blog Those who’ve been following the IT services market in Australia for some time will not be surprised by the concept that Optus subsidiary Alphawest hasn’t precisely been its own independent agent since the telco bought it in mid-2005. Since that time, Alphawest and the business division of Optus have been becoming increasingly closer, to the point where they’ve appeared almost indistinguishable. Where did Optus Business end, and Alphawest begin? It’s been hard to know for some time. And now, according to an Optus media release issued yesterday, there is no difference. Alphawest is Optus. Optus is Alphawest. It’s a giant “synergy”, or “integration of some kind” ;) You can get the specifics from Optus’ statement yesterday here (PDF). A few sample paragraphs:
“Optus Business today announced a new structure, that combines its strengths in telecommunications and IT services with the integration of Alphawest, and leverages the deep expertise and experience in application development and consulting of SingTel subsidiary NCS.
The integration of its IT services arm Alphawest into Optus Business creates a single ICT organisation that is designed to serve the end-to-end needs of the Australian business and government market. In the new structure, Optus Business will align with NCS in Australia with a specific focus on delivering business application services for its customers.
John Paitaridis, Managing Director, Optus Business said “The integration of Optus Business and Alphawest, and the alignment of NCS in Australia, brings together the strength of our telecommunications and ICT capabilities under one roof.
“When combined with the leadership and scale of SingTel Group Enterprise, our customers can leverage leading regional solutions, managed services and the Group’s global network reach for a more seamless ICT experience across the Asia Pacific region.
“We now serve the needs of more than 3,000 business and government customers across the country, from medium-sized businesses such as Suretek, right through to some of the largest enterprises such as Toll and government organisations including the Australian Tax Office. Together, as Optus Business, we are bringing all of our expertise, capabilities and solutions to the table in order to meet our customers’ unique needs,” Mr Paitaridis added.”
To our mind, what’s going on here is Optus restructuring its business-focused operations along two lines. Firstly, and perhaps most importantly in the mind of Optus parent SingTel, Optus appears to be trying to strengthen the links between its own business dividsions and the NCS IT services business which SingTel also operates in Australia (in quite a low-profile way). Secondly, with its new focus on “network-centric ICT solutions and managed services”, Optus appears to be trying to match Telstra’s renewed focus on what its chief executive David Thodey calls “network applications and services” — IT platforms such as Infrastructure as a Service which fit in with a telco’s telecommunications services.
For both telcos, this is a somewhat risky strategy. There just isn’t much evidence yet that major enterprises actually want to buy any kind of traditional IT services from telcos — instead, most have preferred to buy such services from pure-play providers such as HP, IBM, Fujitsu, CSC and so on. Certainly the cloud computing strategies unleashed by Telstra and Optus over the past several years haven’t precisely set the local market on fire. It’ll be interesting to see how the scene plays out in the next couple of years.