​How Datacom cracked a billion dollars

​How Datacom cracked a billion dollars

Reseller News examines the books of New Zealand’s largest IT services provider.

Jonathan Ladd - CEO, Datacom Group

Jonathan Ladd - CEO, Datacom Group

“By building on our real-world cloud experiences and our existing strengths, we want to be recognised as the enterprise grade leader of hybrid cloud managed services in A/NZ.

“We’ll actively seek to disrupt ourselves by offering our clients hybrid cloud options to ensure they stay at the forefront of what is possible now and into the future.”

Davidson said the company also enjoyed “significant wins across the managed services space, enabling the company to bring hybrid cloud best practices to customers.

“Having good strength in both our software and infrastructure services business has provided us with the opportunity for pull through both ways, which is a strong differentiator for us,” he explained.

In looking ahead to the next three years, Davidson said the focus will remain on continuing to add networking solutions to the company’s as-a-service catalogue, while integrating security initiatives into networking lines of business.

“We want to drive down telco costs for our clients by aggregating A/NZ spend and increasing hybrid cloud adoption by leveraging national networks and secure high speed public cloud connections,” he added.

“Our size and the market potential has ensured good engagement with both AWS and Microsoft. The insights we have and the strength of these partnerships mean we can bring unified propositions to our clients.”

New Zealand

With more than 14.3 per cent of the $3.2 billion IT services market share in New Zealand, Datacom is the country’s largest IT services organisation, as ranked by IDC Analysis, and is scaling fast up the ranks in Australia.

From a Kiwi standpoint however, the systems business, which generates a “significant percentage” of the Group’s revenue and profits, continued its steady growth trajectory established over the past 10 years.

“The marketplace is one of constant change, which reflects into customer demand and despite being one of the dominant suppliers of IT services in New Zealand ceaselessly, Datacom endeavours to remain responsive and agile in modifying its services to meet these changes,” Datacom Group Chairman, Craig Boyce, said.

“This has been reflected in new business wins in both the commercial and public sectors and through continued support from our large customer base.”

Boyce said Datacom in New Zealand, driven by marketplace demand for DevOps, integrated infrastructure and software services, merged its IT management division and systems and integration software division to form a more agile, integrated systems business nationally.

“This assists in presenting to its customers a united front for the vast array of Datacom services and it has found market approval in the big Auckland and Wellington markets in particular,” he explained.

“Auckland is seeing significant growth in hybrid cloud services, security consulting and new forms of outsourcing.

“Larger client organisations are demanding more from their IT providers and this provides Datacom with both opportunities and challenges in scaling to provide such services in the fast-moving Auckland marketplace.”

Spanning both Australia and New Zealand, Boyce said Datacom’s network of 12 data centres continues to perform to an “exceptional standard”.

Jonathan Ladd - CEO, Datacom Group
Jonathan Ladd - CEO, Datacom Group

In March, Datacom installed its 1,460th rack into its New Zealand network, more than tripling the number of racks the company had when the Orbit Data Centre in Auckland opened in 2009.

Over the year, capital expenditure was also applied to significant tier and space expansions at the Kapua (Hamilton), Auckland Orbit, Abel (Wellington) and Gloucester (Christchurch) data centre facilities to meet increased customer demand for secure hosting.

Meanwhile in Wellington, Datacom continues to deliver hosting and support into many government departments and agencies, in direct reference to the company’s positions on the New Zealand Government’s Telecommunications as a Service (TaaS) panels.

Datacom in the South Island enjoyed a record year with Christchurch and Nelson performing well on opportunities in the company’s industrial mobility practice.

“During the year, Datacom South Island was globally recognised as a leader in the move towards Microsoft’s Hyper-V converged platforms designed for the SMB sector,” Boyce added.

“The Midlands region in New Zealand is experiencing strong growth also, adding 40 people over the course of the year and opening a Taranaki office.”

From a technology standpoint, Boyce said significant progression within the cyber security market is providing a “solid growth trajectory” for Datacom across both Australia and New Zealand.

“Datacom’s specialist cyber practice, DTSS, has also delivered excellent growth on the back of its investment in a Cyber Security Incident Response Centre (CSIRC),” Joyce explained.

“This purpose-built facility is located in Canberra and uses state-of-the-art technology to advise clients of security concerns within their environment.”


Across the Tasman, Boyce said the Australia Systems “weathered patchy economic conditions” to deliver growth driven by customer demand for hybrid cloud services and new software offerings, and by a number of significant wins with medium-to-large enterprises and State and Federal Government.

“Third-party products sales have continued to perform well during the year,” Joyce added.

“The push of Datacom’s software development operations into the Australian market continued with increased delivery capabilities in both Melbourne and Sydney and many new customers being won.

“Starting from scratch a few years back, this operation is a self-sustaining customer base and provides Datacom with real growth opportunities in the wider Australian market.”

After adding 565 staff to the business during 2016, Joyce said the attraction of retention of talent remains a constant area of focus for the business.

In the year ending 31 March 2016 employee numbers totalled 4,661, an increase of 13.8 per cent.

Growth in Australia, Malaysia and the Philippines is demonstrated with a significant increase in staff numbers, up to 1,932 which is 34.2 per cent of growth on the previous year at 1,440.

In New Zealand, the number of people employed reached 2,729 - up by 2.8 per cent on the previous year.

“Datacom is fortunate to have a highly talented, diverse workforce committed to being the first and fastest to translate new technological happenings for the benefit of the company’s broad public and private-sector customer base,” Boyce added.

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