Vested interests, and the daily cut and thrust of the IT industry

Chris Quin

For Chris Quin, group general manager of Gen-I, the IT services market is much like the game of rugby, where foes are sometimes friends.

The market was not unlike membership of a Lions team: sometimes you played together, at other times you competed against each other.

The question, since Telecom bought Gen-I almost exactly a year ago, was how well the company would get along with some of the other players in the game.

US-based information technology services giant EDS had been supplying Telecom with much of its IT help, so there were concerns about how the two companies would work with and against each other.

But apart from a shift of some desktop services management from EDS to Gen-I in April, the two have managed to peacefully co-exist. EDS recently renewed its deal with Telecom, indicating room for both.

"It's the IT market, so you compete tomorrow and incorporate the day after. People are very mature and used to that model," Quin says, adding the two firms haven't gone head-to-head more than two or three times in a year. "You have the appropriate Chinese walls in your relationship and you get on with business."

Telecom acquired Gen-I in June last year for $62.5 million and merged the company with its own IT subsidiary, Advanced Solutions. That move was followed a month later with another purchase, this time of Computerland for $26 million.

The moves were made, Quin says, because Telecom was looking to grow its own IT service offerings quickly. The company was well positioned in offering telecommunications IT, but was lacking in other areas. Customers are tending toward integrating both types of services, so the acquisition "made sense".

"The whole purpose of this wasn't buying three, pushing them together and stripping out costs. It was [because] we needed this capability to continue our growth," Quin says.

The combined entity has managed to retain its staff levels, Quin says, at about the 1400 they started with.

Quin had been running Advanced Solutions and took over the combined entity when the firms were merged. He says he has spent much of the past year integrating Advanced Solutions and Gen-I.

"We've pretty much completed that in terms of the reporting lines and structural things, so it's now operating as one business," he says. The same process has just started with Computerland, but he's being "slow and careful" because of the differences in systems and cultures.

A decision has yet to be made whether to keep the Gen-I and Computerland brand names; Quin says their long-term fates will be decided in the next few months.

Gen-I has typically dealt with bigger customers, those with 250 employees or more. They , and customers include Air New Zealand and Genesis Energy. Computerland, meanwhile, has focused on smaller operations, such as those with 50 to 80 employees. Customers include AMP and Auckland University.

Quin agrees that the brand names could be used to label different services or approaches, but "the thing that plays back against that, is when you're doing a national deal with a customer who's looking for a consistent service delivery model right across all their locations, then they'll want one brand for that."

The integration isn't finished yet, Quin says, but overall he's happy with how the past year has gone.

"One of your first fears around mergers, particularly in services businesses, is are you able to attract and keep the people who make up the business," he says.