Leading Australian MSP, Data#3 (ASX:DTL), has reported a quarter-billion ($250.7 million) gross profit for its 2023 financial year, driven by a combination of steady management, market-leading staff retention, and the right vendor partnerships.
According to Data#3 Board Chair, Richard Anderson, this was due to several factors, but being able to “maintain levels of staff turnover well under industry averages” was a key one.
As other services companies suffered some of “the highest turnovers the industry has ever witnessed,” Anderson said, and Australia more broadly struggled with a skills shortage that is approaching catastrophic levels, Data#3’s relative stability has allowed it the flexibility to focus on revenue growth.
Data#3 has also been in a position to chase stale, CEO Andrew Baynham said, noting that the company is winning “larger, albeit lower-margin contracts” due to the company’s size and “significant cross-sell opportunity across our solutions portfolio and services.”
Baynham specifically highlighted Cisco as a key vendor enabling these deals and also noted that with the 2032 Gold Coast Olympics ahead, as a locally-located MSP, the project pipeline should be strong in the years ahead.
“Digital transformation is the primary driver of growth in our industry,” Baynham said.
“Security continues to be our fastest growing area and a top priority for customers as they respond to the ever-evolving and increasing threat of cyber breaches, seen by many as their number one business and risk management imperative.”
End of an Era as Baynham Steps Down
Baynham has also announced that he is stepping away from the company after one of the longest tenures in a CEO role in Australian IT. Baynham has been with the company for 29 years and has led the company since 2014.
He will be replaced by fellow Data#3 veteran, Brad Colledge. Colledge joined the company in 1995 before rising up through the ranks to become the company’s Executive General Manager of Software Solutions, Infrastructure Solutions and Services.
“In my tenth year as managing director and CEO I believe now is the right time to hand over the baton,” Baynham said.
“Data#3 has never been in better shape, and I am proud of the growth we have achieved during this time, with our market capitalisation increasing tenfold. As I cease my role as a full-time executive, I will consider turning my attention to non-executive roles.”
The transition of power will happen on March 1, 2024.
Data#3 is one of the oldest and most successful channel organisations in Australia. The company launched back in 1977 and was then listed on the ASX in 1997. It now has 1,400 staff, spread across 12 locations in Australia and Fiji.
The ongoing success of Data#3 highlights the value of having a stable and long-term business model in the channel. With innovation being what it is, it’s important to be able to move as the market does, but with steady management and a strong focus on minimising staff churn, Data#3 has been able to establish itself as a reliable and strategic partner for some of the largest IT projects in Australia.