Dimension Data Makes a Move

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Dimension Data Makes a Move

I learned about Dimension Data a VoiceCon event. They had an interesting booth. They are a South African company doing more than $4B in revenue as a global VAR for Cisco, Microsoft, McAfee, TEM, HP, EMC, VMWare, Blue Coat and more. I didn't know that NTT bought the company outright in 2010 for GBP 2.1B. Today, Dimension Data announced that they purchased OpSource, an enterprise cloud company out of Santa Clara, California. DD already owns a few data centers around the world, including Brazil. And NTT owns a few. NTT has had a relationship with OpSource since 2008. It's the worldwide focus on Cloud that is igniting some of the M&A.

Yesterday, TDS bought OneNeck IT to add to its collection of VISI and TEAM. TWCable bought Navisite. Windstream bought Hosting Solutions. CenturyTel bought Savvis. Verizon bought Terremark. All of this is that the network operators don't want to just be a dump pipe selling Layer 1-3. The real money -- and the stickiness - is in Apps (Layer 7 of OSI), the Cloud, servers, data, storage. If you have their data, well, you have their attention.

Even the distributors like Tech Data, SYNNEX and Ingram know that just selling gear is a highway that will end. Somewhere down that road the bridge is out. Businesses aren't buying the same number of servers, laptops, desktops, and related gear like switches and routers. Instead smartphones, tablets, VMware and SAAS are being purchased. That shift is causing the distributors to also shift to Cloud. This will be a painful play. It's an entire shift in the whole business model. Instead of being a distributor for manufacturers, you now try to become a back-office and marketing company for Cloud providers. Ouch! But everything is going Cloud, so jump on that magic carpet now.

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