Menu
Lancom Group acquires Australian MSP Powernet's NZ business

Lancom Group acquires Australian MSP Powernet's NZ business

Lancom seeks to accelerate growth as MSP consolidation gathers pace

Waruna Kirimetiyawa (Lancom Group)

Waruna Kirimetiyawa (Lancom Group)

Credit: Lancom Group

Lancom Group has acquired the New Zealand arm of the managed service provider (MSP) business of Australian company Powernet.

Powernet, which earlier this year merged with Evolve IT and employs 100 people across A/NZ, is selling the NZ business, Powernet IT Consultants NZ, to concentrate more on the Australian market, said Lancom Group CEO Waruna Kirimetiyawa.

The business is being bought as a going concern, including goodwill, assets and customer base but not the brand. Powernet's local staff will join the combined group adding around 10 per cent to Lancom's capacity.

The buyout, Lancom's first, will add key staff, capability and reach, Kirimetiyawa said. Powernet brings with it more than 160 new customers.

“Most of these customers are typical managed services provider clients. Our opportunity is to offer our broader solution range, including Microsoft productivity applications, Azure and Amazon Web Services, and custom application development.”

Lancom is seeking rapid growth over the next five years, Kirimetiyawa said. Acquisitions can accelerate that on top of organic growth, which is tracking at around 35 per cent.

"We’re targeting acquisitions as the preferred mode for rapid expansion," he said. "At the same time, we’re growing organically through a focus on service excellence and providing solutions attractive to our client base."

The acquisition will provide a smooth transition for Powernet's company’s local customers, Kirimetiyawa said. 

The two companies are formalising a partnership to accommodate clients in their respective regions, with the view to extend each other’s capability and to provide continuity to Powernet’s NZ clients headquartered in Australia.

“That’s the biggest challenge with a deal of this nature. It falls to us to provide service continuity while making sure we remain relevant to our new customers," Kirimetiyawa said.

“While we’re an ICT company, this is still very much a people business, so we are investing time and effort into relationship building and understanding the technology needs of our customers."

Lancom has worked closely with its existing customer base, bringing them into the cloud as part of a modernisation drive, Kirimetiyawa says. 

“We’ve long recognised the advantages of software as a service and cloud architectures. That’s why we’ve brought our customer base along and they are seeing those advantages on a daily basis,” he said.

Many of the customers now coming on board are still traditionally architected. 

“We see an opportunity to help modernise, improve and deliver the cost and efficiency advantages associated with cloud technologies, specifically in infrastructure, collaboration and productivity. 

There are also substantial opportunities in automation and integration. So, while it is ‘business as usual’ from 1 July, we’ll be talking that through with our customer base in the coming months.”

Lancom is on the lookout for further acquisitions with a specific focus on managed services providers looking to become part of a larger organisation.

“Deep expertise in security, application development and systems integration is of interest, as is vertical specialisation.”

There was a massive consolidation in the MSP industry under way because many founders were getting older and seeking to retire, Kirimetiyawa said.

Often these companies were struggling with the pace of change in the industry and looking to cash out.

Kirimetiyawa said Lancom invests heavily in automation and hope to improve the efficiency margin of acquired businesses.

Lancom's business is in three parts with MSP being the largest at around 75 per cent. Custom software development is around 20 per cent while the final five per cent is attributable to a SaaS startup called DeskDirector, which services around 1000 local and international MSPs.



Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags powernetMSPs managed service provicersLancom

Featured

Slideshows

Reseller News Platinum Club celebrates leading partners in 2019

Reseller News Platinum Club celebrates leading partners in 2019

The leading players of the New Zealand channel came together to celebrate a year of achievement at the annual Reseller News Platinum Club lunch in Auckland. Following the Reseller News Innovation Awards, Platinum Club provides a platform to showcase the top performing partners and start-ups of the past 12 months.

Reseller News Platinum Club celebrates leading partners in 2019
Reseller News hosts alumnae breakfast for Women in ICT Awards

Reseller News hosts alumnae breakfast for Women in ICT Awards

Reseller News hosted its second annual alumnae breakfast for the Women in ICT Awards in New Zealand, designed to showcase the leading female leaders in the industry. Held at The Cordis in Auckland, attendees came together to hear inspiring keynotes and panel discussions, alongside high-level networking among peers. Photos by Gino Demeer.

Reseller News hosts alumnae breakfast for Women in ICT Awards
Reseller News Innovation Awards 2019: meet the winners

Reseller News Innovation Awards 2019: meet the winners

Reseller News honoured the standout players of the New Zealand channel in front of more than 480 technology leaders in Auckland on 23 October, recognising the achievements of top partners, emerging entrants and innovative start-ups.

Reseller News Innovation Awards 2019: meet the winners
Show Comments