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Xigo's Telecom Expense Management Blog

Can opportunity and stability both go up radically at the same time? Can you bake a cake without breaking any eggs? Yes we can! We did.

How often do stability AND opportunity co-exist? And how often can they exist equally for multiple constituencies - simultaneously? What is so cool about our opportunity is the chance to build on a solid foundation. Some customers have been using our platform since early 2001. Imagine that, a software-as-a-service platform whose core has been around for 12 years. Keeping continuity for our customers is very important to us, but we need to expand new opportunities for them as well. I had a moment to reflect on the principles that guided Xigo’s team during our decision making process to become part of the Dimension Data family and it occurred to me that many are missing this real jewel of “stability and opportunity.” The guiding principles that informed our process and especially our final decision were threefold:

1. Good for employees
2. Good for customers
3. Good for shareholders

Easy to say, hard to do. We were presented with a challenge. The importance of international capabilities, a rapidly changing mobile landscape, and the need for continuous improvement to our core solution compelled our management team to critically assess our ability deliver what our customers needed in order to remain a leader in our industry. After much consideration, we concluded that we needed outside help. Our options generally fell into three categories:

1. Raise money from an entity that could help us;
2. Join one of our competitors in order to get more scale and resources; or
3. Find a strategic buyer that had the resources and business fit to succeed.

Continuing our conservative approach to growth and investing our own capital was an option, but in the end, this conservative approach was simply not in the overall best interests of our customers, employees and shareholders.

The basic thinking on the three alternatives went something like this:

1. Raise Money – The positives of having a large pool of investment capital and fresh thinking were outweighed by several factors. A truly global solution includes sales, account management, and service delivery in-region or in-country. Everything we discovered about when services businesses (and most B2B technology plays) should invest in global capabilities was concerning. The advice was all pointing towards being a much, much bigger company and then growing very, very slowly. We kept this as an option, but we weren’t sold on this as the winner.

2. Join a Competitor – This option is very much in vogue right now with rapid consolidation taking place in the TEM industry. I imagine this trend will continue. While the mainstream view is that consolidation in our industry is both good and necessary, we had concerns about our guiding principles. Namely, this was certainly not good for the almost 100 employees of Xigo. There would have to be large cuts in almost any merger with similar type of company. Many of our competitors embrace aggressive off-shoring. Our team had invested more than a decade with us. Would this be a win for our customers? That would certainly be the long-term intention, but to brush aside the short to mid-term pain and uncertainty they would experience would be willful ignorance. Which platform would prevail? Multiple platforms doing the same thing are a non-starter. For those of us old enough to remember the movie Highlander – “there can be only one” ring true. Our customers had invested years in us, trusted us, intentionally picked us over our competitors – pretty tough to see how this would be good for them.
   
3. Strategic Acquisition – Ultimately, this began to be the only real option for us. Ideally, the buyer would need us as an integral part of their broader plans. They would understand our fit into their core business and be excited about investing in improving our product, our service delivery and our global capabilities. Instead of cutting, they would be providing us with growth resources. They would be committed to a roadmap that would be positive to our customers and employees. Shareholders would be proud of the decision and be able to look customers and employees in the eyes and say this was the best possible outcome.

So this brings me to something that is truly rare – customers winning on two very important fronts at the same time – stability and opportunity. Stability from knowing that the platform that drives the solution is not changing – platform continuity. No migration. No retraining. No loss of favorite features. Stability from people continuity. Customers are dealing with the same teams as before. Clients get continuity that comes from financial stability and a strategic buyer that is committed to their IT and communication estate. But what about the opportunity? The opportunity is to leverage the resources of a multi-billion dollar organization operating directly in 51 countries and indirectly in 114. The opportunity to solidify and enhance a scalable, global platform that is extensible to meet the changing needs of a rapidly developing market. The opportunity to leverage over 14,000 employees focused on execution in the IT and communications industry. Our goal is to turn this opportunity into a big win for our customers and employees. Let’s all enjoy the journey.