Dimension Data comes back home

Dimension Data is one of South Africa’s great survivors. A pioneer in its day, the technology giant listed on the JSE in 1987, long before tech became trendy. Guided by a team of brilliant young executives it grew exponentially both organically and via acquisition and began to expand globally from the mid-1990s onwards.

But then naked ambition, arrogance and greed overcame the brilliance, and debt began to climb while profit tumbled. When these factors combined with the dotcom crisis of 2001, investors jumped ship in their droves – notably after the executives – and the share price collapsed from R70 to R2.

To their credit, management led by founding director Jeremy Ord stopped grandstanding and put their shoulders to the wheel, rebuilding trust and profitability in the process. In 2004 Brett Dawson took the reins while Ord stepped into the role of executive chairman.

In 2010 their efforts were recognised and rewarded by global telecommunications giant NTT, which acquired Didata, as it is locally known, for R24.2-billion and delisted it from the JSE and the London Stock Exchange, where it had been listed for 10 years. 

Sucked into the behemoth that was NTT, with multiple brands and companies, Dimension Data slipped from public consciousness, with the brand perhaps kept alive by Team Dimension Data, whose successes on the world cycling tour made South Africans proud.

But this is going to change.

The company has announced that it will in future operate under one name, Dimension Data, to better serve its clients. In the process, it will lose familiar brand names like Internet Solutions, founded by four Wits students in 1993, and acquired by Didata in 1997;  software firm Britehouse and Continuity SA.

“Technology convergence is blurring the lines between our companies and the disparate brands began to overlap in terms of the services they were providing to clients,” says Dimension Data CEO Grant Bodley. With technology and services housed in different silos, the different brands began to duplicate each other’s offerings and in effect, compete with one another. This resulted in client confusion and frustration.

“Our clients were saying that they wanted to do business with ‘Dimension Data’, not an associate or subsidiary of Dimension Data,” he adds. “They wanted simplicity.”

This thinking mirrors a process of reorganisation at parent NTT that began in 2019.

There, in a bid to reorganise its sprawling empire, the parent company created NTT Ltd, which saw 28 disparate brands, including Dimension Data, merged to create an IT services giant headquartered in London.

“In October these were all rebranded as NTT Ltd, with the exception of Dimension Data’s Middle East and Africa operations,” Bodley says.

There were good reasons for this.

“NTT has less brand equity in Africa, while the Dimension Data brand still carries tremendous value in South Africa, and increasingly in East Africa and the Middle East,” he says.

In addition in 2019, the local company restructured its BEE relationships, creating a staff trust and selling the Didata Campus in Bryanston to an all-woman empowerment consortium. In the process, it became a Level 2 BEE supplier. NTT, of course, retains a majority stake in the business.

Dimension Data is a  sizeable enterprise with more than 20,000 employees and R17-billion of annual revenue.

The collapse of the brands into one means duplications will result and a new management structure is inevitable. 

“We will bed down the organisational design between April and July and will retire the brands by October. This isn’t a process that can be completed overnight,” says Bodley.

The restructure is not about cost-cutting, but about reigniting growth. 

The SA business contributes about 70% of the revenue, and East Africa provides a large proportion of the balance, but the fastest-growing part of the business is the Middle East.

“Our focus is on growing the company in these regions – we want to be the most referenceable IT brand on the continent,” says Bodley.

“In many ways, this is a homecoming. We are going back to our roots.”

What is notable about this homecoming, however, is that Dimension Data is returning with its head held high.

Oh, and on the subject of listing, a return to the JSE is not on the cards for the foreseeable future. Though Bodley says, “never say never”. BM