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​How Datacom cracked a billion dollars

​How Datacom cracked a billion dollars

Reseller News examines the books of New Zealand’s largest IT services provider.

Jonathan Ladd - CEO, Datacom Group

Jonathan Ladd - CEO, Datacom Group

“There’s much focus on that word ‘disruption’ - almost an obsession in the IT space to be the ‘Uber of X’.”

Yet for those walking the corridors of power at Datacom, don’t expect to see any clichéd cut outs of inspirational quotes on the wall.

“That is not what we’re chasing at Datacom,” Datacom Group CEO, Jonathan Ladd, said. “We won’t pretend to be a start-up, and we don’t compete with those operators.”

Driven by ambition, yet grounded in reality, Ladd leads a business happy to do the opposite of most, chasing a custom-made path to profit by refusing to be side-tracked by industry hype.

It’s such an approach that helped deliver the company’s best figures in over half a century, with the privately owned and operated business completing a solid year’s trading for the year ended 31 March 2016.

Specifically, the highlight was an increase in revenue on the previous year of 13.0 per cent, to $1.058 billion.

Coupled with a net profit before tax of $41.2 million (up 16.7 per cent) and a net profit after tax of $27.2 million (up $27.2 million) and the business continues to build on its solid New Zealand foundations.

In becoming the first Kiwi technology company to hit $1 billion in sales, Datacom has also flexed its muscles across the Tasman, claiming several key scalps across the Australian IT industry.

As revealed via the company’s annual report for 2016, Australia and Asia experienced a revenue increase of 12.9 per cent over the previous year, while New Zealand’s revenue increased by 13.1 per cent, continuing the trend of continuous growth observed during the past decade.

“This past year has been a key one for Datacom as we passed the $1 billion mark in annual revenue,” Ladd said. “This is not just a huge achievement for Datacom but for any technology company in our sector. Our future is looking bright.

“Throughout the IT industry, many continue to grapple with falling margins and increased costs across their traditional lines of business.

“The emergence of new technologies that completely upend the ‘normal’ way of doing things means that often we have to take radical steps to reform our own internal processes and strategies to remain agile and effective.

“It hasn’t been easy for us or our competitors, but at Datacom we are now seeing these changes to our company’s long-term strategy starting to bear fruit.”

Ladd said Datacom has “invested significantly” back into the business over a number of years, helping to standardise infrastructure, security and business offerings, alongside creating new products and services across vertical segments.

“This is not just about catering to customers’ demands now, which are extensive and unparalleled in the history of our industry, but also looking at what they may want next and the opportunities available to them in applying the new technologies,” he explained.

“We are doing this by developing and running systems and services for our customers and also through investing in sector-leading products and services designed around the current and future requirements of specific verticals.”

To achieve this however, Ladd acknowledged that the big fish in the Kiwi pool must continually evolve and adapt to changing market conditions, leveraging its size and resources to develop a competitive advantage in a cut-throat local market.

“Our job is to ensure that we are prepared internally to respond to those future changes in the market,” he added.

Central to this is Datacom’s ability of nurturing its own intellectual property development, alongside tapping into emerging vendor technologies, spanning cloud, security, storage, mobility, networking among others.

In short, the billion-dollar milestone is a result of a coordinated growth agenda has seen Datacom expand significantly to bring its customers the benefits of new technologies combined with scaling geographic and infrastructure reach.

During the past 12 months alone, this has been evident through the business claiming top partner honours for Microsoft, Intel Security, EMC, Cisco, Veritas, Dell, Hitachi Data Systems, Hewlett Packard Enterprise, Veeam and Symantec on both sides of the Tasman.

For Ladd, this emphasises the importance of partnering closely with the disruptors of the industry.

“You can’t beat an Amazon Web Services (AWS) or a Microsoft at their own game - we don’t try to; instead, we are very much part of their ecosystems,” he acknowledged.

“We can use the emerging disruptive technologies to change the way we do business and to help our customers along their journey to finding the best applications of the new technologies.”

Consequently, Ladd said this means Datacom operates within an “ecosystem of competing interests”, both externally and internally, around immensely complex systems.

With the company “prepared to take those calculated risks” to realise ongoing growth aspirations, Datacom will continue to challenge conventional business practices both locally and overseas.

“We have a deep understanding of our industry, and the challenges and dynamics our clients face,” Datacom Managing Director of A/NZ Systems, Greg Davidson, added.

“Because of this, we create greater organisational agility to ensure our clients have flexibility. We deliver solutions that increase capability, speed and efficiency, and deliver greater economies of scale through cost saving practices and improving efficiency and reliability of operations.”

In response to the changing requirements of the end-user, Davidson said Datacom brought the systems business together under one leadership team in June 2016.

“The changing environment our clients are operating in has focused us heavily on analytics, data-driven insights and mobile technology,” he explained. “By bringing our trans-Tasman operations closer together, we are able to react to the market faster and leverage our scale and size better for the benefit of our clients.”

Davidson said Datacom’s skill set allows the business to provide organisations with services in service management, service aggregation, application management, infrastructure management and all manner of cloud, network and security services.

As a result, SaaS and PaaS platforms continue to dominate Datacom’s agenda, an agenda bolstered through strong capabilities in the Dynamics 365 suite, alongside best of breed products such as Pega.

“We’ve seen huge growth in public cloud re-sale, some 400 per cent growth in Auckland and 200 per cent across A/NZ,” Davidson added.


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