​How Data#3 delivered 40 years of success

​How Data#3 delivered 40 years of success

From a Brisbane garage to the ASX, ARN charts the rise of one of Australia’s leading ICT providers.

Laurence Baynham - CEO and Managing Director, Data#3 (Photo - Maria Stefina)

Laurence Baynham - CEO and Managing Director, Data#3 (Photo - Maria Stefina)

“We started out as a typewriter reseller.”

Perhaps not the most obvious opening line to associate with the CEO and managing director of one of Australia’s leading technology providers, but in line with the age old adage - you've gotta start somewhere.

And start somewhere Data#3 did, surfacing from the suburbs of Brisbane, in a garage to be precise.

Mirroring the early days of Silicon Valley supremos such as Apple, Google and Hewlett Packard, the company history dates back to 1977.

Founded by Terry Powell and Graham Clark, as a new IT application software business, in 1984 Powell, Clark and Associates merged with Allbrand Typewriters & Office Machines Pty Ltd. to create Data#3 Limited.

Fast forward to 2017 and Data#3 is a different company.

Since listing on the ASX with a market capitalisation of $15 million in 1997, the value of the company today stands at $260 million, underpinned by over 1100 staff across 14 locations.

Delivering a 1700 per cent share holder return on investment during the past 20 years, Data#3 continues to fly the flag for homegrown innovation.

“Adapting to change is key to our success, alongside the right people with the right attitude,” Data#3 CEO and managing director Laurence Baynham told ARN. “We’re constantly changing because the industry is constantly changing.

"If we’re not one step ahead then we’re going to be left behind very quickly. From typewriters through to cloud shows the importance of adapting.”

Customer relations

Spanning consulting, project services, management services and resourcing, Data#3 specialises across key technology segments, including cloud, mobility, security and data analytics solutions.

Through providing end-to-end solution sets, the business continues to chalk up key customer wins nationwide, including a recent digital deployment at Sunshine Coast University Hospital, a cloud rollout at the Victoria State Emergency Services and a strategic services delivery for South Australia Water.

“The most important thing has been listening to our customers because they are demanding new things and shaping the market,” Baynham added.

“We need to be very close to our customers as they move, which highlights the importance of our relationships.

“Even today face-to-face engagement is still important in our eyes because customer relationships and understanding what they need to achieve in their business is absolutely critical. It was 40 years ago and it still is today.”

Despite holding an enviable customer base however, Baynham acknowledged that loyalty “only goes so far” in today’s demanding digital world.

“It’s not something that you can take for granted,” he said. “It’s like any relationship, you have have got to keep working at it. We see it time and time again and it’s one of the advantages of being around for 40 years, we’re in it for the long-term and customers actually see that.

“We may have gone through some bad patches with our customers but more than often we actually win deals back because we continue to knock on the door, we continue to improve our service and we’re trusted and depended upon.”

Despite being headquartered in Brisbane, the Data#3 logo is recognisable nationwide, through offices, data centres and configuration and warehousing facilities, creating a sense of stability for customers across all states and territories.

Such stability lends itself to success, as outlined through the company’s recent triple crowning at the ARN ICT Industry Awards.

As reported by ARN, Data#3 walked home with Channel Choice and Enterprise Partner awards in September 2016, with Baynham also inducted into the ARN Hall of Fame.

From a vendor perspective, the company was also honoured as standout HP, Cisco, Aruba Networks, EMC and VMware partners during 2016, alongside recognition for Hewlett Packard Enterprise, Microsoft, Symantec, IBM and Citrix to name but a few during the past 15 years.

“We’re seen as the yardstick in the industry,” Baynham added. “Customers will tend to test that as their right as customers, but one thing we absolutely stick by is that the customer relationship - even when decisions go against us - is paramount.

“Our 40-year history is a big differentiator as it demonstrates our continued stability and success in an ever-changing industry, and we look forward to adapting to the market opportunities for the next 40 years.”

Homegrown expertise

In taking home the Enterprise Partner crown at the ARN Awards for 10 years running, Data#3 continues to compete, and claim market share, from a host of global multi-nationals, emphasising the continued importance of a local touch.

“We enjoy competing, especially against the globals,” Baynham said. “We still think of ourselves as a small company and it’s part of our psyche.

“We’ve got partners that are global and we enjoy those relationships and there’s a really strong combination of both in terms of global service and delivery and local customer knowledge. That combination is really important and has been with us for years.”

When competing with multi-nationals, Baynham said Data#3 has an advantage through its ability to be agile and responsive.

“Customers are demanding solutions and decisions quicker and sometimes it’s harder for multi-nationals to meet those challenges,” he explained. “When I’m meeting with the CEO of a customer, and they want a decision on the spot, they get a decision on the spot with Data#3.”

On the flip side however, Baynham acknowledged that the technology space in Australia is changing at a rapid rate, due to the influx of start-ups and specialist players.

“This is an area of the market that we recognise and absolutely support,” Baynham said. “We also compete with this market and in some respects, what I’ve just described in terms of our engagement with multi-nationals, it’s somewhat similar with the smaller organisations that compete against us.

“That’s the challenge of business and what makes the IT industry a great place to operate in.”

In joining the business 23 years ago, Baynham has watched Data#3 evolve from a Queensland oriented office equipment and PC reseller into one of Australia’s leading providers.

Driven by ambitious goals, the business continues to build for the future, emphasised by its reported revenues of $983.2 million in FY16.

Continuing the trend, the business has delivered further increases in sustained earnings for the first half of the 2017 financial year, backed by continued cloud services growth.

As reported by ARN, for the six months ended 31 December 2016, Data#3 reported a 10.6 per cent rise in revenue, reaching $506 million with cloud-based revenues totalling $58 million.

With gross profit up 8.1 per cent to $74 million, product revenue also increased 11.5 per cent, hitting $413.9 million for 1H FY17.

“Each year we set ourselves pretty sizeable targets,” Baynham explained. “That’s part of our culture and a reason why we’re continuing to grow.

“Data#3 has a unique heritage and a culture that enables our customers to succeed in achieving their business objectives through innovative technology solutions, and Data#3 has become a brand that customers trust.

“As the company moves ahead – I look forward to working with our customers, partners, shareholders, community and, our people, to harness the power of people and technology for a better future.”

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