereas Volante had a great managed services business, we had IT equipment and supporting services business.
I had a fantastic time between joining Commander in 1999 and up to the acquisition of Volante. That’s where you could start to feel things were coming off the rails.
Everybody blames the Volante acquisition for Commander’s growth problems, but were there signs before then that the company was growing too fast?
SE: I don’t think Commander was growing too fast. We had three eras – we had the Michael Brogan era when our growth was very measured and strategic. Michael was all about governance and we had a very focused board looking at steady growth. When the board and chairman changed in 2003, Elizabeth Nosworthy and Adrian Coote brought a different skill set.