Product details

This background note is to accompany the case. The abstract of the case is a follows: Dimension Data (DD) was founded in 1983 by three friends as a local supplier of low-margin networking products. In 1987 it was listed on the Johannesburgh Stock Exchange. In 1996, Jeremy Ord, the Executive Chairman, and his top management team considered the developments in South Africa and in the IT industry internationally and decided to globalise. By 2000, the company had grown to a provider of global network integration services and global end-to-end i-Commerce to corporations, telecommunication service providers and New Economy companies. It was represented on five continents, in over 30 countries and employed more than 10,000 staff. Market value had increased from R30 million in 1987 to R53.2 billion by March 2000. The group was not only the largest IT company in South Africa, but one of the largest integration service businesses in the world. Over the past five years turnover had increased by a compound annual growth rate of 98 percent and headline earnings by 57 percent. DD conducted its business through a number of subsidiaries and associated companies, and enjoyed independence of supply due to its established supplier base. Listing on the London Stock Exchange on 19 July 2000 was meticulously prepared. Yet Ord contemplated whether it was the right decision, whether it really was a 'do or die' situation. DD had no serious competition globally in their combined network and i-Commerce field. However, Ord knew that in this fast moving industry competition could suddenly arise from unexpected quarters. His future challenge - how to stay ahead in such a fast moving market - weighed on his mind. He wondered how successfully DD would integrate acquisitions, consolidate its global footprint, extend the i-Commerce offering and globalise the DD brand. He also pondered on how the investment community would judge DD's earnings potential once goodwill had been amortised, and how DD could continually re-invest itself globally in future.