Taking on 'big data' challenge
"We're on the cusp of something quite interesting," said Datacom Group chief executive Jonathan Ladd.
That something is big data and how businesses can use it to fuel their growth.
When it comes to phases in computing, the most recent has been transactional efficiency - how to do business with fewer people, faster and with more accurate results.
According to Ladd, the next phase is the ability to manipulate massive amounts of data at a fraction of the cost of the past and deliver relevant information to companies in real time to any device - the personal computer, tablet or smartphone.
Big data refers to the vast amounts of consumer information that can be gathered from a multitude of sources including social media, customer feedback and transaction histories online. Gathering the information is one step; making sense of what it all means is another. And that data analytics is what Ladd sees as a big growth area in coming years for Datacom, one of the country's oldest and biggest IT services firms, and other such companies.
"The confluence of all this is the next phase of benefits you can get from IT and it will enable people to make better decisions," he said.
One example Ladd cited would be the operator of a power turbine that normally ran it until it hit the red zone and then stopped because they didn't want to blow it up. But if it was a hot day with maximum power being consumed from the grid to keep air conditioners going, the spot price for electricity would be effectively going through the roof. If the turbine operator could run it for longer - even into the red zone - they could make a lot of money providing they didn't risk damaging the expensive turbine.
Big data analytics delivered in real time to that operator would allow them to consider things such as how that turbine had performed in similar conditions at similar times of the day around the world, the maintenance history of the particular turbine, and examples of where it had been run in the red zone and for how long before it needed to stop. "That information would be worth a lot of money to you and gives you the ability to crunch that data and make real-time decisions," Ladd said.
One of the big issues around big data though was identity security and people's concerns around how their data was protected. Ladd said the New Zealand government had taken a leadership role in this space with the government identity service, Real Me, which launched earlier this year. New Zealand hasn't yet reached the stage of having a single logon and password for all secure online services delivered by public sector organisations but was working towards that.
Datacom wants to become something of a one-stop-shop with its spread of services including cyber security, cloud computing, software and integration, IT management, and business processes such as payroll.
The private company is 52 per cent owned by Evander Management, controlled by the Holdsworth family. Its second biggest shareholder is the New Zealand Super Fund with a 37 per cent stake after it bought a 35 per cent share off New Zealand Post earlier this year.
Datacom posted a $36 million net profit after tax for the year ending March, 42 per cent up on the previous year, and also showed strong revenue growth up 10 per cent to $870m. Ladd is confident it will achieve a similar revenue growth rate for this financial year although profit will be inflated by the one-off $25m sale of its Asian call centre operations in April.
Beyond beefing up its data analytics team, the company has recently set up a Solutions division, tasked with developing and taking to market solutions for key vertical industries and functional areas. That will include Datacom's own IP and that of industry partners.
Only half of its revenue is now New Zealand-based and Ladd said Datacom's other big thrust for 2014 will be expanding its operations in Malaysia where it currently has around 110 staff. It not only has customers in that market but also uses Malaysia and the Philippines where the cost of labour is cheaper, to service customers in North and South America, Europe, other parts of Asia, and some in Australia.
Ladd said industry analysts had identified a gap in the Asian market between the big global players and the smaller locally grown boutique operators.
"It's that gap we aim to push ourselves into in the Malaysian domestic market," Ladd said. "We're already there and know the market and have some substantial relationships, so it's a good market for us to be in."
Sunday Star Times