A New Perspective - Dimension Data's Analyst Conference
In Boston this week, Dimension Data hosted about 40 industry analysts at their Perspectives 2011 conference. Let me say that I was impressed with the openness and candor of the Dimension Data representatives, from the Chairman, the CEO, and on down. And speaking of CEOs, I can't remember the last time a CEO attended the various breakout sessions to hear what the analysts had to say and ask, and make himself so available to the analysts throughout the conference. It was extremely refreshing.
The conference kicked off with Dimension Data's Executive Chairman Jeremy Ord discuss the NTT acquisition and the impact (or lack of impact) on the Dimension Data brand. He also mentioned that the employee retention rates have been excellent since the deal. Ord noted that while there has been a learning curve, NTT listened to and addressed all of Dimension Data's concerns. The company is now working with NTT in several ways - sales (cross selling), solution development (joint solutions such as UC as a service for NTT and DiData to market together), procurement (how to use NTT’s muscle to improve Dimension Data’s supply chain), and operations (to offer clients seamless end to end service).
What most impressed me throughout the conference was the emphasis on Dimension Data's people - the value that the company places on its employees was evident and reiterated by Ord, CEO Brett Dawson, and many others, including the customers who presented. We heard several times how DiData is focused on its people and how this is infused throughout their business. You have to respect a company that values its employees so much.
Dawson explained how the company grew from its roots as a South African technology reseller, and how it became more internationalized after apartheid when more companies like Cisco were willing to work with them (kudos to John Chambers who wouldn't work with the company until after apartheid). As the company grew, it expanded from selling products to servicing customers, and service is now a major part of the company. Dawson noted, “Our focus is around communications first and foremost.”
It's clear that the company is no longer an infrastructure supplier and is now a strategic IT partner with its customers, offering managed services, IT outsourcing, consulting, and more, to help its clients manage and operate their IT infrastructure. Managed services is becoming a larger part of the business, as DiData can manage customers’ specific areas such as video, or manage and operate the whole process. The idea is “not just fix it when it breaks, but run it so it doesn't break in the first place.”
Based on the changes in clients' buying patterns as they want to consume IT as a service, Dimension Data is having more sourcing discussions than ever before, looking at how to convert IT to a service with utility based pricing.Dawson noted that the company has to "Make sure that the services we deliver are relevant for our clients, and provide a value proposition that resonates with clients - not just a cost-based discussion. We have to be better and differentiate on the quality of our service and what we deliver to clients." This will be based on accelerating DiData’s strengths: its people, operational excellence, competitive positioning, value proposition and the client experience. The value proposition includes procurement and logistics, multi-technology domains, geographical competence, support services, managed services, consulting services, and IT outsourcing (ITO).
Cloud computing is of course an important area that gives DiData "an opportunity to provide the complexity of an integrated, fully managed, multi-national solution." But I was pleased to hear that the speakers and others I spoke with didn't hype cloud services, and noted that there are trade-offs in terms of customization, loss of ownership and control, data sovereignty issues, security, interoperability, etc. Rather than simply saying that customers can customize their cloud-based UC solutions as so many others say, Dimension Data acknowledged that there are limitations to these solutions. The approach they're taking is not to announce a huge platform to take to market, but to have an offering for clients at every step of their journey. As CTO Etienne Reinecke noted, "We must have a value proposition for clients at each stage of adoption. The most positive conversations we can have is to scope the client's need to determine what services will fulfill these needs and determine if it'll be premise, cloud, hybrid, etc. This should be based on client needs."
All in all, I have to say that I was pleased with what I heard. This is one analyst conference where my BS detector didn't go off. The company is still working out the kinks with NTT, and has more work to do on its cloud strategy, but they're certainly doing and saying the right things.