What’s in a name? The ramifications of Dimension Data’s rebrand to NTT
- 07 July, 2019 17:59
As Juliet famously remarked, a rose will still as sweet smell regardless of its name. But in the words of fellow Shakespearean creation Othello, and incidentally Taylor Swift, reputation means a lot in the world of business, and no less so in the IT channel.
As such, while NTT’s decision to finally axe the name of Dimension Data may have come as no surprise, it nevertheless sent a rumble through the industry.
After all, since its formation in South Africa 36 years ago, Dimension Data has gone on to become one of the channel community’s biggest heavyweights, bringing the likes of Microsoft, Cisco, Oracle and SAP to four corners of the globe.
And now from October 1, the name of the invoice will now be NTT, a move that while inevitable nevertheless still strikes Tech Research Asia executive analyst Mark Iles as “odd”.
“The brand is very well known and even has some global reach and has been established for a long time in the Australian market,” he told ARN.
The question a business really needs to ask is what is the impetus to change.
“A change of brand is a large and costly exercise to undertake so there needs to be a clear rationale for the change. Usually, the driver is a significant change of company strategy and to emphasise the change a decision is taken to start ‘afresh’ and be able to better control consumer or business sentiment and understanding of the brand," he said.
In the case of NTT, the obliteration of the name Dimension Data has less to do with starting “afresh” and more a way to cement its own place as a global powerhouse.
A simple, three-letter name now gives way to a $11-billion-dollar business covering data centres, application and IT services, managed security, research and development, cloud and system integration under one roof.
Boasting 40,000 staff across more than 70 countries, NTT has a lot at its fingertips. As Telsyte analyst Alvin Lee reminded, Dimension Data may be a big name in Australia, but NTT’s branding carries a lot of weight elsewhere in the region.
“Brand perception and recognition and communicating the business changes will be the key challenges involved changing a company’s name,” he said. “Globally, especially in Asia Pacific, NTT is a well-established and recognised brand which should help mitigate some of the challenges around these.”
Whether it will have an impact on Dimension Data’s business remains to be seen, Lee added.
“There are other strategic factors involved that would also attribute to how a company performs after it changed its name, often playing a much bigger role in the company’s success. Strategies involving products and services, target markets, solutions and channel partners are all critical success factors.”
Jay McBain, a principal analyst for global channels at Forrester, likewise argued the loss of the Dimension Data name should not have a significant long-term impact. While name changes can be risky and cause customer uncertainty in some cases, the majority of time they don’t impact the near-term revenue or long-term viability of a company, he said.
But for Iles, setting the sun on the Dimension Data branding fails to do justice to such a valuable brand asset, even one bought almost a decade ago.
“The real power of the acquisition should be to leverage the best parts of both organisations – the reach and brand awareness of Dimension data complemented with an additional set of services and solutions now available thanks to the broader NTT business,” he argued.
“The trend these days in technology is to leverage brands where there is an association with a specific skill or offering so increasingly we are seeing acquisitions where the acquiring company is kept largely intact and the brand left alone.
“An example of this is Kloud who were acquired by Telstra, but the brand remains as it’s reasonably well established and known for its skills in cloud.”
When considering any name change, it’s essential to consider whether this is just a sticking plaster solution to a bad business set-up, argued Iles.
“Ultimately, changing a name doesn’t help if your business strategy isn’t sound – just ask Research in Motion (RIM) who changed their name to Blackberry,” he said. Pricewaterhouse Coopers meanwhile was responsible for a few classics of its own, the first being its own name-change to ‘Monday’, a name they soon dropped.
“They also bought Booz & Company (Booz Allen Hamilton), a well-known business strategy company and decided to rename that to ‘Strategy&’,” explains Iles. “I bet if you ask people today if they have heard of Strategy& most will say no, but I bet more people know who Booz & company are still.”
That isn’t to say, Iles concurred, that a name change is always a bad idea from the get-go. Some may be surprised to know that the original name of Google was ‘Backrub’ — the less said about that the better perhaps. Meanwhile, a number of tobacco companies have changed names as they have diversified, added Iles but that is largely to avoid ongoing negative public sentiment.
McBain himself bore witness to one of the IT industry’s most notable name changes, working at IBM when Lenovo acquired its PC company in 2004.
“The plan was to change the branding from IBM to Lenovo over a five-year period, but it was accelerated after only 18 months,” he reminisced. “The fears of losing the ‘IBM name’ quickly subsided when the branding team sponsored the Olympics and Formula 1 and started a new branding journey for the company that wasn’t linked to 100 years of history.”
“Less than a year after this, Lenovo edged out Dell and HP to become the #1 PC company in the world.”