“There’s two ways to grow,” explains Ian Forrester, Managing Director, Plan B. “Organically or by acquisition.”
Speaking exclusively to Reseller News as the ink dries on Plan B’s recent acquisition of ICONZ, Forrester’s plan for the business continuity provider involves a mix of the two, as he builds on the company’s growing portfolio of cloud, networking and datacentre services.
“We’re very focused on what we’re doing and that’s divided into clear verticals,” says Forrester, who completed the acquisition on February 1, 2016. “Firstly, we committed to our core business continuity services that we’ve always provided, this remains a fundamental part of our set-up and includes backup, replication, standby equipment and standby offices.
“But to support this business we now have data communications, which is essentially telecommunications - divided into WAN, LAN and network security and with that comes internet and hosted PBX.
“The next one is infrastructure, covering colocation and hosted infrastructure which together provides the platform that every business needs to manage and deliver their business.”
As a founding Internet Service Provider in New Zealand - emerging in the market in 1992 - ICONZ represents a natural progression for Plan B according to Forrester, which follows the company’s acquisition of voice, video and data network provider Turnstone in April 2015 and Disaster Recovery Group (DRG) in April 2014.
ICONZ's cloud offers enterprise grade computing power, operating in the local market as a managed services provider with solutions in backup, disaster recovery, security and monitoring.
As Forrester explains, key services include cloud and colocation, with the Auckland-based company servicing organisations at both enterprise and small to medium levels.
“ICONZ is a founding ISP and has built that business up, before getting into the data centre space and then the colocation and hosted infrastructure market,” he adds.
“Through ICONZ we’ll naturally have a smaller focus leading up to the medium corporate space and we can build that into a very significant platform.”
With Plan B’s core focus nestled within the medium corporate enterprise space, Forrester says the acquisition will provide additional scale across the new merged business, including access to a national data centre network of over 300 racks, and opportunities for both customer sets to access a broad range of complementary services.
“We’re always looking at a combination of organic growth or growth by acquisition,” he adds. “We’re a very cash generating business and have strong cash flows that have been built up over an extended period of time, which means we’re well positioned to capitalise on any market opportunities that arise.
“Rather than pay out cash to shareholders and stay the same, we’d rather re-invest in the business.”
Forrester says that while Plan B - who launched a world-first innovation in cloud archive-as-a-service technology with Panasonic in November - is a business continuity company, the world of business continuity as the industry knows it has changed, leading to a need to broaden the company’s range of services to customers.
“The industry I bought into back in late 2007 is significantly different to the industry today,” he says. “The introduction of Ultra-Fast Broadband and data communications has meant that customers now have more options than ever before, whether that is owning infrastructure on-premise, using a combination of private and public cloud or hosting their own infrastructure in a colocation facility.
“By having date centres around the country, we now have the ability to colocate, backup and replicate to other data centres for continuity purposes.”
For Forrester, cloud backup continues to be the “single largest revenue stream” for Plan B, with the company sitting on a “rapidly growing business” within the cloud computing space.
“We’ve got a significant data centre network through our own data centres and the dark fibre we have in other of big data centres across the country. This, combined with the ICONZ deal, gives us an opportunity to provide customers with the best of everything.”
Plan B's acquisitions follows a busy few years under Forrester's stewardship, with two acquisitions, the opening of a new data centre in Wellington and the rebranding of its colocation services, culminating in the company's crowning at the 2015 Reseller News ICT Industry Awards last year, as the Service Provider of the Year.
New Zealand market
Headquartered on Auckland’s North Shore, Plan B has facilities in Auckland’s Mount Wellington and Albany suburbs, alongside Hamilton, Wellington and Christchurch and is privately owned by New Zealand-domiciled shareholders.
With reinvestment part of the company’s DNA during the past few years, Forrester believes Plan B’s willingness to spend is reflective of the wider market in New Zealand.
“Companies are being forced to buy,” he observes. “Some will ultimately go out of business and we’ve seen that happen as companies try too hard to grow quickly, and struggle to fund that growth.”
In observing the market, Forrester believes the Tier 2 service provider in New Zealand has undergone a “massive transformation” during the past few years.
Looking back to the turn of the century, when then Telecom purchased Gen-i, consolidation has heightened with Spark then acquiring Revera, AppServ and Computer Concepts Limited and Vodafone subsequently acquiring TelstraClear and WorldxChange - to name but a few.
“It’s very clear what’s happening,” Forrester adds. “The days of selling large infrastructure and managed services to implement big projects are gone. While there is consolidation happening it’s getting really hard to grow organically when your business model is changing.
“Instead of getting a million dollars in revenue this year, you’ll get it over three years so how do you change that? It’s becoming really hard to change your business model and your psyche.
“But that’s always been our business model and at present, I’d say we were the biggest Tier 2 provider in the country. Given our size and where we are right now, we’re up there as a top Tier 2 hosted infrastructure provider in New Zealand.