How has that shift impacted your execution? You obviously want to have something off-the-shelf to give to the customer, but then you've talking about tailoring? How difficult is that?
The trick with offering these services is to ideally build as much repeatability as possible to make sure you can do it efficiently, economically. But you can't get away from the fact that you need people who can implement those sorts of projects. The other point to make is that you have to inject a lot of effort into the transaction very early on. The ones that go badly are when people don't put the effort upfront and three months down the line they start to wobble. Six months down the line, there is a crisis. The good ones throw those resources in at the beginning of the project.
What is the biggest challenge for a managed services provider in offering value to enterprise customers?
You need to focus on the right areas. Telecom companies have failed when they run around chasing deals they can't win or deals they can't deliver on. The people who do it right focus on the right areas. What sort of customers is a really good customer for the operator? Just make sure you focus your resources. How can you differentiate, is it around resilience, latency, or are you a good fit? The challenge is lining all these up for the right customers.
What is your overall strategy in the region?
There are three levels to our strategy. The first is around meeting the needs of Australian customers rolling out internationally, like telecom companies. I think there is more we can do. We have captured some of the opportunities, but I do not think we have massively exploited the footprint from within.
The second level is we have the stated ambitions to be one of the top networking providers in the Asia-Pacific region. The Reach restructure and other investments we've made are to support this strategy. We want to be in a position whereby if you've a Korean multinational looking to roll a network across Asia, then Telstra will have the services to support you. This is much like having our very own pan-Asian footprint.
The third level, if you look at it more globally, is we have strong capabilities in the US and Europe that are appropriate to some vertical markets. If you're looking at markets such as wholesale finance, we have locations in London, New York, Hong Kong, Tokyo and Singapore, which is a perfect fit for that sector.
What about in terms of actual services?
We are moving more and more to managed services and cloud computing. Throughout its history, Telstra has had strong hosting capabilities. If you look at the UK, for example, we have three world-class hosting facilities. The same is true here in Hong Kong, where we have data centers. The Reach transaction gives us a bigger footprint and more capabilities.
We have a solid cloud-computing platform in Australia. One of our customers is VISY, one of the largest packaging companies in the world. They are rolling out SAP to 140 locations around the world. We host this application in a Telstra data center. We aim to take this capability in Australia and replicate it on a global basis.