A new Dimension - TechCentral

A new Dimension

[By Duncan McLeod]

When I arrived at Jeremy Ord’s office last Friday — the day after news that the group he cofounded and now chairs, Dimension Data, was being bought out for R24,4bn by a Japanese corporate giant — he was looking relaxed.

Having just flown back from London that morning, Ord appeared a little tired but entirely laid-back in jeans, takkies and an old jumper. The TV in his office, tuned in to the British Open, had the attention of the 54- year-old golfing and cycling enthusiast.

Ord, who joined Didata in 1983, had just helped pull off the biggest deal of his 27-year career at the helm of SA’s largest IT company.

It’s perhaps not surprising that he was relaxed. The decision by Japan’s Nippon Telegraph and Telephone Corp (NTT) to buy Didata in an all-cash deal — subject to regulatory approvals — marks the end of a difficult decade for Ord and Didata and the start of something new.

Throughout the 1980s and 1990s, Didata was on a winning ticket, with a share price that seemed immune to gravity. As the IT bubble expanded in the late 1990s, so did the hype around Didata.

So, when the bust happened, it hit hard.

Ord told me in a candid interview last year that Didata’s top managers had become “too arrogant”. “We had this view that we were kings of the world and everyone was in awe of us,” he told me.

“There was so much hype. But you can’t bullshit guys [about IT]anymore.”

After the bubble burst, Didata found itself in a world of trouble. Having listed on the London Stock Exchange at the peak of the dot-com hysteria, it found itself having to deal for the first time with a share price that had gone into meltdown and a product-focused business where profit margins had evaporated overnight.

Many IT companies didn’t survive the crash. Didata could have been among them, and nearly was. But Ord’s long-time friend, Johann Rupert, came to the company’s rescue with a cash injection from Venfin.

Profit margins are still well below the levels Didata enjoyed in the 1990s but the group under Ord and his team — especially Brett Dawson, who took the reins as CEO in 2004 — has turned itself around.

Gone was the hype; in came a new work ethic and a determination to prove the critics wrong.

The hard work paid off last week, when NTT made its formal offer for Didata following a courtship that had lasted three years.

The question now is how the character of SA’s largest IT business will change. Analysts have already expressed concern that the founders are unlikely to stay on and that the cultural differences between Didata and NTT will inevitably make integration difficult.

Gartner analyst Will Hahn says the merger of telecom operators and IT services companies has “an intuitive correctness to it”. But from a cultural perspective, “it really is a difficult move to pull off”.

Hahn says his “more sceptical colleagues” at Gartner would “wrinkle their eyebrows and say, ‘Just watch! The brand will get folded in and the managers will leave.’ ”

But Ord says Didata and NTT are conscious of the pitfalls. NTT has insisted that Didata continue to be run autonomously — the Japanese group will appoint only one director to Didata’s board.

The brand will not be changed and, though they’re not locked in, Didata executives will be offered generous incentives to keep them motivated and focused.

Will they have to learn Japanese? Ord says he knows only one Japanese word, san — a title of respect added to someone’s name. Even if Didata does continue to operate as an autonomous entity, that’s probably not a bad place to start.

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