Australian Web Integrators Go North

The Asia-Pacific professional services and Internet integration
space has been an active one of late with several significant
mergers, acquisitions and alliances announced. While traditional
professional services companies like the big 5 accountants, consultants
and heavy weight law firms have been falling over themselves
to stake their claim in the burgeoning Asian market, smaller
players have been out forging alliances and winning business.

The new professional services frontier has also provided start-up
Internet integrators like LibertyOne’s Zivo,
XT3 and Cortex e-Business to
compete. In what looks to be an emerging trend in Internet professional
services, Chinadotcom subsidiary
Web Connection waded
into Sydney earlier this week and bought XT3.

The XT3-Web Connection entity announced Monday involves Web
Connection injecting capital into XT3 now for a controlling stake
in XT3, with an agreement to take full ownership over three years
– subsequent to a number of performance hurdles. The strengthened
entity will be able to compete for more sophisticated projects
with its larger team and knowledge base.

Hugh Morrow, MD of XT3, says his company prides itself as
the “McKinsey of the Internet space”. This skillset in strategy
services combined with Web Connection’s technical workforce should
position the merged entity as a full service offering capable
of large multi-million dollar projects.

Web Connection represents a large proportion of Nasdaq listed
Chinadotcom
revenue base and boasts clients like HSBC,
AOL and Bosch. President and
COO of Web Connection, Steve McKay sees the “presence in Australia
via XT3” as an opportunity for companies to “penetrate the unique,
high-growth Asian Internet community”.

Last week Australian Internet pioneer Spike Networks announced
a joint venture with Hong Kong based Pacific
Century CyberWorks
, bundling up Spike’s professional services
division into Spike CyberWorks. Even prior to the PCCW joint
venture Spike had been hard at it in the professional services
arena, forming alliances with the likes of Arthur Andersen. Together
Spike and AA hoped to “deliver comprehensive and integrated eBusiness
and consulting services.”

Zivo is yet another Australian player with its eyes on Asia,
co-founder and CEO Jeff Lewis said Spike and PCCW were a good
fit. On the Zivo’s own standing Lewis said, “I’ve spoken to a
lot of the players in Asia and the US and will continue to do.
So far the perfect marriage hasn’t fit but we’re not in any rush,
we’ve got a great business and we’re growing through acquisition
and organically at a great pace we’ll be acquiring businesses
in North Asia this calendar year.” Zivo has already demonstrated
it is willing to make big deals in Asia, with the acquisition
of Southeast Asian Web integrator xIBA
and Net Power in Hong Kong last year.

Martyn Mitchell, who leads
PricewaterhouseCoopers
technology team in Australia, said Asia is crucial for Australian
Internet players. “In this global market building a strong Asian
presence is a key to success. I think Australian companies can
have a first mover advantage over American companies in Asia,”
said Mitchell.

Several consultants who work in Internet services blamed the
apparent absence of US players in the Asian market on the technology
services boom in the US. “Why go looking for business when it
comes banging on your door?” Seems to be the attitude of many
US companies.

Australian Web integrators have a once in a lifetime window
of opportunity in Asia. Big or small they all have an opportunity

to grab and hold a stake of the market while their US counterparts
are looking the other way. Once new business in the states tightens,
Australian companies can be assured of some stiff competition
as US players focus their sights on the Web Asian frontier.

Get the Free Newsletter!

Subscribe to our newsletter.

Subscribe to Daily Tech Insider for top news, trends & analysis

News Around the Web