South Africa’s Digital Infrastructure, Hybrid Cloud, Workspaces for Tomorrow and Cyber-Security

Interview with Michael Abendanon, Regional Head of Dimension Data

Dimension Data was acquired for 2.1 billion pounds by the Japanese carrier NTT in 2010 and laid out very ambitious plans to double its turnover to 12 billion dollars or 8.5 billion pounds by 2018. How is the objective progressing?

The objective is progressing well; we are growing aggressively partly through organic growth and partly through acquisitive growth. I would say that probably the mix at this point in time is 60% organic growth and 40% acquisitive growth. We are always looking to buy organisations and companies that complement the solution offerings that we have in the market place. We have made significant acquisitions and we continue to make them. I think we are well on the path to achieving those goals.

From South Africa?

In terms of our revenue and profits? Yes. I am not saying that we all globally haven’t taken a bit of strain from an economic perspective but by large, we have been successful in South Africa against the budgets and the growth targets that we set ourselves. We have a very good client base; we typically operate in the Johannesburg Stock Exchange top 100 organisations as well as the top public sector organisations. By and large those organisations are continuing to invest in information technology as a key enabler to their businesses and are finding value in the goods and services that we offer them from a Dimension Data perspective. We certainly are not saying that the market isn’t tough but we are achieving the growth expectations that our shareholders have set us.

Dimension Data offers services across systems integration to provide specialist IT infrastructure solutions across networking, data centres, unified communications, security, desk top, and contact centre technologies. Can you start by elaborating as to how the company utilises the technology available in the digital era to help clients realise their full potential in what is obviously a very advanced industry?

Obviously Dimension Data started off as an infrastructure company and more than 30 years ago we were specifically specialists in the networking game. That is what the company was built off; we are very strong in the infrastructure space so anything infrastructure related in the information technology side, by way of example: structured cabling, data centres and all of the equipment that goes into the data centres such as fire suppression, access control, raised flooring, gases and all of that kind of stuff all the way to the equipment that is in the data centre such as the servers, storage, software defined networking that operates in the data centres, your switching etc. If you expand that slightly you look at the Microsoft infrastructure, the communication infrastructure that runs on top of the network, your perimeter security, the CCTV, in the boardrooms the audio-visual conferencing etc. All of those things are termed as infrastructure and it is something that Dimension Data does particularly well.

Dimension Data has put a lot of money over the last three or four years into acquiring and building out our cloud platform across the world. We have 16 or more managed cloud platforms across the world in major centres such as London, Sydney and Johannesburg and there are many others.

How many data centres do you have across the country?

In terms of data centres that we specifically own or data centres that we operate on behalf of clients?

Both.

I wouldn’t be able to tell you off the top of my head. Certainly we have one managed cloud platform. Dimension Data has put a lot of money over the last three or four years into acquiring and building out our cloud platform across the world. We have 16 or more managed cloud platforms across the world in major centres such as London, Sydney and Johannesburg and there are many others. Those are our primary data centres from a cloud perspective be it hosted cloud, private cloud or hybrid cloud. In terms of data centres that we operate on behalf of our clients, there are many. A lot of the data centres for financial services companies, some of the petrochemical companies, public sector organisations we would either operate on their behalf or maintain and in some instances buy those data centres back from a capital perspective and lease them back to the client on an operational perspective. It is a difficult question. We also have data centres that Internet Solutions has as well. So there is a data centre in Bree Street, a data centre in the Old Mutual building, and a data centre at the campus of our head office in Johannesburg in Bryanston. So there are numerous data centres that we certainly have and operate.

Can you give us an insight as to some of the top competitive issues which are facing organisations today in their need to become much more agile digital businesses?

One of the biggest things is cost; clients are looking to drive down costs in their organisation so they are looking to see if there are any processes in their organisation´s systems that they can drive cost out of and be more efficient in. The other key thing is agility, bringing products and services to the market in a shorter turnaround time. Then there is the old type of thing like client satisfaction, the way that they want to interact with clients is across multiple communication mechanisms so email contact centres and the social media type of aspects. Everything that we do enables the client effectively to drive out cost, be more efficient in their organisation, drive up the client experience or increase some form of agility in the organisation.

Can you give us an idea of how your clients are adopting the private cloud offerings that the company provides, particularly in terms of assisting clients with their business transformation which are geared for the hybrid cloud?

The cloud journey has not been easy; it is a highly competitive space. You have many global organisations such as ourselves that are in a race to cloud. However cloud has been around for many years, the cloud is not a new phenomenon. Certainly clients are adopting cloud in South Africa. One of the major reasons that we are finding that we are successful in South Africa is because our managed cloud platform is locally based instead of being based offshore so in terms of data sovereignty and those kind of things, it is very important to some organisations to have their key company critical data available locally as opposed to a data centre in America or in the US or elsewhere. The other key factor in terms of driving out cloud in South Africa which is important to us is the time and application sensitivity to a long haul wide area network. We found that if you are within South Africa your packet loss and your turn around time to a data centre is far less and hence there aren’t those application issues such as when you send those applications to a data centre that is a long way away. Those are two of the major reasons: data sovereignty and location expense. We are finding that to be successful but one of the major reasons that clients are moving to adopt cloud is from a security perspective, standardisation, agility, and the cost to maintain their own infrastructure as opposed to buying a standardised infrastructure from a partner such as ourselves. These are some of the key things that are driving clients to private, hybrid or hosted cloud solutions in our country.

Dimension Data and your subsidiary Brighthouse very recently announced the availability of your cloud services for the SAP platform in South Africa. Can you tell us about the plans for the roll out of this new platform? What other countries do you have in mind for its expansion?

At this point in time I am not in the loop as to which countries we are going to be rolling the platform out to. Certainly I know it will be available in South Africa and I am sure we will no doubt push it out to our major markets as well. Again, I am not 100% sure of those plans moving forward. It is a really exciting opportunity for us. SAP has only chosen a handful of partners to go to the market with in terms of the new licensing model that they have. One of those thankfully is Dimension Data. It is very exciting for us. We are talking to a number of our clients around their evolution to the new generation of SAP HANA and what that will do for our cloud platform, how it will drive clients to our cloud platform and some of the benefits that the clients get from a licensing perspective driving out cost and some of the new benefits and features that the platform brings are very exciting to clients and to us. We are very happy about that announcement.

How will your client organisations best be able to leverage this solution? What are the advantages of it?

Some of the benefits are from a licensing perspective, obviously it is a new version of SAP so there are a whole lot of features and benefits that the SAP HANA platform offers. In terms of getting into the meat of exactly what the key features and benefits are, in the cloud versus the typical traditional enterprise resource planning SAP applications that are stand alone in the clients´ environment, I wouldn’t be positioned to actually articulate those differences. I can certainly put some people in front of you that would be able to do so.

From a more macro perspective, the last several years have been a very disruptive time in the technology industry. How do you educate and navigate your clients and address some of the implications that the transformation projects have on IT infrastructure, security compliance and governance?

As a system integrator that has been in the game for a long time that is a global system integrator and that has clients in the top echelons around the world such as the S&P 500, we are able to take best practice learnings from organisations and spread them to other organisations. For instance, in Cape Town we have a very strong retail focus, there are a lot of retailers in Cape Town such as Shoprite, Woolworths, Pick and Pay to mention but a few and there are a lot of projects that we have on the go, a lot of thinking and innovation that we have on the go with those retailers in Cape Town such as how do they capture their clients, how do they roll out mass Wi-Fi, how do they leverage their network, what does the point of sale for the future look like, how do they improve logistics and their supply chain, all those kind of things. We are involved in consulting and involved in some very big projects in that regard and we can take some of that best practice thinking to other clients in other geographies, potentially Tesco in the UK or Walmart in the US for example. Typically we leverage from a client knowledge perspective, HSBC is a big client for us in Europe and some of the thinking that we have and innovation that we have coming out of engagements with clients such as HSBC we could use locally with clients such as Standard Bank, Old Mutual etc. That is typically what we do but I do agree with you, the IT landscape is moving rapidly, there are so many changes, acquisitions happening every day, new technologies that are hitting us and it is a difficult field to navigate. We see ourselves as market leaders, we see ourselves as ahead of the curve in terms of things like cloud and all of the various other technologies that we specialise in. We believe that we are trusted partners and advisors with our clients to navigate these tricky fields.

We liked your phrase “digital needs the human touch”. It was from a report that was published regarding the interoperability of contact centres for various businesses. In your own words please explain to us what was meant by this.

Effectively your new age contact centre is not only a call centre, either outbound or inbound telephone communication with clients or B2B partners. The contact centre of the future has multiple ways to touch its B2B partners or its clients. As we said earlier it is either through social media, webchat, email, videoconferencing, telephones either landline or mobile etc. There are multiple ways in which a contact centre has to now effectively set itself up to deal with its customer base. One of the biggest drivers of that is the digital world and that is really being driven by mobile devices such as cell phones and clients want that experience of being able to interoperate with the company that they are trying to interact with in multiple fashions. Specifically one of those that is very attractive is through an application where you can specifically find out what specials are on the go, where they are, what their balances are, and all those necessary things. In order to do that effectively it needs the human touch. It needs to be relevant, it can’t just be reams and reams of data that is difficult to find. We believe that we are specialists in providing those platforms; advising people from a contact centre experience perspective and building those applications that enable the customer to have a great experience to operate or deal with the organisation.

As you have said, consumers are really embracing the new points of contact such as social media and smartphone apps. Can you tell us what the significance of this means in an African context?

One of the biggest inhibitors to rapid economic growth in South Africa has been the access to bandwidth in all shapes and forms. We are rapidly overcoming that. There has been a lot of aggressive investment into South Africa to bring more connectivity to the country. If we have a look at the undersea cables, there are significantly more undersea cables than there were a while ago and we now have sufficient connectivity into Asia, Europe and the US. Obviously once that lands on our shores, that then needs to be transported through fibre etc. all over the country. That then obviously either goes into cellular networks, or metropolitan networks and it has to get out into the public via free Wi-Fi, better cell phone technology so moving from 3G and Edge to LTE etc. We are finding that we are somewhat behind the first world in terms of that explosion of network availability but it certainly is coming. If you walk around the city of Cape Town there is a lot of free Wi-Fi that the city of Cape Town has put in. There is significant investment into some of the rural areas also. What does that do for us? It enables the economy. People can start-up businesses, they can educate themselves, they can bank, they can procure etc. We are finding the rapid explosion of mass network availability in South Africa. We still have a long way to go and we are still not there from a price point perspective, we are still more expensive than many other countries in first world economies but we are getting there. There is a lot of competition in that landscape and we are making progress. It is a key enabler to the economy, to moving masses of people out of the poverty line and improving education. There are many benefits.

Dimension Data has become the title partner of the African Cycling team who made history this year in being the first African team to compete in the Tour de France. Can you tell us how this new partnership will support the development of African cycling around the world? What do you think it will bring to the Dimension Data brand?

Dimension Data has been involved in sporting events for some time whether it is our Pro Am which is a competition we have held in South Africa for at least 20 years or other events. We have always used events like that not only to get our brand out there and into the market place but to entertain clients and our partners. We find it is a good thing for us to do. What cycling brings to the table for us is obviously something different; cycling is quite a technology driven sport, anybody that cycles will understand that it is all about gradient, heart rate, power, watts per kg and all these things. Our first journey into cycling on the major world stage was a partnership with the ASO and the Tour de France. They host multiple events around the world but obviously their major event is the Tour de France. One of the major reasons we partnered with them as a technology partner was that our brand was not as well known in Europe and other continents as it was in the African context and the amount of people that watch the Tour de France in terms of live TV is massive so to get our brand out there into the market place, it was a good organisation to be a part of and it was great to be part of the Tour de France. Secondly in terms of enabling technology in a race such as the Tour de France to enhance the viewer experience has been something that we have wanted to do. Really it is about taking a lot of data that we get from cyclists in the teams such as the peloton, to the breakaway to power to average speed etc. crunching that data in a data warehouse effectively adding some value to that data, business intelligence and then producing it back to the commentating team as well as to the public out there to say “look, you now are getting a lot more rich data that informs you of exactly what is happening out there”. There is a typical thing where you used to have the chalk board and it used to say “the breakaway is 1 minute and 30 seconds ahead of the peloton”, we hoped to digitise that whole space and we have done so. After getting involved in the Tour de France, we also got involved in the Cape Epic for a very similar reason, the Tour de France is the pinnacle of the road stage racing scene in the world, and the Cape Epic we see as the top backstage race in the world. It is local to South Africa and we are a proudly South African company and we wanted to get involved in the Cape Epic for many reasons but we thought we could bring our technology to bare at the Cape Epic for riders, for the Cape Epic themselves and their operations, their medicals etc. We have deployed a lot of technology for them to help bring a better product to market. Through that partnership it has also put our brand out there into the market place. The relationship with the Qhubeka team came about because a very successful ex South African cyclist by the name of Douglas Rider had a relationship with MTN and I think that sponsorship had come to an end and they were looking for a new partner. We took the decision to partner or sponsor Douglas Rider´s cycling team or the Qhubeka cycling team for many reasons. We are not the only sponsors, there are other partners that sponsor the team as well but for us, we are a proudly South African company, and they are a South African home grown cycling team that is competing on the world stage. We have never had a South African team competing in the world pro series on the road.  It was important for us in terms of the feel good for our staff, in terms of giving back to society, and for all the right reasons we thought it might be a good sponsorship. Not only does it help put South African cyclists on the map globally but it also enables us to have a charitable cause. Qhubeka effectively is giving bicycles back to communities to enable people to conduct business and for children to be able to go to school, etc. So there is a charitable side to our relationship to Qhubeka. There are multiple benefits. I am passionate about the cause.

It sounds like a really great fit both from a technological application perspective as well as a brand enhancement.

One of the key things for us is that if we can enable video and big data as well as data crunching out there in the wilderness such as where the Cape Epic is and where the Tour de France goes, what could we do for your organisation in a central metropolitan area? A lot of the clients that we had through the Cape Epic said, “how come I can get connectivity and high data speed out here in the middle of nowhere but I can’t get it in my office!” That is exactly what we want them to say because we want to go and do that for their organisations and show them what we are able to do.

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