Melbourne IT spends up on systems

Domain name and hosting specialist Melbourne IT today unveiled plans to embark on a year-long major technology refresh project, targeting everything from its accounting, billing and provisioning systems to its storage network and data centre.

MelbourneIT CEO Theo Hnarakis
(Credit:MelbourneIT)

In the next twelve months, the domain name and web hosting company will spend some $5 million updating its billing and provisioning systems and $200,000 on a new business intelligence system to help manage its growth into new markets.

In the past year, the company has spent around $3.5 million on a new storage network and $500,000 on racks and networks for a new data centre facility in Brisbane, and over $1 million standardising its international operations on Microsoft's Great Plains accounting software.

"Over the last two to three years, we have taken a very focused approach to how we refresh our systems and infrastructure. We need to invest to allow us to scale, to sell and provision new services efficiently," Melbourne IT CEO Theo Hnarakis said upon reporting solid revenue and profit growth for the first half of the company's fiscal year this morning.

The $5 million investment in new billing and provisioning systems is the tail-end of a three-year effort to merge the operations of the company's largest two business units — its Melbourne-based domain name business and the WebCentral Brisbane-based web hosting business acquired in May 2006.

The two systems were built on very different models, Melbourne IT chief technology officer Bruce Tonkin told ZDNet.com.au today.

"The billing model for domain names is generally annual or multi-year billing, while the billing model for hosting is usually a subscription-based model, a per-month model," he said.

"We need a system that is far more flexible and granular — a system that can support, for example, usage billing or hourly billing. In that sense, we're becoming more like a telco," he said.

The company will thus spend some $5 million building a billing and provisioning platform via the re-use of components from existing systems and the customisation of some new off-the-shelf components, said Melbourne IT CIO Guye Engel.

The company is also in the throes of choosing a BI software platform from several undisclosed vendors — the successful firm to be chosen within the month.

"We have a very basic data warehouse capability already," said Engel, "but we aim to give management better decision-making tools across all of the business divisions or even down to how individual products are faring. It will be a level beyond what our current data warehouse can do."

Melbourne IT's spate of acquisitions at home and abroad had led to opportunities for cross-selling, said Tonkin, but its systems' current capability was "limited in terms of identifying opportunities for cross-selling products. The [BI system] will better enable us to realise those opportunities."

Investments in these new systems were expected to aid the company in improving on the solid financial results posted for the half year to June 30, 2008.

The company posted half-year revenues of $86.7 million, up 12 per cent over the corresponding period last year, and net profit of $7.8 million, up twenty per cent. The company expects to "outperform" on these results in the second half of FY08.

Engel said Melbourne IT's board and CEO had been very supportive of investments in new infrastructure, increasing IT budgets consistently since 2006. "They see good scalable IT platforms as key to our success," he said.

Melbourne IT is already reaping the rewards, for example, from its investment in storage virtualisation.

"We have many hundreds of terabytes under management, and data storage is growing markedly with the types of media people are sending and saving," Engel said. "The virtualisation piece has been very good. We can double the storage we can provision using the same amount of staff."

"Hosting companies grow and then hit barriers," said Tonkin. "You get the systems to make a million dollars, then your next barrier is ten million, then your next barrier is $100 million. We want to build the system that meets our needs when we are a billion dollar company."