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Cautious optimism for Asia Pacific business: Dimension Data

AvantiKumar | May 30, 2012
Cloud-driven data centre services, such as storage, are among the healthiest sectors, said Dimension Data's top executives during a recent analyst conference in London.

Bill Padfield - CEO, Dimension Data Asia Pacific

PHOTO - Bill Padfield - CEO, Dimension Data Asia Pacific.




While global ICT systems provider Dimension Data achieved significant revenue growth of 22 percent for financial year 2011, the company expressed cautious optimism for the coming year in the Asia Pacific region in the light of global economic difficulties.

Speaking during the Dimension Data Perspectives 2012 analyst conference in London, mid-May 2012, Dimension Data Asia Pacific chief executive officer Bill Padfield said the healthy growth in Asia Pacific could decelerate due to the deepening Eurozone crisis and slow U.S. recovery. "In addition, Japan's economy is expected to contract but is being kept afloat by reconstruction activities. There are signs that growth in China may be slowing, while India's growth is hampered by rising inflation, and Australia is experiencing increasing unemployment."

Padfield said the company's main vertical sectors, which include financial services, manufacturing, media & communications, and travel & transportation, showed healthy growth in the past 12 months.  "The fastest growing vertical is manufacturing in Southeast Asia, including China, and this vertical may be the largest vertical by the end of the year. In addition, the converged communications sector is maintaining its growth rate due to equipment replacement cycles in this region."

Another reason for optimism is that spending is being driven by technologies such as cloud computing, mobility, BYOD (bring your own device) and ITO (IT outsourcing). "Mobility and BYOD trends are driving companies to ask for help with managing multiple devices as well as creating in-house app stores. 'In addition, six data centres opened in India in Faridabad, Ludhiana, Ghaziabad, Ahmedabad, Jaipur, and Mumbai."

Dimension Data Australia's chief executive officer Rodd Cunico said the public sector was the largest sector for the company. "Dimension Data has the largest security practice of any organisation in Australia while the services business has grown to 43 percent against 57 percent."

Now wholly owned by NTT Group, ICT solutions provider and systems integrator Dimension Data recorded revenues of US$5.8 billion and has more than 14,000 employees in 49 countries serving more than 6,000 clients across industry sectors.

Global perspective

As part of his global perspective, Dimension Data global chief executive officer, Brett Dawson, said: "Global revenues were up 22 percent with operating profit of 21 percent last year, and has gained extensive experience in emerging markets where it has also experienced significant growth in revenues."

For the first half of the financial year 2012, the company has increased its investment in acquisitions to the tune of US$180 million in order to accelerate strategic positioning, said Dawson. "Also in the first half of financial year 2012, the fastest growth was in data centre and storage (31 percent) with double digit growth in converged communications and security. In Asia, we have strong performance with 11 percent growth while Europe has recorded exceptional performance of 20 percent."

"Factors such as the uncertainty in the macro-economic environment, political changes, we see opportunities for aggressive acceleration of our competitive position," said Dawson, adding that the company, which was started in South Africa about 30 years ago, has very low staff turnover due to its culture of appreciating that its people make the difference. "Our business model as an ICT system integrator is built on the quality and depth of our services: We take our clients on an evolutionary journey."

In his welcome note, Dimension Data chairman Jeremy Ord commented that since the recent merger with Japan's NTT Group, the culture of Dimension Data has remained unchanged and the company has focused on opening up new opportunities, especially cloud-driven services. "Everybody is talking about cloud computing though few people actually understand cloud computing: We have to educate the market to some extent."

Ord said that ICT was transitioning to become a service. "A consumption-based model, and in the new markets, we want to manage the communication process as a carrier-neutral provider. The second key for us is to enhance our cloud services solutions."

Dimension Data chief operating officer Jason Goodall said the company's business model was rapidly changing, driven by client requirements. "Manufacturing is the biggest vertical (28 percent) for us, while the three key areas that are fundamentally changing our business model are managed services, cloud services and IT outsourcing."

"This means the next step is to move into the world of cloud services and to automate our business model across all geographies," said Goodall, adding that the company's own five-year IT transformation programme started in 2010.
 

 Cloud computing and global services

Dimension Data Cloud Solutions chief executive officer Steve Nola said Dimension Data Cloud Platform would help businesses cope with the increasing pressure of the globalised market. "The increased level of expectations on IT departments from the business, exacerbated by the demands of the new generation of IT savvy workers used to social networking and mobile devices means that information must be delivered regardless of device. IT has to be a service [the cloud]."

"There is an increasing shift to a service oriented approach that allows for flexible consumption of ICT by organisations while maintaining a smoother delivery of information," said Nola.

"Value for money, predictability of performance, 'fit for purpose' and ease of use are some of the qualities that should drive IT as a service," he said. "This will also reduce the complexity of IT that CIOs need to deal while managing security and risk management concerns."

"Flat or reduced IT budgets demand a higher level of automation and customisation; it is about cost optimisation while increasing strategic agility for a business," said Nola. "Our cloud consulting services also helps companies to address security and compliance requirements."

"Cloud computing is one of the biggest disruptions in the market," he said. "It is disrupting software, hardware and communications. This means the market for cloud in the coming five years will be significant. There will also be a change and focus of skills required in the future, especially in the IT department. All of these changes will mean a journey over time."

Nola said Dimension Data was building its experience in managed cloud services along with the acquisition of companies such as Bluefire. "This has helped to build a global cloud services unit in the company with components from partners such as Microsoft, Red Hat, Dell, Cisco, EMC and VMware. During the last six months, we have been rolling out a global flexible cloud service, which is now available in 52 countries."


 Architecting infrastructure

Dimension Data group general manager- network integration, Jeff Jack said that architecting network infrastructure remains as a core business for the company. "Virtualisation is driving strong growth across the globe. As a network integrator, we manage more than US$25 billion worth of IT assets globally 24x7x365."

"We have the advantage of geographic coverage with our staffing on the ground across the globe who can speak to our customers in the language of their choice," said Jack. "Our engagement includes business conversations with the customer as well as providing the technical skills."

"Asia is strong growth area for the company," he said. "There is increasing focus on services, including asset tracking to help manage device sprawl, expanded multivendor support strategies, and availability monitoring. The 'industrialisation' of our ITO (IT outsourcing) offerings helps to enhance our delivery. Another driver is the migration to the 802.11n standard to achieve better coverage and capacity of the wireless network."

 

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