itX general manager, Greg Newham, is gearing up to take advantage of increasing demand for virtualisation and on-demand software. He met up with NADIA CAMERON to talk about the economic climate, itX’s plans for 2009 and why there are still growth opportunities in the market.
What’s your outlook on 2009?
Greg Newham (GN): We’re cautiously optimistic at the moment. We are through our fi rst eight months, and it’s been good. We had a very strong forecast for the year that we built in the latter part of the last fi nancial year, and we’re pretty close to our targets. Business is up signifi cantly last year – we’ve had over 30 per cent revenue growth year-on-year. At this stage, touch wood, we really haven’t had any tremendous drop-off in business at all. A few vendors have seen some of the bigger deals slip, and that does have an impact, but we’re all still trucking on.
Did itX see a spike at the end of last year before price hikes were introduced?
GN: We certainly saw more business closing – we particularly found that with some of the hardware stuff we do. However, December has always been a big month for us, as a lot of the vendors we deal with have their end-of-fi nancial year then, which drives additional business. December was on plan, January is always soft, although it was ahead of our forecasts, and February is still looking good. But as I say, I’m cautiously optimistic because who really knows. There has to be a day of reckoning at some point. I think we probably won’t know until the end of March, as that is typically a big month for the industry. But if quotes are any barometer of what’s going on, we’ve never been busier. And people I have spoken to are seeing the same thing.
Hardware was expected to be hardest hit. Did you see this drop?
GN: Our biggest hardware business is Sun, and that business is up year-on-year. Sun has been taking market share. So from our perspective it’s going well still.
What were the drivers behind your strong half-yearly results to December 31?
GN: A lot of our revenue is tied up around virtualisation and Citrix, VMware and add-on products we have got. That helped drive year-onyear revenue as we picked up additional vendors and had a lot of growth in that area. But Sun has also won huge deals, some of which were tied around virtualisation projects. In light of the economic downturn, has itX changed its go-to-market strategy?
GN: We had aggressive growth plans we’d already put into effect around staff for example, and we’re still maintaining that because we’re still experiencing growth. We’re still employing staff to keep up with the volume of quotes we’re doing, so we’re still expanding. We’ll continue to review where we are at. We have been prudent about what we do, like most businesses. It’s not the time to be fl amboyant with what you’re doing – it’s a time to be sticking to your guns, working to your plan and watching the basics.
GN: In the latter part of last year, we had a need for staff but put it off until now. We tend to do that in December anyway as it’s not the time to be hiring. Other than that, we haven’t changed anything and we’re still looking for people. We have to keep pace with what’s going on with the business.
Does itX have any key business initiatives in store this year?
GN: We typically set our plans at the start of the fi nancial year, so we have a plan and budget already in place and are executing on that. From April through to June, we’ll evaluate our business model based on what we see the market doing and make adjustments for the following fi nancial year.
What’s your key area of focus? And has this changed since you listed on the ASX?
GN: We concentrate a lot on the basics and try and focus on doing those things really well. We’re still trying to grow our business where it makes sense. We’re not after world domination, we’re trying to grow strategically and will continue to look for those opportunities as they come along. This environment may create more opportunities.
itX has taken some interesting new directions with the likes of the Nexos restructure, acquisition of ICO Hosting, and specialist player, Briell Marketing.
GN: Briell is very niche and we’re keeping it as a separate line of business for that reason. ICO is a hosting business and gives us a lot of skills we can and are already starting to leverage, particularly around areas like SaaS [software-as-a-service] – a lot of vendors are talking about that and we made that acquisition as we could see that coming. It’s good to have those skills in-house and we are looking at how we can leverage that expertise with our current vendors. Nexos actually pre-dates the distribution business and there’s a lot of legacy in that area.