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First, Dimension Data didn`t make the Nitel shortlist. Then, Bussiness Connexion was chosen to help take Cisco`s `AON` vision to market. And finally, Didata lost to Telkom in the Old Mutual/Nedbank outsourcing deal. What is one to conclude from recent contract losses by ?

First, at the end of July, the integrator, together with 80% subsidiary Internet Solutions, or IS, didn`t make the shortlist in its campaign for a stake in Nitel (Nigeria Telecoms) and its mobile subsidiary M-Tel - seemingly ending its run in a bidding saga that provoked intense regional interest.

To make things more poignant, other South African players of renown did make the list, including (in a consortium with ) and . (The other short-listed bidders are: a consortium consisting of and Jacuz; Orascom; Celtel; and Newtel.)

Next, in what has been interpreted as a snub from , the world`s premier networking vendor and a global DD partner, (BCX) was selected to partner Cisco`s launch and marketing of application-oriented networking (AON), its new networking vision.

By then, the tongues were wagging.

At one stage, when Dimension Data (Didata) was flying high in the nineties, it might have been considered the only choice any of its vendor-partners could make in such an important move. And yet it appeared to be glossed over, and this after winning Gold Partner of the Year last year.

But the final straw that prompted us to ask these questions outright came when, again together with IS, DD did not win a multimillion-rand outsourcing contract put out by Old Mutual and Nedbank.

Again, Telkom was the winner. And instead of sharing the spoils with IS, a very real possibility given the telco`s multi-layered relationship with Didata, it went in with CSC instead.

So what`s up?

Time to worry? The feeling of Didata-watchers can probably be summarised by saying the company has gone through a number of high-profile `failures` to capitalise on its own grand vision - that of lifting itself out of a commoditising space of infrastructure-related offerings into a high-margin services space (integration, hosting, managed services and such).

One of these would have been smartly underpinned by Cisco`s AON strategy involving far-reaching integration into customers` enterprise architecture. AON is the stuff of high drama in the otherwise humdrum arena of networking. When it comes to full fruition, it will give Cisco a very credible presence on the stomping ground of middleware vendors like SAP, , BEA and .

Though hugely complex in the steps needed for its execution and its effect on enterprise application architecture, everybody knows it is the lifeline Cisco needs to avoid its wares descending into its own commoditised hell.

, the US-based group CTO of Didata, says the impression that it has `lost out` to BCX is simply wrong.

"AON is an immensely complex, long-term vision. As a means to introduce middleware into the network, it is a step-change for networking, as it starts to combine enterprise application integration (EAI), networking and switching, redefines compliance, brings further scope to operational management and potentially extends to business process management and maybe even more areas. It`s not going to happen before 24 to 36 months. We don`t believe a huge investment in it is necessary right now.

"However," he says, "Cisco has provided us with an early insight into AON developments and we will continue to partner closely with it. We believe this is a journey. Cisco acknowledges this, saying its efforts are a three-to-five-year process."

At your service

Didata`s strategy has long been to move into high-end services, as opposed to product reselling, as mentioned above. Citing its above `losses`, critics, however, say that morphing into this role would take some doing.

They also say Didata`s very partnership with Cisco has not helped it gain a foothold in the price-conscious small and medium-sized business market for managed services, one area of services.

(By contrast, it has had notable successes in larger accounts, such as Distell in Stellenbosch and Namibian conglomerate Ohlthaver & List, among others.) Reinecke reiterates that Didata is not expecting much revenue from AON in the short term (the next two years), and that the selection of BCX probably came as a result of Cisco having targeted accounts in which BCX is the preferred supplier. "Once [AON] gets to the point of having to ensure interoperability with the enterprise, that would be an exciting time for us to get involved. Putting bladelets into a switch is, to be honest, not that exciting."

Taking on Telkom

The criticism goes further, alluding particularly to Didata`s losses to Telkom, thanks to an "uneasy" - relationship of bidirectional supply with Didata, and Didata`s unenviable position of having to resell bandwidth it buys from Telkom through IS.

There are plausible rumours of widespread undercutting by Telkom of value-added network providers (VANs) like IS and MTN Network Solutions in infrastructure deals.

, CEO of Didata SA, acknowledges that the Nitel case, like the Old Mutual/Nedbank one, is not to be shrugged off that easily, but says it`s not game over. And as , MD of IS, has said, "You win some, you lose some".

Cawood: "We hoped to become the integrator in an equity-based partnership with an established telecoms player that has management capability, and if we`d been short-listed, that would have made it easier. But it`s not the end of the road. We will still look at the short-listed candidates [Telkom, Vodacom, MTN and others] and for an opportunity to offer our normal [IT integration-related] products and services. Cawood stresses, as he has before, that Didata`s Nitel play was never intended to focus on the telco space.

As regards the Nedbank/Old Mutual deal, he downplays the supposed Telkom bogey. "We have an interesting relationship with them. We`re a big procurer of bandwidth, and we supply them, in turn, with a host of products and services. It goes both ways. In some cases, there`s a competitive element."

IS is a VAN, whose lot in terms of self-provisioning is at best uncertain, given the, frankly, non-committal telecoms regulations the Minister of Communications saw fit to pass in February.

This means that, for fear of reprisals, it cannot possibly compete with Telkom, a bandwidth wholesaler, and must almost of necessity lose in such a competitive setting.

Why, then, did it not partner with Telkom? "You structure a deal as the market requires," says Cawood. "We made a call to compete directly in a consortium with BT, IS and us. Obviously we don`t like to lose. If we`d won, we`d have resold Telkom`s bandwidth anyway, but now Telkom gets a chance to be not just the infrastructure provider, but to provide services on top of that."

Didata obviously felt it could leverage BT`s economies better in this regard, so perhaps it`s par for the course. But as much as co-opetition is a fact of modern business, so the power of monopoly telcos remains undiminished. In fact, as we`ve witnessed in noises coming from BT, the services party is something telcos are aggressively crashing. View this in the light of Didata`s statements that it isn`t entering the telco space.

Well, maybe it should. Telkom isn`t doing it any favours anyway.

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