Service focus of new venture

By ADAM GIFFORD

Hitachi Data Systems executives Roger Cockayne and Wayne Norrie have bought a 51 per cent stake in the New Zealand subsidiary of the global storage giant.

Norrie, who will be the chief operating officer, said the new joint venture would focus more on services than hardware sales.

"All the multinationals struggle to shoehorn what works in the United States or Europe into our small geography," Norrie said.

"A lot of Hitachi's top-end hardware does not fit here, so about four years ago we moved into services. It now accounts for 70 per cent of our business.

"In doing that we created something valuable and exciting, but it didn't fit in the global multinational profile. So we said cut us loose and let us grow."

Norrie would not disclose the value of the deal, but said it was designed so both parties won.

Companies Office records reveal Hitachi Data Systems New Zealand made a $856,277 profit last year on revenue of $14,217,116.

The 5 million $1 shares were owned by the Australian subsidiary, Hitachi Data Systems Pty, but a $4,523,701 accumulated deficit meant equity was only $476,299.

Norrie said the company would retain the HDS abbreviation but would be renamed Hosting and Datacentre Services.

"We have developed, built and rolled out the concept of the virtual data centre, offering centralised IT services for a fraction of the price they used to be," he said.

"We find we can offer services at less than half the price of our competitors. It means we can take data centre services to tier two companies at a price they can afford."

Customers include Eftpos, Tower Insurance, Tower Managed Funds and UnitedNetworks.

Norrie said it had cost almost $6 million to build up the virtual data centres, which were housed at centres in central Auckland, Takapuna and Wellington.

He said the company intended to close the Airedale St operation, and to "tune" staffing numbers from 40 to about 35.

HDS will continue selling its tier one storage systems to tier one customers.