Maxnet rebrands; new owner Vocus plans to shift some business from Australia to NZ

UPDATE: Vocus' 2013 annual report reveals the company bought Maxnet for $A6.1 million.

Maxnet’s data centre business is being rebranded as Vocus Communications – the name of the Australian company that took it over for $9.5 million in May. 

CEO James Spencely has detailed plans to boost data centre business on this side of the Tasman, including moving staff and customers to Maxnet's North Shore, Auckland operation.

The Auckland company’s retail ISP will remain known as Maxnet.

But more and more the company will now focus more on its data centre and connectivity business. And, within that, there will be a move toward catering to larger customers – defined as those big enough to have an inhouse IT department. The moves are to bring the NZ operation's business model more in line with that followed by Vocus in Australia.

To wit, Vocus named two new NZ customers today, Konica Minolta and Jade Software.

Smaller customers will be sheparded toward partners, including IT services outfit Code Blue.

Retail ISP business could be offloaded
Mr Spenceley told NBR his company had considered offloading Maxnet’s retail business. However, it was ticking along smoothly and its possible sale was not a priority.

Holding a retail ISP is not a natural fit for Vocus which, beyond its data centre business, is best known for selling wholesale bandwdith capacity to ISPs. Mr Spencely says his company supplies around 25% of the local retail internet market (and although the 50% Telecom-owned Southern Cross Cable doesn't break out any figures, NBR understands Vocus is one of its largest wholesalers).

Maxnet hit headlines earlier this year when it launched an off-shoot called FYX, an ISP that offered a so-called global mode (allowing NZ users to access geo-blocked US and other online movie and TV content).

NBR met with both Mr Spenceley and local marketing and sales lead Andrew Schick. The Vocus CEO thought someone would have another go at a global mode, but his company had no immediate plans (Maxnet canned its brief offering as Vocus took it over. Although Vocus said it didn't want anything complicating the takeover deal, and said it prefers to focus on wholesale and business services, NBR was told a negative legal opinion from across the Tasman was a factor in the decision).

CEO walks
Maxnet CEO John Hanna – a high profile IT industry figure – departed soon after the Vocus takeover.

“The structure didn’t appeal to John,” Mr Spenceley said. Vocus wanted to bring the two businesses closer together.

“But John didn’t want to be a line manager,” added Mr Schick. “He likes to have P&L responsibility.”

More staff in NZ 

While Mr Hanna has moved on, the NZ operation has been increased by three or four staff to 50 since the Vocus takeover.

All are in the area of premium, 24-hour support for larger clients.

Support team, services moved from Australia to NZ
Long term, Vocus plans to move its entire premium support operation from Australia to New Zealand, Mr Spenceley says. He says it could work out cheaper, but the key reason is difficulty recruiting staff on the other side of the Tasman.

He also sees more data centre business being moved across.

The Vocus boss sees Australian power prices going up and up in future, but New Zealand’s mainly hydro-based electricity being more stable – and beyond that, our weather being more amendable to “natural cooling” (already used to a degree by Maxnet at its North Shore data centre).

He gives the example of an major Hollywood movie that was rendered at a Vocus data centre in Australia. That kind of heavy duty customer can generated a $20,000 to $30,000 a month power bill, Spenceley says, so moving that kind of work across the Tasman holds appeal.

Already, a number of Vocus' Australian customers are using the company's newly-acquired NZ data centres, Mr Spenceley says.

Vocus is listed on the ASX [VOC] and is due to report its annual result next week (for its year to June, only including a couple of weeks of business with Maxnet within the fold).

Guideance is for eibitda of $A16 - $16.5 million on revenue of $A45 to $A47 million.