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DiData boosts its game plan

 

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On the back of strong revenue growth last year, Dimension Data will counter the effects of the global economic crisis by aggressively expanding and driving its services into Africa and the Middle East.

This was announced this week at Dimension Data Perspectives, its annual conference, at Sun City.

The conference, which hosted international delegates, provided insight into technology trends and market influences, as well as updates on DiData`s strategy and expansion into the emerging markets of Middle East, Africa, Asia and Latin America.

High expectations

In the last financial year, DiData showed strong revenue growth of 19.5%, amounting to $4.5 billion in revenue, despite its turbulent financial history.

Jeremy Ord, DiData executive chairman, says that, despite the current fragile economic climate, the company will continue to be bullish, in the medium- to long-term, on the opportunities throughout Asia and India.

"During the downturn of the early 2000s, the IT bubble burst on an industry that had over-promised and under-delivered. It was a difficult time for us; but - not only did we weather the storm - we emerged stronger. Our business model is now exponentially more mature, robust and sustainable because of the challenges we had to face."

The company announced the completion of its acquisition of the remaining 44.9% stake in Datacraft, which it has partnered with for 11 years. In addition, the company`s financial results showed Internet Solutions and Plessey in Middle East and Africa, and Express Data in Australia generated strong growth, contributing 23% of the company`s annual revenue.

The systems integration business remains the biggest growth generator, accounting for 77% of revenue.

Stormy times

DiData has endured turbulent times during the past few years. In the US, the company recorded a 7% headcount reduction. To weather the economic storm, the company has set its business objectives to become more service- and value-focused, rather than product-oriented. According to CEO Brett Dawson, differentiation is critical to capture significant market share.

Grant Bodley, GM of DiData Middle East and Africa, says another area to potentially counter the impact of an economic downturn is the adoption of newer technologies, such as virtualisation.

"Belt-tightening will actually drive faster migration to innovative new technology solutions and related acquisition models, such as hosted virtualisation services, hardware as a service, software as a service, IP-based telecommunications, and enterprise Web 2.0 applications," says Bodley.

Dawson says DiData will prioritise its client services. "The global crisis of confidence, which started in the financial markets, is now undermining demand in most industries. Within this environment, we expect the IT infrastructure market to be slower in general and that we will be affected accordingly.

"We have tightened our investment and expenditure programme to match our view of short-term market conditions, and will continue to re-evaluate and adjust these on an ongoing basis. Our focus over the next six months will be on securing opportunities available in the market. We will balance this with a prudent expenditure and investment profile and tight cash management.

"The strength of the group`s balance sheet, our market-leading positioning and offerings, and our expansive geographic footprint provide us with confidence that we will successfully endure this market downturn and emerge in an enhanced competitive position."

Gearing for change

Dawson believes the IT industry, which is facing cash constraints, is seeing a lot of standardisation and consolidation in the IT market and that businesses are cutting down on their service partners and suppliers to reduce costs.

The global economic downturn is forcing companies to diverge from nice-to-have technologies, and companies are rather opting for need-to-have technologies with a service-driven approach, while strengthening key partner and customer relationships.

"We are seeing our clients having to be far more cost-conscious and are looking to improve productivity and efficiency," says Dawson. "Businesses with large global footprints are seeing a lot of pain in their business models and are trying to defer as much as they can in cost reduction."

Dawson points out that, while the first quarter is, on average, the lowest point in DiData`s revenue cycle, he is optimistic for 2009 as the company`s profit from services has leaped ahead of its product growth.

"Our business model is unwavering. We will play the cards that are dealt to us and we will play to win."

 

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