IT companies defy credit crunch

Segments of the IT sector are still feeling bullish about expansion despite the impact of the credit crunch on corporate spending.
  • Agnes King (Unknown Publication)
  • 03 April, 2008 23:00

Segments of the information technology sector are still feeling bullish about expansion despite the impact of the credit crunch on corporate spending. Storage hardware maker NetApp and search engine optimisation company ReachLocal have unveiled aggressive plans to expand local operations.

NetApp has thrown down the gauntlet to its main rival, EMC. "In terms of Australian revenue, we will go past EMC in the next six months," the company's managing director for Australia and New Zealand, Peter O'Connor, says.

NetApp domestic revenue jumped by 95 per cent for the three quarters to January 30. O'Connor has set equally aggressive targets for the 2008-09 financial year, which for NetApp starts on May 1. "If we get even half [our growth strategies] right, we'll get there pretty quickly," he says.

NetApp, which re-branded from Network Appliance this year, has been poaching sales and technical resources from competitors Hitachi Data Systems, Symantec and EMC. The company has added 78 staff in Australia and NZ since O'Connor joined 21 months ago.

It plans to add a further 50 staff by December. A third will be in sales and marketing positions. Income from partners accounts for 35 per cent of the company's domestic turnover, up from 25 per cent. The goal is to increase that portion to 50 per cent within 12 months.

NetApp will restructure its operations to raise sales in the government, manufacturing, health care and legal sectors. The bulk of its growth rides on the back of an independent EMC product - virtualisation software manufactured by VMware, an EMC subsidiary. It helps companies cut costs by grouping multiple computer servers onto a single machine.

ReachLocal, a United States brand focusing on small and medium enterprise, has expanded from zero to 50 staff since setting up in Australia last April. Chief executive Steve Power plans to hire a further 30 mostly sales personnel to keep up with demand.

Of 172 companies surveyed by BRW (a sister publication of CIO NZ) this year, half utilise search engine optimisation and 44 per cent intend to increase spending substantially. Of 57 per cent not using the system, 40 per cent plan to start.

Fairfax Business Media