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    Home » In-depth » Happier days at Didata as it rides out the recession

    Happier days at Didata as it rides out the recession

    By Editor7 August 2009
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    Jeremy Ord

    Jeremy Ord is looking more relaxed than he has in years. It’s not unsurprising. After the torrid years that followed the technology collapse earlier this decade, Didata has begun outperforming the expectations of investors and stock market analysts, and consistently so.

    In spite of the worst worldwide economic recession in decades, Didata’s share price is trading near to a multi-year high, and the Campus, it’s sprawling head office in Bryanston, north of Johannesburg, is a veritable hive of activity.

    Margins are still tight — the bumper profits of the late 1990s will probably never reoccur. But business is good, with signs that the recession is easing. The IT sector has weathered the storm particularly well, Ord says. “You haven’t seen the dramatic fall-off we saw in the last bust,” he says. “I think IT has come a long way and now is well and truly a enabler for business.”

    When the technology bubble burst after 2000, many businesspeople were angry with their IT suppliers, Ord says. They felt they’d wasted money preparing for the Y2K date-change switchover. And they didn’t trust their IT suppliers, who tended to bamboozle them with techno gobbledygook.

    That has all changed in the past eight years. “People realise for the first time that IT is an important part of what they’re doing.”

    That’s not to say the sector has escaped entirely unscathed. Didata’s product sales have been badly hit by the downturn. But its diversification into value-added services has cushioned the effects of the economic crisis. Software companies and pure product distributors and resellers haven’t been as lucky, Ord says.

    Didata and companies like it have reinvented themselves. “We had to, after our margins fell through the floor. The whole relationship between IT companies and their customers has changed. We now have to add value and be seen as a true partner to business.”

    The IT industry — and Ord includes Didata here — became “too arrogant”. “We had this view that we were kings of the world and everyone was in awe of us. There was so much hype. But you can’t bullshit guys anymore.”

    The hype might have evaporated, but things are hotting up in the technology sector again. Convergence between telecommunications operators and IT companies is created interesting new market dynamics.

    Incumbent telecoms operators all over the world have been moving into IT services as the margins in their traditional telephony and Internet businesses come under increasing pressure. In SA, Telkom tried to buy Didata rival Business Connexion, but the deal was thwarted by the Competition Commission.

    Could Didata be for sale if the right offer came along? The group has an interesting position in the market. Not only does it operate a worldwide IT services business, it also owns a particularly successful telecoms business in SA in the form of Internet Solutions. “You can never say never because ultimately that has to be decided by the shareholders,” Ord says.

    He says Didata is in a far stronger position in the IT services market than its telecoms rivals. “We understand this market, we understand global business, how to manage big global clients.”

    Ord says he is excited about the changes that are happening in SA telecoms. “After years of nothing happening, it finally looks like the industry is going to start moving. We will see a lot of consolidation.”

    He doesn’t rule out Didata playing a role in that consolidation, but declines to spell out if the group has specific acquisition plans.  — Duncan McLeod, TechCentral



    Brett Dawson Dimension Data Jeremy Ord
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