UXC acquires Getronics Australia

ASX-listed information technology firm UXC has acquired the Dutch-owned technology services provider Getronics Australia for an undisclosed sum.

With calendar year 2007 revenues of some $126 million, Getronics Australia will be the largest acquisition that UXC has completed.

Headquartered in Sydney, Getronics Australia provides national coverage to metropolitan and regional centres and employs 525 staff nationwide.

The acquisition strengthens UXC’s existing professional and communications services capabilities and provides a significant new Managed Services capability.

The transaction also provides further scale to UXC and is a strategic fit into UXC’s Business Solutions Group.

Getronics Australia will join the UXC Business Solutions Group as a business unit in its Infrastructure division. Getronics Australia managing director Paul Timmins will report to UXC Business Solutions Group chief executive Cris Nicolli.

The company originated in 1972 as Wang Australia, before being purchased by the Dutch group Getronics in 1999, which itself was purchased in 2007 by KPN, a leading Dutch provider of IT and telecommunications services.

KPN's strategy to focus on major markets to service the international client base and work through service partners in other markets gave its Australian operations with the opportunity to join UXC.

“We view joining UXC as providing the company with the opportunity to both continue and accelerate the growth path we have been on in the last couple of years,” Getronics managing director Mr Timmins said.

“We anticipate that working with a local parent, within the UXC business model of freedom within boundaries, will provide us with a higher degree of agility and flexibility,” he said.

“We expect that this will improve our prospects, responsiveness to customers and efficiency, and thus our bottom line.”

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Hostworks acquired for $69 million

ADELAIDE-based hosting and managed services firm Hostworks has been acquired by Broadcast Australia for $68.9 million.

Hostworks has been an industry pioneer, and is one of the largest full-service web hosting companies in the region. Its customer base includes NineMSN, ABC, SBS, News Ltd, Optus, and AAMI.

More than 15 per cent of all page views each month by Australia’s 10 million internet users are hosted by Hostworks.

Hostworks’ board of directors unanimously recommended that shareholders accept the Broadcast Australia offer. Major Hostworks shareholders including managing director Marty Gauvin and non-executive director Stephen Chapman granted Broadcast Australia an option over a 19 per cent parcel of Hostworks shares.

In the eight years since foundation, Hostworks has become recognized as Australia’s leading provider of managed services for on-line media and entertainment companies and management and hosting services for a broad range of critical applications.

“Broadcast Australia’s proposal represents an excellent outcome for our shareholders as well as providing significant benefits for customers and employees,” Mr Gauvin said in a statement.

Broadcast Australia is a wholly-owned subsidiary of the ASX-listed Macquarie Communications Infrastructure Group.

“We are pleased to have entered into an agreement to acquire Hostworks, which enhances Broadcast Australia’s core business of being a trusted provider connecting content owners to customers across multiple platforms,” said Broadcast Australia managing director, Graeme Barclay.

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ATO briefs on massive contract

THE Australian Taxation Office will conduct its first briefing for potential tech suppliers to its $1 billion outsourcing plan.

The briefing covers the first stage of a program that will eventually replace the nine-year outsourcing contract the ATO has held with US services giant Electronic Data Systems (EDS).

The ATO announced through the Commonwealth tenders website it would meet with interested suppliers to the Managed Network Services component of its plans on Monday December 17.

The Tax Office said its sourcing plans called for market testing of various services between mid-next year and mid-2010. It plans to issue a series of Expressions of Interest (EoIs) and Requests for Tender (RfTs) during that period.

The first EOI, for Managed Network Services, will be released in late January. It will cover areas ranging from voice, mobile and data carriage services, desktop handsets and PBX systems, network switches and security gateways.

Following the EOI, the Tax Office is expected to select a shortlist of suppliers to participate in further briefings and workshops before being invited to respond to a formal RfT.

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HP unveils automated services tools

US tech giant HP has bolstered its service offerings with a suite of new software and services to help customers transform their IT operations and automate the management of business operations.

The HP Automated Operations 1.0 offering is a set of products that automates IT operations, eliminating labor-intensive tasks and ad hoc, error-prone manual processes. The company says the product dramatically lowers the day-to-day cost of IT operations.

The HP Automated Operations 1.0 software suite is composed of IT Service Management, Business Service Management and Business Service Automation solutions.

It also launched its HP Business Service Automation software, a single platform to automate all IT processes and drive change across applications, servers, networks, storage and clients.

“We have been aggressively expanding our software portfolio in the last two years to broaden and deepen our capabilities to help customers improve their top and bottom lines,” HP’s Software senior vice-president Tom Hogan said.

IDC Enterprise Management Service research director Stephen Elliot said business service automation was an opportunity for IT organisations to more closely align with business objectives such as compliance, security, and cost reduction, and the delivery of innovative products.

“The legacy manner in which many IT organisations execute enterprise infrastructure management processes is quickly becoming obsolete as they are too static, take too long to execute and lengthen time to market cycles,” Mr Elliot said.

“IT organisations must mature toward processes and technologies that enable a more dynamic, business-driven impact.”

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Spam virus activity spikes in first quarter

DESPITE slowing marginally furing March, Spam levels increased more than 75 per cent during the first quarter to the highest levels in two years, according to managed security service provider MessageLabs.

MessageLabs Intelligence Report for March also found that it is small and medium sized businesses that are copping the worst of the spam problem, with SMBs receiving more than double the volume of spam compared to enterprise organisations.

Quarter on quarter, virus and botnet activity also increased, also with SMB wearing more than larger, better resourced organisations.

MessageLabs said SMBs were not targeted by spammers any more than large organisations, but were less likely to have defences in place to deal with the problem.

For small businesses, spam can very quickly become a silent killer, overwhelming the resources of the mail system before any effective countermeasures can be enforced, the report said.

“Today, spam is considered a side effect of email,” MessageLabs chief security analyst Mark Sunner said.

“The majority of small businesses view spam as an ongoing irritation rather than a real threat and have given up on dealing with the issue only to find that bad guys target them even more aggressively.

“If the first quarter data tells us anything, it’s that malicious activity in the form of spam will only continue on an upward trend,” Mr Sunner said.

Also in Q1 2007, MessageLabs saw virus and trojan traffic levels steadily decline from last year with rates of 1 in 126.1 emails. While the overall levels decreased, MessageLabs believes that virus and Trojan activity is actually on the rise with spammers delivering them disguised as spam.

Phishing activity accounted for 70.8 per cent of the malware threats this quarter, an increase of 8.6 per cent on the previous quarter.

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Bundled services a must for ISP survival

INTERNET service providers risk dealing themselves out of business if they fail to broaden their relationship with small business customers to include a value bundles of managed services.

European research outfit Analysys says the total spend by small and medium sized enterprises – companies with 10 to 500 employees – was nearing its peak among developed economies.

In a study of economies in Western Europe found that after 2009, the number of new SME broadband customers would be small, with broadband penetration of businesses exceeding 90 per cent in most countries.

“Growth in demand for broadband managed services in the SME market is creating a new potential source of revenue for suppliers of broadband access services,” the Analysys report said.

“Billions of (dollars) in additional annual revenue are ready to be shared among suppliers that can provide SMEs with the right service packages to complement basic Internet access,” it said.

Analysys said that in the developed economies of Western Europe, demand for among SME’s broadband managed services would grow at a compound annual rate of more than 11 per cent – representing a huge opportunity for ISPs to extend their customer relationships.
Broadband providers are in a position to exploit this growth if they can find cost-effective ways to deliver a wide range of managed services, such as VoIP, managed IT services, hosted data and software as a service, the report said.
In the Australian market, local consultant Paul Budde from BuddeCom has long argued that ISP’s that want to survive should be looking to sell value-added services.

“It was (and is) my argument that access and basic services are commodity products that will always be under pressure, and very vulnerable to the whims of the network provider,” Mr Budde says in in his latest BuddeBlog newsletter.

“On several occasions Telstra has changed the rules, with the stroke of a pen, sending many telcos and ISPs to the wall as a result,” he said.

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Small ISPs get squeezed in SME market

INTERNET service providers will need to look to provide value-added broadband managed services if they are to sustain small and medium-sized customer spend, research consultants Analysys said.

The company reports that while the SME spend on simple broadband access is expected to peak in about 2009, the market for managed services is set for a period of strong growth through to the end of 2011.

The Analysys European research is based on a survey of 184 SME’s, but its finding can be broadly applied as trends in the Australian market.

The report found that broadband managed services – that is, services enabled by or delivered over a broadband connection – were already in string demand.

Among SMEs, 65 per cent of companies preferred to buy their telecom services from a single supplier. This means that broadband providers with the right portfolio of bundled and non-bundled services have the opportunity to increase the average revenue per (SME) user.

“In order to sustain revenue growth, providers targeting the SME sector must introduce complementary services, and provision of broadband managed services is a key area for exploitation,” the report’s author Simon Sherrington said.

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One day’s outage fatal, risk managers say

NEARLY fifty per cent of risk managers say a 24-hour IT failure would threaten the very survival of their companies, research from the Economist Intelligence Unit has found.

The severity of the threat from IT system outages was one of several factors prompting companies to increase attention devoted to risks associated with their operations.

Some 47 per cent of risk managers questioned for an EIU survey on business resilience said that unplanned downtime of information technology lasting 24 hours or more could jeopardise the survival of their companies.

Three-quarters of survey respondents said they had increased time and resources dedicated to operational risk management, while 71 per cent said they had increased focus on business continuity programs

Loss of data and human error were seen as the most significant in terms of operational risk management.

“The results of the survey illustrate the degree to which companies now rely on their IT systems, as well as the devastating consequences that can ensue from even a short period of disruption,” said the report’s editor Rob Mitchell.

“Discussions of business continuity often centre around catastrophic events, such as terrorist attack or pandemic outbreak, but our survey indicates that it is the more mundane and likely problems, such as power outage, human error and unplanned downtime that pose the gravest threat to organisations,” Mr Mitchell said.

The report found risk managers were “reasonably confident” about the processes they use to identify risks and to ensure that the board is made aware of significant problems, with 61 per cent saying that they conduct risk assessment successfully, and 52 per cent giving themselves a similar rating for reporting on key risks to the board.

Communicating risk issues with employees and with the extended enterprise – like partners and suppliers – tends to be less successful. Only 31 per cent of respondents said they communicate successfully on operational risk issues with employees, and just 19 per cent gave themselves a similar rating for their communication with the extended enterprise.

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NetRegistry ramps up SME hosted services

INTERNET services firm NetRegistry has acquired the assets of domain name and web hosting company PlanetDomain from Primus Telecommunications for more than $8 million.

With the addition of the PlanetDomain business, NetRegistry chief executive Larry Bloch says the company now dominates the Australian market for domain name registrations with 27 per cent of the market.

The combined business now boasts more than 250,000 domestic and international small and medium sized (SME) customers, Mr Bloch said. PlanetDomain is profitable and would continue to be managed by its current staff in Melbourne.

Mr Bloch NetRegistry planned to pursue other acquisitions of companies that provide hosted application to large numbers of small businesses in Australia.

“Our strategy is to acquire relationships with SME’s at the start of their online journey – buying a domain name,” Mr Bloch said. “We then apply our proven skills in customer service to build trust and loyalty, gradually increasing the breadth of subscription services provided.

“We are still at the early stage of a long wave of innovation in the provision of online services to businesses. Our growing market position places us well to dominate the provision of online business services to Australian SME’s for many years to come,” he said.

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