Local tech support wins grow

One Australasian outsourced services provider, Datacom, is seeing growth in its IT support work that it suggests may signify an end to the enterprise honeymoon with outsourcing to India.

Kirsty Hunter, director of the company's call centre division Datacom Connect, which plays primarily in the IT space, said the division has seen steady growth - as high in some accounts as 60 percent -- in existing and new client contracts in the last year.

"Significant players have opted to bring their business out of India and give it to us," Hunter said. "My understanding is that the honeymoon is basically over with India. The quality's not there. I don't think the infrastructure and stability is where it needs to be."

The $270 million, NZ-headquartered company boasts contracts with some of IT's big boys - Microsoft, Symantec, HP and Cisco -- and with several large ADSL ISPs - including Telstra - and vendors such as Netgear. Australian revenues comprise $70 million of that.

Hunter said online work was one of the biggest growth areas, growing from zero staff 12 months ago to 45 today.

She said the division's Sydney staff numbers had more than doubled to 320 in less than three years. Datacom Connect moved into larger facilities in Sydney's North Ryde a year ago -- but already fears it may soon run out of space, she added.

"As much as people talk about remote offshoring solutions, that doesn't really apply to the complex end of our business ... which is hard and needs collaboration," Hunter said.

Datacom also has a Systems division which is also doing well with its corporate helpdesk, data centre, development and consulting services, and has centres in Sydney's St Leonards, Melbourne, and Kuala Lumpur -- which takes advantage of some increasing opportunities in Asia. The company has about 1,500 staff in total.

Hunter said that Datacom's advantage was probably its ability to customise quality packages for complex environments, working closely to individual customer needs. The company prided itself on its agility and responsiveness, she said.

"They can do really easy volume stuff for some customers but when it gets hard, India is not the solution. And that's my call!" Hunter added.

Ian McLean, Asia-Pacific managing director at Netgear in Australia, said the networking vendor had actually brought support work back to Datacom in Australia after a less-than-encouraging experience with offshoring support to India.

An Indian service had not delivered the quality Netgear required for certain aspects of its job, McLean said.

Late last year, giant hardware vendor Dell announced it was ending a US deal with an Indian call centre in the high-profile IT centre of Bangalore that had offered technical support to Dell's corporate customers. Corporate customers represent some 85 percent of Dell's overall business.

Customers had been dissatisfied with the quality of service offered, saying that India-based staff listened but no results ensued from support calls. Dell responded by moving the facility back to the US, reports said.

Phil Hassey, associate director of Asia-Pacific services at researcher IDC, is an analyst whose specialities include call centres, offshoring, data centres and network or desktop management.

Hassey warns that Australia cannot yet expect to see an end to offshoring of IT. "You won't see too many enterprises complaining that they're taking their capabilities offshore. It does save you a significant amount of money and gives you sufficient flexibility," he said.

Fluctuations in demand were par for the course -- especially in an election year when business leaders might take care around emotive issues such as outsourcing, Hassey said.

"The election is going to inhibit slightly the growth of offshoring in Australia. The Federal government is not going to do anything about it. And the unions would probably jump up and down," he said. "There's a huge amount of emotion, rightly or wrongly."

The internet had been a paradoxical driver of the whole issue -- by both making offshore outsourcing easier and stirring up feelings in its role as a communications medium, Hassey added.