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  • Let’s position our business in terms of where customers invest their ICT $. Corporate strategy sets the ICT agenda. ICT Strategy is implemented through a range of project oriented consulting services. This implementation process determines in broad terms the application software and infrastructure architectures required. A range of application and infrastructure consulting, implementation and support services identifies the specific application and infrastructure elements and then implements them together with the associated support and system management environment. These services span project to annuity services such as outsourcing and managed services. The ‘mission critical’ data centre environment requires specific attention to ensure the appropriate choice and implementation of enterprise wide software and hardware. People either on a permanent or contract basis are required to carry out these implementation and the system operations tasks. As part of the application and infrastructure services activities, equipment and software is required often in volume and a range of procurement and management services support this provisioning exercise. Data#3 works with customers in the areas shown. In this schema, there is a point above which the customer seeks independence in advice and consulting – ‘vendor agnostic’. Below this point however the customers’ focus is on viability and reliability and choice of technology and vendor is critical. Moving up this schema, product and services tend to increase in margin but are increasingly people and project oriented. Moving down the schema, commoditisation increases as does the % of the customers’ ICT budget particularly under some form of contract and the supplied services become more process dependent. Of interest is where other ICT companies sit across this schema e.g. SMS and Oakton. There is sometimes a tendency to compare various businesses. This can be misleading because to operate at any level in the schema requires expertise within different business models.
  • Within these areas of specialisation we offer ICT solutions that align with and can enable a range of tactics customers employ in meeting the high level business objectives set out in their corporate strategy.
  • Within these areas of specialisation we offer ICT solutions that align with and can enable a range of tactics customers employ in meeting the high level business objectives set out in their corporate strategy.
  • Underpinning these solutions is market-leading expertise in technologies from global vendors that are widely adopted by customers and in intellectual property developed by Data#3 that clearly differentiates it from competitors e.g. Perform, SAM, Licensing Online, CustomerNet.
  • Let’s look at what the analysts are saying first e.g. Goldman Sachs very recent survey of 100 managers from the Fortune 1000 companies in the US.
  • And what’s happening with expenditure trends.
  • And in the specific areas of enterprise servers and systems IBM and HP have moved to the top through the new ‘blade’ technologies while in enterprise storage, IBM remains the market leader primarily through its strong position in the mid market and HP is laying claim to an increasing stake through better technology and a more partner oriented go to market. These vendors influence the opportunity for our Enterprise and ICT Integration Services businesses.
  • In terms of software, VMWare with its market leading virtualisation software and Cisco in Security are gaining share of spend. Data#3 is one of 3 certified partners in Australia for VMWare and has developed and launched its trademarked ‘4 Corners architecture’ for VMWare within our Enterprise Solutions area of specialisation. Data#3 is Cisco’s fastest growing Gold Partner in Australia and Cisco technologies are embedded in offerings from a number of parts of the business.
  • Microsoft’s Vista will influence a significant share of spend for a long period of time - initially in the small and mid market and subsequently in the corporate market. This will influence the mid term performance of our Licensing and ICT Integration Services businesses.
  • Further reinforcing earlier elements of the survey, networking with Cisco is positive for corporate customers.
  • From a different point of view, Gartner has looked at forward areas of focus and clearly this represents a shift in the agenda to ICT as a strategic tool for business development and growth.
  • Closer to home, Data#3 surveys its customers annually on ICT priorities. The top 4 areas remain unchanged however there have been shift year to year as we will see in a moment
  • Year to year we see enhanced emphasis on business enabling technologies which supports Gartner’s findings regarding the ‘strategic’ shift.
  • So in summary it is reasonable to conclude that:

Data Data Presentation Transcript

  • BBY Telecommunications, Media and Technology Conference John Grant – Managing Director 2 nd November 2006
  • Content
    • Positioning our business
    • Financial performance
    • Customer ICT Spend
    • Market assumptions in 2007
    • Outlook for 2007
  • Content
    • Positioning our business
    • Financial performance
    • Customer ICT Spend
    • Market assumptions in 2007
    • Outlook for 2007
  • Positioning our business Our Customer
  • Positioning our business Technology adoption
  • Positioning our business Customer ICT investment Provisioning and management of volume hardware and software People resourcing Enterprise software and hardware Application and Infrastructure Services Strategy Implementation Services Corporate Strategy Services
    • Increasing
    • Margin %
    • People dependency
    • Decreasing
    • % Customer spend
    • % Contract Revenue
    • Process dependency
    • Commoditisation
    Data#3 Vendor agnostic Vendor aligned SMS Oakton SMS
  • Volume hardware and software supply and management People resourcing Enterprise software and hardware Application and Infrastructure Services Strategy Implementation Services Corporate Strategy Services Licensing Solutions ICT Product Solutions Licensing Solutions ICT Product Solutions Recruitment Solutions Enterprise Solutions Integration Services Managed Services Data#3 areas of specialisation Positioning our business Areas of specialisation
  • Volume hardware and software supply and management People resourcing Enterprise software and hardware Application and Infrastructure Services Strategy Implementation Services Corporate Strategy Services Licensing Solutions ICT Product Solutions Software Licensing and Asset Management; ICT Product Procurement Contract and Permanent staff; Performance Management Infrastructure Optimisation & Virtualisation, Business Continuity, Data Lifecycle Management Workforce Productivity Wireless and Mobility Unified Communications Security Data#3 Solution Offerings Positioning our business Our Solutions
  • Volume hardware and software supply and management People resourcing Enterprise software and hardware Application and Infrastructure Services Strategy Implementation Services Corporate Strategy Services Licensing Solutions ICT Product Solutions Software Asset Mgt Microsoft + IBM, HP, Toshiba Perform IBM HP Cisco, VMWare Cisco Systems Microsoft Citrix, NetIQ, Symantec Data#3 market-leading expertise Positioning our business Our Expertise
  • Content
    • Positioning our business
    • Financial performance
    • Customer ICT Spend
    • Market assumptions in 2007
    • Outlook for 2007
  • Financial performance - 2006
    • 2006 Market buoyant but competitive
    • Revenues up 22%
      • Services up 42%
      • Product up 17%
    • ‘ Cross-sell’ index increased by 45%
    • Gross margins held
    • Expenses declined as % GM
    • NPAT of $5.7M exceeded market guidance
    • Dividend 28 cps fully franked - up 47%
    • Total shareholder returns of 33%
    • Strong cashflow; no debt
    • Staff and customer satisfaction targets achieved
  • Historical performance Revenue and profit Total revenue up 22% to $240 million Services + 42% Product + 17% Net profit after tax up 37% to $5.7 million
  • Historical performance Earnings, dividends and share price EPS up 35% to 36.9 cents Dividend up 47% to 28.0 cents… 76% payout Share price increased by 23% to 30 June 2006
  • Content
    • Positioning our business
    • Financial performance
    • Customer ICT Spend
    • Market assumptions in 2007
    • Outlook for 2007
  • Customer ICT Spend - Analysts
  • Customer ICT Spend - Analysts Incremental “ Incremental cost control assisted by ‘hottest’ tech trends e.g. consolidation and virtualisation”
  • Customer ICT Spend - Analysts Incremental “ Strong position in ‘blade’ technology helps IBM and HP move to the top” “ IBM strength in mid-range and HP improving with better technology and go to market”
  • Customer ICT Spend - Analysts Incremental “ Share gainers in (virtualisation) software and security remain VMWare and Cisco”
  • Customer ICT Spend - Analysts Incremental “ Incremental upgrade revenue from corporates should build starting 2 years after launch ”
  • Customer ICT Spend - Analysts Incremental “ The 12 month outlook for corporate network spending with Cisco looks positive”
  • Customer ICT Spend - Analysts 0% 10% 20% 30% 40% 50% Strategic use of IT and business intelligence Creating new products and services 13% “ ..from operational to strategic” Percentage of responses Enabling better business processes Cutting business costs 7% Gartner’s CIO survey indicates a shift in the role of IS over the next 3 years: 38% 42%
  • Customer ICT Spend - Customers Data#3 Customer top priorities remain:
  • Customer ICT Spend - Customers Data#3’s Customers are increasing focus on: “ ..from operational to strategic”
  • Customer ICT Spend - Conclusion
    • ICT spending growth in range 5% – 7%
    • Increasing shift to ‘strategic’ spend
    • Continuing focus on cost control
    • Strong vendors
      • Cisco
      • IBM
      • VMWare
      • HP
    • Strong technologies
      • Business continuity / Disaster Recovery
      • Virtualisation and consolidation
      • Security
      • Mobility
  • Content
    • Positioning our business
    • Financial performance
    • Customer ICT Spend
    • Market assumptions in 2007
    • Outlook for 2007
  • Market assumptions in 2007
    • The economy
    • Will remain positive if contracting somewhat
    • Our customers
    • ICT solutions viewed as strategic tools and will maintain a positive view of ICT investment
    • Our people
    • Will be able to recruit and retain the right people and deploy them to deliver revenue growth
    • Competitors
    • Will be able to retain differentiation and maintain or improve current win rates
    • Our Vendors
    • Will drive growth and technology leadership and our partnerships will be maintained or strengthened
    • Technology
    • Will be able to predict the impact of emerging technologies and adapt accordingly
  • Content
    • Key shareholder information
    • Performance in 2005/06
    • Market assumptions in 2007
    • Strategic Positioning
    • Outlook for 2007
  • Outlook for 2007 … we believe we can improve financial performance over the record 2006 result and deliver dividend yields at the top of the sector...
  • Questions and Comments Ord Minnet ICT Conference September 2006