Dimension Data's blueprint for success

System integrator to increase services revenues with 'blue-collar' consulting

Dimension Data is aiming to grow its business through a combination of 'blue-collar' consulting and deals with niche technology players.

The system integrator's UK chief executive, Russell Bolan, said the strategy is designed to increase its services revenues.

In contrast to traditional 'white-collar' consulting, which Bolan said is based on paying consultants up front for reports without getting actual integration help, blue-collar consulting will see Dimension Data provide a more hands-on service.

Two years ago the company got 75 per cent of its revenue from technology, but now it gets about 65 per cent of its revenues from services.

Bolan said: "The issue for us is how aggressively do we pursue the move towards blue-collar consulting."

But he added that this doesn't mean the firm will move away from its fundamental business. "People will continue to invest in networking and infrastructure," he said.

Bolan added that Dimension Data is also looking to acquire or partner with small technology firms with niche applications.

He also warned that growth will be an issue for many rivals that have cut back.

"I think customers will still want value for money and more for less, and will become more ruthless," he said. "We're going to cope with this because we have already transitioned the company."

New vendor entrants into Data's core networking portfolio will shake up the market, Bolan claimed, particularly as demand for IP convergence combines traditional voice and data markets.

"A lot of the companies that are our competitors now won't be in a couple of years' time," he said.

Steve Blood, research director at Gartner, predicted that the IT services revenue that comes from IP telephony worldwide will grow to $20bn by 2007, up from $10bn today.

He said IT services firms and telcos are increasing their skills to focus on the arena.

Much of this will be driven by the complexity of combining voice and data networking, Blood added.

"It's not just about installing a PBX in a basement. Project management of [these projects] is critical," he said.

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