Pedigree Chums

The three firms in Data Tec?s UK line-up are to be merged into one company with a strong pedigree. Steve Gold reports

In case you haven?t been reading PC Dealer?s news pages these past few months, South African distributor Data Tec has confirmed its plans to merge its UK subsidiaries to form a single company with five specialist product divisions.

At a press briefing in early January, Data Tec representatives confirmed plans announced last October to replace the three companies that Data Tec acquired ? Data Guardian, Volante and In- form Training.

Group MD John Chapman is ebullient about the company?s prospects for the coming year. He says it makes more sense to build up a single strong brand in the channel, rather than maintain three separate ones.

?Our aim is to double the size of the business over the next 12 months,? he says. This will be achieved by a high degree of cross-fertilisation between the three companies, along with a significant push to sign up more specialist dealers and to pitch for more business.

Interestingly, Data Tec has slotted Volante founder Richard Jackson into the position of MD at the company?s intranet division. Clive Cooper ? a face well-known in the channel ? will head the systems, products and services division.

Cooper is, by any standards, an industry veteran. The last time I spoke directly to him was in spring 93, when several modem vendors were offering the channel the then pre-V.34 modem standard of V.32 Terbo. At the time, Cooper said he was categorically refusing to handle V.32 Terbo modems within the Data Guardian operation, preferring instead to sell Motorola modems to the channel.

V.32 Terbo was an interim unofficial standard developed by 18 modem manufacturers in early 1993. The technology was developed as a stop-gap until the CCITT ? later to become the ITU ? could agree to ratify what we now know as the V.34 modem standard.

At the time, Cooper said he firmly believed that the then pre-V.34 modems, known as V.FC, offered better performance than the V.32 Terbo units on sale. He said that where V.32 Terbo was simply a tweaking of existing standards, V.FC and V.34 represented the future of the modem market.

Cooper?s stand on V.32 Terbo at the time was unique in the dealer channel. As time has proven, V.32 Terbo was rejected by the modem user community in favour of V.FC, which was well supported by Motorola and US Robotics (USR) and laid the foundation for the V.34 standard.

This perhaps explains Data Tec?s close allegiance with USR and the group?s South African connections with Motorola on the modem front.

Jackson, meanwhile, says he expects the intranet to form a major part of Data Tec?s operation in the coming year, as the market is largely untapped as far as the reseller channel is concerned.

Jackson has already enabled a deal with Netscape to allow Data Tec to offer real world intranet solutions through resellers and, perhaps surprisingly, Internet service providers (ISPs). He sees ISPs as capable of acting as resellers for the group?s intranet products and as consolidators for hardware, software and Internet bandwidth.

On the other side of the coin, resellers will handle the usual hardware and software products for intranet solutions, but add Internet bandwidth ? something that Jackson terms a commodity ? into the mix.

According to John Chapman, the Netscape agreement will allow Data Tec to offer a variety of intranet solutions through the reseller channel. He expects the company to play a major role in helping software developers to migrate their products from the Lan/Wan environment and over to the open standards of the intranet.

Chapman?s obvious enthusiasm for intranet solutions is mirrored by a report just out from IT research company Ovum that examines the role of intranets in the business communications market.

Ovum?s report, Intranets for Business Applications: User and Supplier Opportunities, is billed as anticipating the fusion of intranet technologies with the Internet as network service providers increasingly provide more secure and reliable connections over the Net.

Ashim Pal, senior consultant at Ovum and lead author of the report, says: ?Organisations, whether they like it or not, will get access to intranet technology as part of operating system and application upgrades. Therefore, the question is not whether to implement intranets, but how to implement them.?

Pal warns that Web technology alone is not enough to ensure successful implementation. ?To set up fully functional intranets, users need to consider how to integrate Web technology with their existing transaction-oriented business applications, their groupware and infrastructure services,? he explains.

?Similarly, suppliers must think about how to provide these integration services to allow intranet users to derive maximum benefit from both their Web technology and existing applications.?

According to the report, while Web technologies ? such as Web servers, browsers and Web-enabled applications ? promise a range of IT innovations, there is still a considerable gulf between what Web technology is today and what it has the potential to deliver in the future.

At present, Pal argues, most Web technology is used to simplify publication and distribution of documents, such as policy manuals and directories, telephone lists and expense forms.

?Today?s Web servers and browsers are a stepping stone to what organisations will require in the future,? says Pal. ?Key to future Web technology will be the capability to provide more interactivity in Web applications, management of session persistence, and increased integration with the business applications and services being run by organisations.?

Pal expects that intranet-based, intra-organisational applications will increasingly merge with Internet-based business-to-business transactions, EDI and electronic commerce transactions.

?Intranets and the Internet are today mostly separate pieces of infrastructure, owing to security and quality of network issues. But we anticipate that the distinction between the Internet and intranets will blur and eventually disappear as network service providers are increasingly able to offer reliable connections over the native Internet,? he says.

Back at Data Tec, Chapman claims the company is well placed in being able to bridge the gap between Netscape and resellers, especially for intranet solutions.

?Our role for Netscape would be to sign up developers using our traditional customer base,? he says, adding that the company intends to sign up about 150 resellers to the Netscape fold in the coming months. This will, he explains, allow Data Tec to act as a catalyst in bringing Netscape to the dealer channel, and ensure its success in the corporate world.

Data Tec?s solid push for Netscape?s products in the channel confirms plans laid down last November when Volante signed a deal with the producers of Navigator, at the same time as Ingram Micro inked its deal with the US Internet company.

While Ingram?s deal is a pan-European one for Netscape?s low-end products, the Volante deal allowed the company, and now Data Tec, to handle Netscape?s high-end products to the UK reseller channel.

Netscape?s products are handled by channel veterans such as Azlan and Sphinx Level V, as well as Cambridge-based Internet service provider Uunet Pipex. But it seems that Data Tec?s deal does not pose any problems because Data Tec intends to concentrate on the higher end of the market.

Chapman claims that Data Tec is well placed to promote its intranet solutions on a UK-wide basis. Plans call for the company to open a head office in Winnersh within the next few weeks, so consolidating the company?s existing operaion in Warrington. The company has also opened a sales and demonstration office in Edinburgh, to service the Scottish dealer channel as well as dealer customers.

?This will mean that a dealer has somewhere to take its customers to demonstrate products and services. This is im- portant, because having three locations across the UK means we are not simply servicing the southern side of England,? Chapman explains.

In addition to Data Tec?s deal with Netscape, the company has contracted with USR to handle the modem vendor?s complete range of products, right through to the high-end Ethernet switches and remote access hubs.

The deal is not entirely unexpected, given Data Tec chairman Jens Montanana?s previous involvements with USR over the past decade.

According to Montanana, in a press statement to the Johannesburg Stock Exchange last year when the Data Tec UK deal was announced, the plan is to establish Data Tec as a significant player in the networking solutions and services arena, initially in the UK and then in the international arena.

?We selected the UK market as the beach-head for international operations for several reasons, not least of which are the fact that it gives us access to up-to-date technology,? he says, adding that the UK employs similar marketing and distribution channel structures to South Africa.

Because of this, Montanana claims that the merging of the three companies into the Data Tec group ?is an appropriate way for Data Tec to leverage its relationships with manufacturers through facilities such as volume purchasing.?

According to Montanana, the deal with USR is a major one for Data Tec. It was the result of months of research involving many companies. By signing with USR, he says, Data Tec has picked an organisation with a similar pedigree to itself in terms of his-tory, its relationships with suppliers and philosophy and dis- tribution mentality.

?We aim to position the new company as a turnkey networking services group providing solutions through distribution to resellers and integrators requiring a total service incor-porating expertise, technology and training,? he says.

Montanana claims that Data Tec will concentrate on expanding the group?s existing areas over the next 12 months.

?With an annual turnover nearing #25 million, the Data Tec businesses will form one of that country?s largest networking distributors focusing specifically on high growth areas in communications and remote access targeted at the Internet/intranet market,? he says.

Montanana, who plans to split his time between the new Data Tec operation in the UK and the company?s existing operation in South Africa, sees a number of parallels between the dealer channels in the UK and South Africa.

He adds that Data Tec will represent many leading manufacturers and technologies that are already well established franchises within Data Tec South Africa, including USR, Motorola, Telebit and other vendors of networking and communications products.

?Data Tec?s customers include many blue chip organisations in telecommunications, utilities and government, and it has a very active presence in the Internet community where there are multiple players throughout the UK,? he says.

Resellers that are looking to deal with Data Tec, rather than Data Guardian or Volante, should visit the company?s South African Web site at http://www.datatec.co.za for more than a few pointers on how Montanana will probably steer the UK operation in the coming months.

As far as the dealer channel is concerned, Data Guardian and Volante are known quantities. But what about Inform, the Warrington-based training operation? How will that fit into the Data Tec operation.

Tony Graydon, the head of Inform and now the head of Data Tec?s training operations, sees a significant revenue earning potential for Data Tec and its resellers in offering training to channel customers.

?It is all very well selling hardware and software plus Internet and networking products and services to customers, but there is also the issue of how the staff of the customer company will gain experience in using their new systems,? he says.

?That?s where our training operation comes in, allowing Data Tec?s dealers to offer a professional level of training to customers, so generating added value for them, as well as extra business for Data Tec as a whole.?

Overall, it seems that by reforming the original group of three companies ? Data Guardian, Volante and Inform ? into five new divisions under the Data Tec umbrella has resulted in a pretty solid pedigree. Given the industry figures supporting the new name to the UK reseller channel, it has significant potential.

Some sources have suggested that there may have been some personality clashes within Data Tec. Despite rumours in some of the press, any such problems ? if they existed at all ? seem to have been resolved and the future for the company looks bright.