Why the Australian acquisition of a UK business is good for European businesses

With more and more companies looking to integrate solutions across the board, has this affected Telstra’s business offering?   

We’ve seen huge demand for services that will help support our customers’ digital transformation initiatives. Speed and agility have become ever more important for customers and this has resulted in increased demand for data storage and management, as well as SDN and NFV technologies which give customers a game changing advantage by enabling them to quickly configure their network services so they can do things like adjust their bandwidth to meet demand and provision collaboration tools. In line with this, we recently outlined plans to offer our SDN and NFV, cloud platform and data centres, and global and Australian networks in one integrated and intelligent platform that provides network-as-a-service called the Telstra Programmable Network.   

Cloud services also continue to be popular with our customers so we introduced a Cloud Management Platform, which is getting a lot of interest from customers looking for a single tool to view and control their hybrid cloud environment.  

What are the key challenges of expanding into Europe?   

The acquisition of Company85 will give us the capability to deliver our technology services into Europe, in addition to the connectivity solutions we provide. The work Company85 has done with London City Airport is a great example of how we’ll be able to assist with IT transformations.   

What are the key differentiators between the European technology market, and the Australasian market?   

These markets are relatively similar – technology is rapidly evolving, customer expectations are changing and the competitive dynamic is more challenging than ever, both also have an increasing interest in expanding into Asia. 

The difference for us is cultural, which is why we have local teams in several European markets. Our go to market strategy is subtly different on a market by market basis to ensure we get the best coverage for our customers.

What are the key trends you are seeing within digital transformation and did this influence the decision to target the UK?   

There is a growing focus on digital transformation and most businesses recognise they need to act if they are to remain competitive. Recent research we commissioned from the Economist Intelligence Unit called Connecting Capabilities, found that nine in 10 business leaders interviewed want to see digital transformation in their organisation. This is translating into increased demand for integrated network, security and cloud solutions, as well as advice on how to implement and manage these in the most efficient way possible.   

Customers are increasingly looking for a partnership. They’re not just looking for a telecommunications company to provide high-quality ICT infrastructure. They want a technology partner who can work with them to understand their business needs and provide advice on the technology solutions they need to address specific challenges like improving productivity, reducing costs, digitisation and expanding their reach into new markets.   

Our acquisition of Company85 gives us the capability to meet this demand and provide technology consulting services to UK and European based organisations.   

Why does Telstra believe that the UK is a good platform for expanding into Europe?   

The UK is a hub for multinational corporations and London is home to a significant number of financial services companies – an area where we’ve invested in industry specific solutions such as trading, security and compliance, so it makes a logical choice. It is also home to a number of media companies, which is another industry vertical we have invested in through Telstra Broadcast Services. This investment resulted in Telstra being awarded a six year multi-million dollar deal with Perform Group, a world-leading digital sports content and media group, for the delivery of a global media network solution for the Women’s Tennis Association (WTA) series of tournaments.   

We’ve been operating in the UK for more than 20 years and started expanding our team into Europe several years ago. As a hub for global multinationals, the UK is also an important springboard for customers into Asia, where we’ve made significant investments in cable assets and services capability. For example, we own and operate the largest intra-Asia subsea network system representing about 30 per cent of active capacity in the region. This network is the centrepiece of our global business – it underpins the services we provide to other telcos and the OTT tech giants, and it is the core from which we add on top our value added services, like cloud and unified communications, for enterprise customers.   

How does the acquisition of a UK-tech company fit into Telstra’s business strategy?   

We’re focused on growing our technology services business in both the international market, and our acquisition of Company85 will enable us to expand our capability set in a market where customers are increasingly seeking integrated solutions covering network, security and cloud infrastructure. 

Company85’s capability is strongly aligned to the existing suite of technology services we offer our Australian customers through our Business Technology Services group, and this acquisition is consistent with strategic investments we have made in the Australian market to grow this area of our business. These acquisitions include Kloud, which helps us support enterprises who want to transition their workloads and applications to the cloud, and Readify, a leading provider of application development and software-focused consulting and managed services.   

Does this represent a shift in focus for Telstra from the Asian market to Europe?   

Our strategy is to assemble leading capability for our enterprise customers from around the world. This acquisition is about adding technology services capability to our international enterprise offering and growing our UK and European market share. This builds on our strong network capability in Asia and adds to our value proposition in the region.   

How big is Telstra’s business within the UK?   

We’ve been providing services in the UK and Europe for more than 20 years, with more than 200 employees across the region. We have an established, fast growing market position serving multinational corporations using our global network, cloud and data centre platforms, and suite of services, including security, collaboration and industry solutions, to help them achieve their technology goals. We also serve the wholesale carrier and OTT customers in the region.   

Tom Homer, Managing Director EMEA, Telstra Global Enterprise & Services 

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