Netsurit, SA`s largest managed outsourced IT provider specialising in small and medium enterprises (SMEs), has merged with Cape Town-based Millennium Computer Services in a deal that forms part of a merger strategy that Netsurit has chosen to pursue.
The deal has benefits on both sides, with Netsurit now able to expand its existing reach in the Western Cape market, while Millennium - with Netsurit`s network and national reputation behind it - will now be able to take its business to the next level.
Endorsing the outsourcing principle as the most logical option for SMEs looking to optimise their IT investment, Netsurit utilises its position of strength in the market to enable SMEs to dramatically reduce costs. The company understands that historically, the technology needs of SMEs have been sorely neglected - often as a result of a poor understanding of what these businesses require from their technology network.
Netsurit opened its doors in the late 1990s and today has 160 dedicated, technically skilled employees serving approximately 160 clients in South Africa. The true measure of its success can be seen in the fact that the company has doubled its earnings year-on-year, reporting R60 million in annual turnover during the last financial year.
Millennium Computer Services, like Netsurit, was established some 11 years ago and has found its niche providing a range of services, including IT consultancy, network deployment, service and support and corporate Internet services, to the Western Cape corporate sector.
According to Netsurit`s CEO, Orrin Klopper, the reasoning behind the merger is that Netsurit aims to increase the size of both its client base and its share of the IT services market.
"This is just a first step for us and we have a clearly defined fast tracked path of corporate activity that we intend to pursue across both SA and into international markets. This acquisitive growth will also allow us to diversify into other solutions and services," he says.
"Our interest in Millennium Computer Services grew due to their success in building a great business in a market that is not always easy to flourish in, so I take my hat off to Millennium and state that we are proud to be a part of the same team."
Grenville Salmon, CFO at Netsurit, adds that the merger increases opportunities for both companies.
"For example, Millennium has several prestigious clients and by utilising their strong market presence in the region and coupling this with Netsurit`s national size and strong relations in Johannesburg, we anticipate being in a position to achieve major growth in the coming years."
He believes that both organisations can learn and benefit from one another.
"Millennium can benefit from the technically advanced IT servicing systems that Netsurit has, over time, developed in Johannesburg and in turn, Millennium now offers Netsurit a vastly improved infrastructure in Cape Town," he says.
"An important business strategy for Netsurit has always been acquiring and retaining the right people. Although we already have a great team of our own in Cape Town, until now they have not had the level of technical backup support that would enable them to operate in true Netsurit fashion.
"Teaming with Millennium has allowed us to overcome these difficulties. Millennium, like Netsurit, is an organisation that embraces the concepts of open robust communication and `having fun and being positive`, which is why this is a perfect fit," states Salmon.
According to Ian Dyamond, MD of Millennium, the company has reached a plateau in the Western Cape market that can only be overcome by taking the business to the next level and achieving a national footprint.
"Since Netsurit`s product and service offerings are very similar to our own, it has made the fit far easier than expected. It also allows our staff to be cross-trained on other platforms, and affords us Microsoft Gold Partner status. "Most importantly, this deal allows Millennium to compete at the level of the top five vendors in SA," he says.
Salmon insists this merger is only the first of many future corporate acquisitions for Netsurit, maintaining that the company has an eye on growing into other areas of the market, both nationally and internationally.
Share
