The top men at two of Australia's leading network services providers -- Steve Nola, Managing Director, Dimension Data, and Grant Ellison, Managing Director, Vanco Australasia -- go head to head.
Nola: While Vanco is described as a leading global virtual network operator (VNO), it is probably safe to say that you are not that widely known in Australia. When did you establish a presence here, and what are the main services you provide to the ANZ market?
Ellison: Vanco Australasia provides managed network services (including the provision of convergence, hosting, and network security solutions) to large corporations. Approximately 300 companies across Australasia fit our model well and we are focusing on engaging directly with those organisations as opposed to following a broadly targeted middle-market strategy. Accordingly, there isn't actually a requirement for us to be "widely known" although the clamour to understand more about the positive disruptive influence of our business model has ensured significant increase in awareness of the brand.
As with all of our markets globally (we are now delivering managed network services to multi-national corporations in more than 120 countries) our growth in Australia and New Zealand was customer led. We commenced delivering services in this region in the late 1990s and we are now serving a significant number of large corporate customers such as Lend Lease, Accor, O'Brien Glass, and SGS, with extensive international and domestic requirements across Australasia, each of which has a tailored technical and services solution.
Ellison:
With recent acquisitions such as KAZ and Gen-i, what are your views on companies like Telstra and Telecom NZ pushing into the systems integrator space?
Nola:
I see this as a natural extension for the telcos, as margins have become really tight in their traditional voice services space. The telcos have been moving into data services, and now into convergent technologies, which require them to adopt a new range of integration skills and offerings. One of the quickest ways to do this is through both acquisition and partnership. As a systems integrator, there is an element of competition for Dimension Data, but also great partnership opportunities too.
|
Nola: As a VNO, you stress that the biggest savings are coming from smart contract negotiations through Vanco with the incumbent service providers like Telstra and Optus. Why can't clients negotiate these contracts themselves?
Ellison: Procurement of telecoms infrastructure is one of Vanco's core competencies and is central to our ongoing global growth. Vanco grew 43 percent last year. Very few corporations can apply the focus, technical and commercial expertise, and resources that Vanco brings to bear in managing carrier relationships. We position ourselves as a route to market for traditional Asset Based Carriers (ABCs) as opposed to a true competitor (ie, we do not build our own network infrastructure for resale in direct competition with these infrastructure based businesses). As such, we are able to work transparently with our suppliers to identify the "sweet spots" where they genuinely have best-of-breed infrastructure or the appropriate technology to meet our clients' business needs. The upside for our suppliers is clear.
Ellison: Do you feel traditional ABCs will be successful in the systems integrator space? Why or why not?
Nola: Traditional ABCs will be successful, dependent on a number of factors. First, they must have an acquisition strategy whereby they make the right choices on who to acquire and also how well they integrate these entities. Second, their partnering strategy is very important. Those who are open to partnering will be more successful. Third, in the Australian market a lot depends on the ABCs' parent entities, either government or private, and the decisions they make on the direction of their Australian arms.
Nola: When Vanco first set up in Australia, did anything surprise you about the market?
Ellison: Probably the extent to which Telstra has historically been able to dominate the market with things such as the bundling of voice, data, and mobile whole-of-business agreements. Generally there is no commercial benefit for end users versus sourcing best of breed, and in many markets this practice is illegal as it tends to encourage predatory or anti-competitive pricing.
In addition, the prevalence of usage-based charging for DSL services surprised me.
