CRN Interview: Jeremy Ord, Dimension Data

Jeremy Ord, executive chairman of the newly formed Dimension Data/Proxicom, officially introduced the new company to analysts during a meeting last week at the Massachusetts Institute of Technology in Cambridge, Mass.

Following the meeting, Ord sat down exclusively with CRN's Marie Lingblom to talk about the new company's corporate culture, business strategy and goals in North America.

CRN: How would you describe Dimension Data's corporate culture and how well that will mix with the culture of Proxicom?

Ord: You need to understand the background of Dimension Data. It's a company that really started out in the Netware business but had to be very self-sufficient because South Africa, in those days [early 1980s], was very isolated, so there was minimal support. What you really found from a cultural point of view was that our guys went out there, understood the technology, had very, very good understanding of the computer network services business and developed a lot of methodologies--particularly the marketing level and the sales level--that have allowed us to globalize the company. In the early days we didn't have the benefit or the luxury or being able to develop side by side with manufacturers as they put out new products, so we've always had to be very self-sufficient.

So what has that left us? I think it has left us as a very independently minded company. When it comes to the manufacturers, we believe very firmly that business units must perform and they must be profitable. Secondly, we believe our people need to work very hard, and we've got some great people--a combination of technical people, professional people. At the end of the day, they must enjoy each other's company, and the biggest single feature I can talk about with our company is teamwork. It's very, very important that we have people who are team players and so there's always been a strong emphasis on people who play sport.

As far as Proxicom goes, we've just seen wonderful people. They are very, very comparable with us--[they] have a similar vision of the marketplace moving forward--and [are] people who are very dedicated to making a success of what they do. The other thing with Proxicom, if we are talking about the company specifically, is it's a company that did not have a large amount of dot-com clients. The large companies who have a specific e-business strategy is the type of client base that they are operating with, and that's exactly the client base we are going after, so there was a strong degree of compatibility.

CRN: What kind of partners, new partners will Dimension Data/Proxicom seek? Any particular certifications that are most attractive?

Ord: One of the most important things for us is we have to continually understand the movement in technology and the change in flavor, if you like, in terms of technology, be it Java or XML, whatever it is. That's one of the biggest tasks we have is to constantly understand those changes in technology. One of the big issues people talk about is wireless communication, wireless applications and how they are very different to what you are doing today. Well, they're not very different. We look for people with generic skills that we are able to train and retrain and bring them up to date with the latest technology. [In] our networking arm of 4,000-odd engineers, a large amount of them are Cisco CCIE [communications and services] certified, but tomorrow Cisco may not be the right type of education skill or requirement, so we need to retrain them. It's a constantly changing environment, and we just have to be prepared.

CRN: What are the top three skills sets Dimension Data acquires with Proxicom?

Ord: Twenty percent of their skills, or slightly less, are creative skills. Another 20 percent are consultancy-type skills, and the balance are integration skills--integrating the back-end applications to the front end--and that's really the most important skill set we require.

CRN: How valuable is it for Dimension Data to purchase brand and identity, and what specific benefit does it present for Dimension Data, a much larger company than Proxicom?

Ord: Proxicom has got a great brand and has built a lot of robust systems for corporations in North America. Quite frankly, for us to come in on day one and say, 'OK, now you're Dimension Data' would be destroying a lot of the value in that brand. We want to extract and make some value out of the brand, get the relationships going, get the client base to understand that it's Dimension Data/Proxicom going forward and ultimately it will change its name to Dimension Data. To kill it overnight would be disastrous. It's a very strong brand with a great client base. We must utilize that and take advantage of the goodwill it has created and slowly, over time, evolve it to Dimension Data.

CRN: Are there other acquisitions in mind? There has been a previous expression from the company about a desire to expand Dimension Data's footprint to the Midwest and West Coast of the United States and a strategy to acquire certain skill sets. Does that still hold true?

Ord: We're going through a consolidation phase right now where we're putting a network services business and the Proxicom business together and Raul [Fernandez, CEO of Proxicom] and the team are busy working right now to put that together. With Proxicom, they've got a presence in, for example, Houston, San Francisco and Los Angeles. One of the things we may do--and I think there's a strong likelihood--is we have the infrastructure now and offices in all those areas and we may go for more organic growth in the short term. In other words, start businesses in those areas and then network [the] services business and put people in those positions and piggyback off Proxicom's base in those markets. So we may make a few smaller point acquisitions in certain technologies but, to a large extent, the management team here is going to be looking to rationalize business from a back-end point of view and then just take a look at market opportunities or grow organically.

CRN: There has been much talk about competition and price-slashing by consultants [who are] perhaps a little desperate to get business. Is it an issue for Dimension Data?

Ord: It is an issue, and certainly I think it's an issue for Proxicom. Certainly, the large consultancy houses do have excess capacity and have certainly been going out in the market and giving away work, or offering work at very reduced prices or sometimes even virtually free. Certainly in discussions during the past week with global financial services companies, in New York specifically, they're going through the phase of renegotiating their contracts with all of these companies in terms of the hourly billable rate, etc. One of the greatest advantages we have is because of our strong application presence in South Africa and India, we're able to give very, very cost-effective solutions back to the market. High-level people doing high-level work in New York or elsewhere, but a lot of the code-cutting is taking place in South Africa or other environments that are very cost-effective.

Every financial services company I've spoken to has some sort of relationship with some sort of software house, specifically the case I mention is in India, and we are able to offer that much more in a broader range of skills in different environments. Certainly from Proxicom's point of view, they've seen that as a major advantage for them in the market.

CRN: Other major trends or issues important to Dimension Data/Proxicom at this time?

Ord: I think we've long held the belief the intelligent-network and the infrastructure applications that are layered on top of it are really the way the market is going to move. So that's specifically one area we feel strongly about. I think our network services experience and the fact we've developed this global services operating arm gives us a distinct advantage. It's something we know we need to capitalize on, both in North American with the large multi-national and in other markets. That's really what we're trying to do.

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