Dimension Data

Anyone involved with computer networks will know that linking the various elements together doesn’t come easily; but Jeff Daniel looks at one organisation that makes it seem that way.

Study the progress of Dimension Data since its inception—which has been nothing short of meteoric—and you’ll see that it involves three parallel strands.

Despite having a global workforce of over 12,000 and revenues last year of £3 billion, Dimension Data is one of those companies that is a towering giant within the IT community but largely anonymous outside. Part of the problem here is the difficulty in defining exactly what it does—or at least putting limits on what it does. An article such as this can barely scratch the surface.

Started in Johannesburg in 1983, when the notion of networked communications was first making an entrance to the business world, Dimension Data has evolved into the archetypal specialist IT services and solutions provider, helping clients plan, build, support and manage their IT infrastructures. It operates at the forefront of networking and communications technology on five continents and 49 countries in all industrialised corners of the globe.

Today, within the company’s worldwide interests, South Africa is one of several operating divisions including the rest of Africa and the Middle East. In charge is CEO Allan Cawood, himself founder of DNS, which grew to become South Africa’s third largest specialist networking organisation.

“From the very outset,” he says, “the ambition and vision of the business has been clear. The managers of Dimension Data knew that the capacity to work on a grand stage was paramount.” One wonders, though, whether the three young South Africans who left the comfort of their salaried jobs to start a fledgling business could have anticipated the scale of what they were starting.

Long before investing in dot com businesses was fashionable, Dimension Data had made a sufficiently strong name for itself to go public just four years after going into business. At the time, the R7.5 million that was raised seems a paltry amount compared with the magnitude of investments associated with the business these days. Last year, Nippon Telegraph and Telephone Corporation, one of the largest telecommunications service providers anywhere in the world, reached an agreement with Dimension Data and acquired the entire shareholding of the company for approximately £2.1 billion in cash.

These days, Dimension Data’s Systems Integration business generates 82 per cent of the group’s annual income by providing specialist IT infrastructure solutions across six lines of business: Network Integration, Converged Communications, Security, Data Centre Solutions, Customer Interactive Solutions and Microsoft Solutions.

To get to this point, Dimension Data has from the very earliest of days undertaken an aggressive programme of acquisitions. Within just a few years of going public, the first tentative expansion occurred—first into the neighbouring country of Botswana and then gradually casting the net wider across Africa and into the Asia Pacific region.

Since 1996, barely a year has gone by without buying into some key business—either partially or entirely. The year 2000 was a particularly hectic year: first achieving public listing on the London Stock Exchange and then spending in the order of three quarters of a billion dollars making three IT acquisitions in the US and another in Switzerland, as well as buying outstanding shares in existing investments in the UK and Australia.

So far, then, we have seen two of the three strands: inherent IT engineering skills and a global vision. The third element of Dimension Data’s success revolves around the strategic partnerships it has built—particularly with Cisco and Microsoft.

“From the early 1990s,” explains Cawood, “we have been linked with Cisco. We were granted Gold Partner status in 1994—one of only six at the time outside the US—and since then we have won countless awards from Cisco for our performance.” In fact Dimension Data has been named ‘Partner of the Year’ on several occasions and last year became only the fourth company anywhere to achieve Cisco Global Certification.

The relationship with Microsoft is almost as longstanding and equally bountiful in terms of awards won and Gold Partnership status earned. In addition, Dimension Data has technology partnership agreements with numerous blue chip names representing the crème de la crème of what’s available in IT.

“Dimension Data’s global expansion,” says Cawood, “has mirrored the drive amongst corporations for a worldwide presence. We have identified all the key elements needed to work internationally and brought them into the group.”

For clients, welding IT components together that have different technological biases, heritages and local business rules can be a daunting challenge. Global companies depend on networks providing fast, seamless connectivity but have often learnt the hard way of their fragility. When a network goes down, business suffers. Seemingly small slip-ups can cripple things and, in today’s competitive marketplace, outages can be extraordinarily expensive in terms of business productivity and damaged client confidence.

“One of the key features in our success,” says Cawood, “is our capacity to provide a single point of accountability for all IT procurement and logistics needs. We open a window of visibility for clients into the entire supply chain.”

While the majority of revenue for Dimension Data comes from the services it provides, one of the subsidiaries it owns is Plessey, a name synonymous with engineering hardware for over half a century. From an IT solutions perspective, Plessey, with a track record spanning 50 years and regional offices in 13 African countries, is Africa’s leading provider of telecoms infrastructure solutions. Plessey has built a reputation of trust and dependability through its project management approach and has become Africa’s premier provider of turnkey telecommunications solutions. 

Plessey’s commitment to quality is demonstrated by the company’s ISO 9001 accreditation and is acknowledged in the industry for its commitment to ‘execution excellence’. Plessey’s expertise has seen it build mobile network base transceiver stations (BTS), wireless local loop (WLL) systems and fibre optic installations in excess of 8,000 sites and 7,500 kilometres respectively, in 26 countries across sub-Saharan Africa.

Dimension Data weathered the slump the IT industry felt in the early 2000s and despite a marked decline in business from the financial sector, has managed the past couple of years with equal success.

Strong growth in Managed Services and in Internet Solutions has seen revenue growth in double digits. Internet Solutions provides IP-based connectivity, communications, data centre and carrier services throughout Africa, serving large public and private sector organisations, medium-sized organisations and, through its channel programme, smaller organisations and consumers. Connectivity solutions include corporate internet access, virtual private networks, community-based connectivity services and broadband; and the business also facilitates person-to-person communications, with services including voice, messaging, facsimile, mobility and fixed-mobile convergence.

Internet Solutions’ data centre services provide physical computing infrastructure and applications in the cloud; while carrier offerings include the self-provision of physical connectivity services in cases where it is unable, through normal supplier relationships, to source those services at a competitive price or service level, or where attractive niche opportunities exist.

Meanwhile, tight control over costs has increased gross margin to over 20 per cent with larger dividends and increased cash holdings.

www.dimensiondata.com