Published on the 28/01/2016 | Written by Beverley Head
Telstra is putting more of its money where its mouth is to grow its Network Application and Services business and share of the cloud market with a couple of strategic investments this month…
The telco giant last week announced that it would buy Kloud, a professional and managed services business, and hire its 150 staff in Australia and the Philippines. The deal, reportedly worth around $40 million, further strengthen’s Telstra’s ability to transition companies to one of the range of cloud services it brokers.
Telstra also announced it had made a strategic investment through its Telstra Ventures division, in US-based company Instart Logic which sells software to help enterprise customers optimise their customers’ website experiences.
In the annual report’s letter to shareholders the company’s bosses said; “We have a strategic growth plan designed to transition Telstra into a global technology company that empowers people to connect and we continued to invest in new businesses…”
At the heart of that plan is the Network Application and Services group which grew strongly during the last financial year – up 23.2 percent to around $2.3 billion in annual revenues. While it’s less than a tenth of the company’s overall $26.6 billion revenue, the group is growing quickly, and has access to Telstra’s deep pockets lined by its other profitable telecommunications businesses.
An indication of how fast those units are growing will emerge on 18 February when the company releases its half year results.
The cloud business may not yet be highly profitable, but it is strategic to Telstra – especially given its international ambitions, signalled last year when it bought Pacnet and its regional managed services and data centres.
Telstra, which has cloud arrangements in place with VMware, IBM, Amazon Web Services and Cisco, along with its own cloud infrastructure sees its future as a central portal to a raft of cloud services.
Its intention to buy Kloud, which is a Microsoft partner, delivers capabilities in cloud strategy, productivity solutions, identity and security, application development, cloud infrastructure and managed services for enterprise cloud applications. Telstra said that it would be important in helping customers transition existing workloads to the cloud.
The deal is expected to be finalised at the end of February.
