While Dimension Data’s worldwide relationship with Cisco Systems remains its key strength, the SA tech firm's ability to implement solutions in emerging markets like Africa and Asia will remain an important competitive advantage.
This is the view of Frost & Sullivan following the release today of DiData's annual results which stated that revenue growth in Asia and the Middle East & Africa was “exceptional”. Revenue from Asia grew 23.9% over the previous reporting period, while the Middle East & Africa region grew revenue by 27.1%.
“DiData’s 100% acquisition of its subsidiary Datacraft in Asia will enhance its ability to generate revenues in that market,” says Frost & Sullivan ICT analyst Spiwe Chireka. “They now have a very strong competitive position in the key markets in Asia, with a footprint spanning 13 countries and long-term vendor partnerships.”
DiData has increased its focus on emerging markets in recent years, diversifying into regions such as the Middle East, East Africa and South America. Much of this expansion has been through acquisitions or partnership, with the group enforcing minimal if any a changes to these existing operations. This has been crucial for business continuity and ensuring that the time to market for its services and products has been minimised.
“DiData has mastered the skill of leveraging off existing operations for its future growth,” says Chireka. “The company’s approach to partner with or acquire operators with experience in their respective markets will continue to yield good benefits in places like Africa, where setting up operations from scratch can be a challenge.”
These operations in emerging markets will be vital sources of revenue over the next few years. Chireka believes that DiData’s wide geographical positioning means that growth in developing regions will balance out any declines in mature markets brought about by the current financial crisis.
South Africa could also be a significant area of growth for the company.
“Internet Solutions – South Africa's largest corporate internet service provider – will soon be able to compete more aggressively with the incumbent Telkom and other telecoms providers,” explains Chireka. “This is because it may be able to transmit voice calls through data networks. We expect Internet Solutions to remain a significant income generator for the DiData group.”
Investors are beginning to look with greater interest in DiData as the company is finally shaking off the negative connotations of the dot.com slump. Its diversified portfolio and strong relationship with Cisco Sytems mean that its growth prospects remain good, even in a difficult economic environment. There is a growing sentiment that the firm is a better business now than it was at the height of its share price in 2000.