Simon Hackett quits Internode for iiNet board


news Long-time Internode managing director Simon Hackett has broken his pledge to customers that he would continue to lead the company he founded after its acquisition, signalling today his intention to leave his formal executive role at Internode and instead take up a role on the board of Internode’s new parent iiNet.

Rumours about Hackett’s departure from Internode first surfaced on May 18 this year. At the time, neither iiNet nor Hackett himself would confirm or deny the rumours on the record, instead highlighting the shift of Internode executive John Lindsay into the chief technology officer role at iiNet. However, in a statement issued this afternoon, Hackett noted that he “intends to leave his executive role” at the company to join the iiNet board in August 2012.

It is believed that Hackett could not have remained an executive at Internode while taking up a position on the iiNet board as well, as such a role would have placed Hackett in a conflict of interest position, both reporting to iiNet’s executives and/or board in his managing director role while also sitting on the board which oversees such executives. Hackett’s board position is backed by the substantial weight of iiNet shares which the executive acquired as part of the iiNet acquisition of Internode in December 2011.

In this afternoon’s statement, Hackett said the technical integration between iiNet and Internode’s systems had gone “much faster” than he expected. “While I will continue to represent Internode as I always have, I am keen to contribute at a group level, influencing the strategy of the entire iiNet group,” he said.

The move comes despite the fact that Hackett had assured customers when the iiNet acquisition was announced that he would not leave the company following the buyout. “Internode will be remaining as a separate operating company within the group, with its own identity, and its own staff,” he said in an extensive blog post on Internode’s company blog at the time. “I am staying at the helm of Internode, as is the rest of the management structure of the Internode & Agile company group.”

Hackett’s move to leave executive duties at the company he founded several decades ago in Adelaide comes as part of a wider restructure that will leave the ISP without formal leadership within the broader iiNet Group, and again run counter to Hackett’s statements about Internode’s management remaining in place following the acquisition.

Internode’s statement this morning also revealed that the company’s low-profile chief executive Patrick Tapper would leave the company at the end of July in order to move to Queensland and spend more time with his family. Earlier this month, it was revealed that iiNet’s gaming network 3FL would merge into Internode’s service, with Internode stalwart Heidi Angove to head the combined games network. In addition, this morning it was revealed that Internode’s general manager Business and Government Daryl Knight will now take on this role for the entire group, reporting to Greg Bader, CEO of iiNet Business. Hackett, Lindsay, Angove and Knight will remain based in Adelaide, according to the statement.

In its statement today, Internode made no mention of a process to replace either Hackett or Tapper, meaning the company will shortly have no formal independent executive leadership of its operations.

iiNet CEO Michael Malone today said of Hackett’s move: “Simon Hackett has an enormous amount of experience and credibility in the industry. We are very pleased that he is willing to step up and join the board.”

Further integration
The restructure comes as iiNet and Internode continue to increasingly tie their operations together.

In March iiNet introduced Internode’s data blocks feature to its own broadband plan structure, and then several weeks later iiNet also dumped the on-peak/off-peak split of its broadband plans, offering customers the same base system as Internode has long promoted for its own plans. Both moves came after Internode announced its intention in February to migrate customers using wholesale offerings from rival companies like Optus and Telstra to iiNet’s ADSL infrastructure where possible. With similar moves occurring on iiNet’s end, the move effectively integrates the ADSL infrastructure owned by the two broadband companies.

However, iiNet and Internode do retain separate operations in a number of areas. The pair’s wider plan structures remain separate, and each has a slightly different product offering set.

Hackett today said the technical integration of the iiNet and Internode networks had been extremely smooth. “I think it’s safe to say that the pace of integration of our networks and other systems has happened faster than anyone expected, which is a great thing,” he said.

“While it’s been mostly invisible to our customers, lots has happened to integrate our DSLAM backhaul, inter-capital and international networks, and to start carrying the combined Internode and iiNet traffic. Our customers have already started to benefit, with the delivery of seamless access to iiNet’s larger DSLAM coverage map being deployed for Internode customers at an impressive pace. This network integration is important because success in our industry really does require scale and efficiency, which means avoiding unnecessary duplication. We have much to do that can further benefit our customers, who love the great things about Internode, including our personality and innovative products, as well as our passion for customer service and service delivery excellence.

“Already the convergence of iiNet and Internode contains a healthy dose of Internode’s approach to business. Just take a look at the recent evolution of iiNet’s retail broadband plans! The excellent direct-managed Internode global IP network is already serving iiNet customers as well. In a very real sense, we can be proud that key parts of iiNet are benefitting from having ‘Internode Inside’. Our ultimate goal is to become a single, well-integrated organisation that operates multiple strong, respected and loved brands in the market. I’m looking forward to continuing to innovate and disrupt the Australian telecommunications market for the better.”

I am extremely disappointed that Simon Hackett has broken his promise to customers and left his role at Internode. I am also disappointed that Hackett’s pledge that Internode’s management structure would remain in place and that Internode would not simply become another iiNet portfolio brand appears to be withering by the day.

I know that Hackett will remain on iiNet’s board and that he will continue to influence the fate of Internode and the wider group. And that is a very positive thing. But that is not what he promised customers. He explicitly promised that he would continue to lead Internode and Internode’s management structure would remain in place. And just as clearly, this promise has been broken. A high-level board role at a company is very different from having an active, executive employment position. It is a very top-level strategic role, not an active employment role. Hackett may continue to work at the merged iiNet/Internode group, and he may continue to actively represent Internode in public. But there is very little doubt that his days as a daily active force at the company are over.

I don’t see this in itself as a problem. Hackett’s had a very long run at Internode and contributed an immense amount to Australia’s telecommunications landscape. We all owe him a debt of gratitude, and I personally count him as a living treasure of the telecommunications industry. If I were him, I would leave Internode behind following the acquisition, take a long break for a while, and then do something completely new with recharged batteries.

But none of this excuses the fact that Hackett has very publicly broken a pledge to customers about continuing to lead Internode, and we need to hold him to account on that. As tired as he probably as after twenty years leading Internode, it’s a promise he should never have made in the first place.

Image credit: Internode


  1. Addendum: I have received the following comment from Simon Hackett about his December 2011 pledge to keep Internode’s management structure intact:

    The statement was correct when it was made. We have subsequently taken the decision, in the light of the integration going as well as it has been, to evolve the approach and start infusing Internode into iiNet in the manner described in that press release.

    There is so much that is good about both Internode and iiNet and we felt it had become sensible to change our approach and start to more fully link them together.

    This is the start of that process, and its one that will take months (or possibly years) to fully complete.

    The starting steps, with John being promoted to CTO and my being on a path (from August) to changing roles and winding up on the iiNet board, are all great ways to make sure that what is great about Internode winds up being delivered into the whole iiNet group – there is a lot that is great about Internode and (as noted in the press release) a number of those things are already appearing as iiNet features and benefits today – and the reverse will also be true, with some missing pieces in the Internode armoury being on the way to being provided from iiNet’s facilities over the coming months.

      • I get to say “I told you so” even sooner than expected!

        Its not that people don’t understand that things change and as such plans change. People just don’t like being treated for fools and being told things that aren’t the complete picture.

        Surely in 5 months things haven’t changed so significantly that the explicit statement made at the time of the merger changed so distrinctly:

        “For us its ‘Business As Usual’ – only better (with deeper pockets, much greater scale, and greater resources to call upon when they are required). I will continue in my executive roles as MD and CTO at Internode, driving technical strategy and execution, alongside CEO Patrick Tapper and the rest of our great management team.”

        Perhaps they were correct at the time and the eventual plan would always be that Simon would step down and join the board. Omission of fact can be just as misleading as a straight out untruthful statement though.

        • That is what I am getting at. I was sure it would happen eventually, it’s only to be expected. But given how strongly he insisted that he would be running Internode for a long time yet and that he wasn’t going to do exactly what he has done. Well sure, a year or so later. This whole thing about how sucessfully they have integrated, seems more they have just started. They have moved Telstra DSLAM customers over, just starting to experiment with naked Optus and not sure how they will do Optus bundles. iiNet have been using parts of Internodes international connections with variable success. Some free zone integration. The big one is the integration of the Internode and iinet networks, particularly the overseas portion, and it seems he won’t be around when that happens. I am worried about the “complete integration” statement. That is what happened with other ISPs and the result was a lot of people leaving for Internode as iiNet didn’t seem interested in fixing issues that occured when people were migrated. Now there is not an option for a high quality ISP if iiNet drops the ball again.

        • The correlation between the soon to be ex Chief Executives surname and the traditional shoulder action encouraging ‘spending more time with the family’ would appear to be a trifle unfortunate…

  2. Hah! Just as l predicted.

    Transaction bedded down, PR spin passed its use-by date… time to jump.

  3. People move on to different opportunities that life deal with it he aint going to live forever.
    Some might think he has the control of the little red button to nuke the entire earth……

  4. hmmm.
    Until Internode does me wrong (or the NBN drops on my doorstep and radically changes the game) I’ll stay with them.

    But yeah, its hard to not be cynical about this.
    Fellow cynics called this, and their future predictions seem probable as well.

    • Yeah I feel the same way, about staying with node until something goes wrong I mean, even then it’d have to be something pretty big, I’m no node fanboi but their service (for me) has been flawless for coming up on 10 years.

  5. While I agree it is disappointing I find it bizarre that we don’t allow people to change decisions based on new information available to them. You wouldn’t expect the original decision to remain in place in say ten years would you? 6 months is a little quicker than I expected granted but I was never expecting the duplication presented by having a full executive at Internode to last beyond the end of this year.

  6. You know, I’m surprised that anyone is surprised by this.

    This is the normal process of M&A. Fact is, that Internode is not an independent entity anymore and it doesn’t make sense for it to have an executive management. At the end of the day, the post-merger Internode is nothing other than a sub-brand of iiNet.

    The fact that so many Internode executives have taken up positions at iiNet is a good sign. Instead of mass exodus of the previous management team that usually follows such acquisitions, Internode’s talent and skill is being firmly integrated into iiNet, and that is the best outcome that anyone could have wished for, out of this acquisition.

    • In terms of broader competition in the telco market, it is a bad long-term result that a strong player like Internode has now broadly been subsumed into a competitor.

      In terms of the other stuff … it’s not all bad, as you note — and it is the normal process. But the fact remains that it runs directly contrary to what Internode told its customers. That shows a lack of integrity and should (as I have) be pointed out.

  7. It seems a shame, but does it not make sense? He can remain a big fish in a small pond .. or wield influence on the whole iiNet group. Presumably a considerable amount. I’m not really seeing it as a particularly bad thing.

  8. Just as I don’t believe Julia Gillard lied when she said there wouldn’t be a carbon tax under a government she would lead, I don’t believe Simon Hackett lied when he said the intended to stay on as MD of Internode. The fact is that time moves on, circumstances change, opportunities arise that make people change their mind for good and valid reasons. Simon obviously feels that he has done enough to make the integration of Internode into iiNet a smooth one. He now needs another challenge, i.e. to improve iiNet as a whole and put his personal stamp on the company. I feel his considerable talent would be wasted if he stayed on as MD of Internode. The time has come for him to go on to fry even bigger fish. I wish him the best of luck. May he continue to be a driving force in the Australian telecommunications industry for many years to come.

    • The merger was anounced in December. They didn’t expect the papers to be finalised until February. It’s now 3 months on and all his “I am going to stay on as MD on Internode” is a thing of the past? I’d think if you told your customers that you were in it for the long haul then packed up and left in 3 months they would consider it “changing times” They’d call you a liar and deservedly so. In no way is the integration complete, it has barely begun.

      • The integration will be complete when Internode plans look like iiNet plans, which look like Netspace, AAPT and Westnet plans.

        That’s the problem with buyouts, the choice for a prospective BB buyer when it comes to plan variety is lost, I don’t know why AAPT, Westnet and Netspace exist as separate names anymore.

        • I don’t care if the plans are the same, they were very similar anyway. I care that Internode had a much better international network than iiNet. I would hate to see that lost because quite frankly for my use iiNet’s international connect was shit. Netspaces was better than iiNet’s and that’s saying something. My other issue with iiNet is the amount of time they leave things broken. GomTV is broaken, virtually zero communication. Big thread complaining about lag spikes, packet loss to the US, went for months while they “fiddled”, it seemed to more fix itself than any conscious fix by iiNet. A large part of it is they realy heavily on Telstra and have little control over their international link.

          • Similiar is not the same as mirror image, have look at the iiNet, Netspace and Westpac plans and tell me how you decide which one to sign up for – roll the dice?

            Your reference to network differentiation is lost if you are part of the iiNet group, the network is in reality all iiNet, iiNet customers are using Internode links and vice versa.

          • You are incorrect alain. Currently Internode use different international connections to iiNet. They have moved some iiNet traffic on Internodes international links. My worry is they MAY sometime in the future route Internode traffic through iiNet’s international links and from experience they are way below the standard on Internodes links.

            Agreed on those plans. Netspace, etc, have effectively ceased to exist, there is nothing left of them but a name and web front end. I would hate to see Internode bastardised in this fashion. They had a superior product.

          • I would have thought that one of the reasons for purchasing Internode was so iiNet gained access to the Agile international infrastructure. You would have to be a total muppet not to utilise both sets of international links!

  9. Got a link to where he promised it was for the rest of eternity? Is there a set minimum period after which you would have not paid any attention to the change?

      • Is it a broken promise because he moved from managing Internode directly to the board of the parent company (to manage at arm’s length) after 5 months instead of 12, or is it a broken promise because he moved at all?

        • Because he moved so soon. He said he would be staying on and would oversea the integration. The integration has barely begun.

    • About a year as Renai said. Based on your posting on Whirlpool your quite the fanboi, so try and see it from a customers point of view, one that doesn’t have an need to see Simon as a saint. A LOT of people were screwed over by iiNet when they bought out their ISPs. Many of them went to Internode. Simon says “I am remaining MD of Internode”, that he intended the same sort of thing didn’t happen, that the high quality of service that people moved to Internode remained. Oh sure he is on the board, but he is one or many and someone else decides the quality of Internode’s service. At least he could have hung around until the integration was complete. So we have had some Telstra customers moved to iiNet DSLAMs, some free zone IP addresses mapped so we aren’t charged. There is a LONG way to go, including the all importent international network to integrate. Do you want to end up on iiNet’s Reach connection with all the complaints people have with it? Unwatchable GomTV, latancy spikes on gaming, unexplained slow web sites with bad return routing. It is rare for Internode to have problems, when they do they fix it and say so. iiNet’s staff seem to stuff around for ever not achieving much because they haven’t got their own network. How can the number 2 in Australian ADSL2 broadband not have their own POP in other countries? They are a little ISP who floated and bought up everyone else with equity. Seem it many times, the company doing the buying doesn’t have to be good, they just have to be good at convincing shareholders they are a good investment.

        • It effects you? It was a major factors in me leaving iiNet, plus slow evening speeds. I could barely watch the free stream, it would stutter and lose connection. Moved to node. I can watch two HQ streams at once (haven’t tried more, download, surf the web, play an online game, all at once with no hicups. I would hate to lose that to iiNet/Internode network integration. If the international link of Internode ends up like iiNet’s where is there to go left? Dodo? TPG? Exetel? Hardly renouned for there overly generous international provionsing. As far as I can see if Internode fails I have one choice, Telstra. If it doesn’t pan out I am on a 2 year contract. One of the reasons I never tried TPG to see if I was one of the lucky ones who didn’t get evening slowdown, getting stuck on a two year contract.

          • My initial netspace account was forcibly converted to an IINET plan post acquisition with uploads included and no data blocks.

            Its tough not to be cynical and jaded when everyone spouts untruths at customers thinking its what they want to hear.

            The information provided to Netspace customers after the merger:

            Will my service/plan change?
            No, it will be business as usual with Netspace’s offerings remaining independent of iiNet. Overtime, it is anticipated that Netspace will be able to leverage off a number of iiNet product innovations, eg IPTV.

            Will iiNet be integrating Netspace?
            From a customer perspective it will be business as usual. iiNet intend to run Netspace as a wholly owned subsidiary.

            At least this process was carried out over a period of years, no so quickly that people still remember the promises to the contrary as have occurred at internode.

          • I was an on Netspace at the time. Netspace wasn’t the best ISP in the world but it worked reasonably. They moved me onto the iiNet network. Worst service ever. 50KB/s from iiNet ftp server of an evening and that was a fast download compared to everything else. No GomTV, I had to watch on a Dodo 3G dongle. 4 months of those put onto Telstra DSLAMs like I was trying to get iiNet to fix it. Not one DSLAM, all over the country. No one was interested in fixing it so the majority left for Internode. We were told by reps that we weren’t profitable because we were moved to Telstra. A couple suggested for us to churn to other ISPs because a fix was unlikely. The little info we could gather pointed to us being stuck of Telstra DSLAMs with absolutely minimum backhaul provided.
            This is where I respect Internode and dislike how iiNet and some other ISPs work. Internode have had problems like this, but they tell you what the issue is. If the plan price is too low and they would make a loss they put the price up, not sneakily reduce costs and leave you with a crippled service.

        • Why don’t you do an article on it? It’s only fair, there is a thread in the whirlpool iiNet forum going back to June last year where people have been asking them to fix it. They have been trying to provide as much information that they can. iiNet rep responses have been few and far between. Those that say they will look into it go missing in action. Just seems like they aren’t interested in fixing it or that it is an problem with how their international traffic flow behaves that they just can’t fix. Seems it may have to do with packets being dropped in international links as a form of congestion control. Telstra seem to do this on their exchange backhaul, maybe it’s how they do it on international links. Seems to be the big difference between iiNet and other ISPs. Use of Telstra Reach for traffic to the US.

          • We will have to agree to disagree. I’ll give you a reminder if the problem is still ongoing by the end of the year. Hell it’s been almost a year already, what’s another 7 months :)

  10. Well The Borg line from Star Trek The Next Generation seems to, becoming more apt by the day. “We are The iiBorg resistance is futile.”

    Very much a shame really, so much for competition, and well what Malone and Hackett say and do would make any politician proud.

  11. I was one of the first people in Adelaide to get onboard with internode, using their dialup product shortly after they started to offer it to residential customers. I have had a very long relationship with them as a customer, promoting them and getting others to sign up.
    Over the last few years I have become tired of the cult of Hackett, having seen less and less of the behaviour which once made internode a company to admire (and recommend). Nowadays I look on that company with slight distaste – caused mostly by their rabid fanbois.
    Hackett himself has turned into someone who is more spin than substance, and his public commentary has gone from insightful to being more typified by his somewhat bizarre rants about the NBN.
    I am glad that Hackett is stepping away now, so that I can keep the somewhat fond memories of what he has done and accomplished in the past.

    • The fanbois, they are terrible. But every ISP seems to have them. They are at there worst if, god forbid, they have been screwed around by their “precious” and dare to complain on whirlpool. It’s like a bunch of soccer supporters acting as if you shouted that their favourite team sucks. I have seen quite valid complaints, people who are still without their internet working harassed mercilessly. All sorts of inuendo that they are lying, no help, just bullying.

      • Yes you post negative comment in the Internode forum at your peril, the moderators will hound you out as well.

        • Actually I notice Renai tried a post and was fanboi’d. It was obvious to any reasonable person that Simon was planning to stay around for a while, not a few months. Of course the fanboi’s use excuses like he didn’t say “I promise”. If he did promise there would be posts saying that he must have had his fingers crossed.

    • Actually, their is one fanboi I dislike morre than the Internode/iiNet fanboi. The TPG fanboi. The forums are full of people complaining about the TPG evening congestion. These fanbois post repeatedly “Nothing wrong with TPG I get XMb on my torrents :P” The only plus is you know you will see those same people crying like babies when it happens to them eventually.

      • Interesting, I haven’t seen them, but then I haven’t poked around there too much lately. The behaviour you describe sure sounds familiar though.

        Internode remain the only ISP I have encountered with fanbois that spill over from Whirlpool and infect other tech sites.

        • LOL, careful, I might be one. I am with Internode. I think they are probably the best ISP… But they can and do stuff up sometimes and if someone wants to complain, let them. They aren’t saints.

          • I might be one of those tpg fanboys.

            Lucky enough not to get evening slowdown!

            Not a fanboy as such though, because I had had issues in the past, directly related to their policies. (when I started with them, their transparent proxy was faulty as all hell, was funny getting 1kb per second via http, but 2mb per second via FTP). But that was nearly 5 years ago now.

            Since then my exchange has remained fairly stable. And I will state what I always state when the haters show up. If you want cheap, get TPG. If you want fast get internode. If you are made of money get Telstra. Most people couldn’t care less that their torrents go 200k per sec during peak hours, as long as they save 20 dollars per month and don’t get shaped. (200k is better than 128kbps)

          • Exactly, it ISPs for particular reasons. I use my net of an evening for HQ video streaming so TPG is not likely to be what I am after. I wouldn’t go around saying to everyone who mentions TPG to stay away, they have huge evening slowdown, nor would I deny any TPG issues with this. If someone asked I would find out what they used their connection for and suggest the best alternative. Including TPG if they want large data volumes but aren’t evening gamers or video streamers.

      • Been with TPG to personally experience the situation have we, butch? Just love those non TPG users who love to throw in their 2 cents worth based on forum posts.

        • No I haven’t personally been on TPG, I have many work mates who are and I am not going to risk a 24 month contract to see if I get some of the problems they or the massive number of posters on TPG forum get. TPG is not likely to suitable for what I use my internet for.

          Not every ISP is suitable for each person. I would try TPG if they didn’t have those rediculous contract periods. Now piss off fanboi.

    • Paul
      Couldnt agree with you more-was with internode for a few years quite some time ago-left because the value plummeted compared to other isps,the rabid fanbois on whirlpool,and simon making a comment about TPGs then 20 gig plan being unsustainable at the price-he was later proven wrong.He started well but lost the plot along the way and appeared to become money hungry-thats his choice though.
      Sad really-it started off as a good company

  12. LOL some people really need to get out of the house and away from the internet from time to time and actually do something productive than sit on a computer all day and bitch….

  13. As an Internode customer I am happy to hear this news, just as I was happy to hear iiNet acquired Internode.

    Good things will come of this for the broadband industry.

  14. Simon has had a senior management team in place for some time; it’s not unsurprising.

    I don’t particularly see the sky falling; my internets has kept working and I’m yet to be surrounded by the mythical iiBorg cube, ready to consume my soul.

    It’s hardly surprising; I’d suggest all the effort Simon has and continues to invest into (either) business is only a good thing. Anyone else and I’d perhaps have concerns.

    As for infrastructure-based competition? It’s mostly-dead. NBN requires a different competition model; you can’t just throw your own NBN kit in now. I think that’s something that really needs to be given more consideration before the knee-jerk “I told you so, sky falling” shenanigans.

    There will be a considerable up-tick in such changes going forward.

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