DDR - Dicker Data

[galumay]

I dont own EHL, I was mean about them to @finicky in the thread about it.

 

[divs4ever]

I dont own EHL, I was mean about them to @finicky in the thread about it.

considering EHL is riding a long tail of the mining boom , i am not sure 'mean' is unjustified

this is where it should be if the mining cycle was in 'consolidation phase '

 

[JohnDe]

For those that missed it, DDR hired Pal Randazzo to manage its icloud division. This is a great opportunity, cloud based storage is only going to get bigger.

Dicker Data hires Paul Randazzo from Microsoft

Distributor Dicker Data said it has hired Microsoft veteran Paul Randazzo as its new cloud business manager.

In that role, Randazzo will oversee Dicker Data's Microsoft cloud division.

He will have a focus on enhancing Dicker Data's cloud service offerings, building new strategic partnerships and carry responsibility for ensuring the distributor remains at the cutting edge of cloud delivery technology.

Randazzo will also play a pivotal role helping Dicker Data accelerate cloud adoption through the distributor's many partner organisations.

Prior to Dicker Data, Randazzo spent over 13 years at Microsoft, most recently as a small to medium business sales and go to market lead across Australia and New Zealand.

Dicker Data's general manager of Microsoft and VMware, Sarah Loiterton, said Randazzo is widely known in the Microsoft ecosystem for his ability to help partners realise the full potential of Microsoft technology.

Randazzo said to have the opportunity to join Dicker Data's business and to make an even more direct impact on the success of partners aligns close with what is important to him.

 

[galumay]

Again, my caution would be bigger is not always better. Plenty of really awful businesses in cloud storage. Its capital intensive, low margin and a crowded market. Maybe DDR can leverage their partnerships and create real business value here, but like any business its not a given. Its close to narrative speculation when investors just unquestioningly accept the hype from companies about their growth and expansions.

The proof is in the results down the track, the Financial Statements going forward will tell us whether a specific strategy has a sufficient IRR to justify the capital allocation.

 

[JohnDe]

Again, my caution would be bigger is not always better. Plenty of really awful businesses in cloud storage. Its capital intensive, low margin and a crowded market. Maybe DDR can leverage their partnerships and create real business value here, but like any business its not a given. Its close to narrative speculation when investors just unquestioningly accept the hype from companies about their growth and expansions.

The proof is in the results down the track, the Financial Statements going forward will tell us whether a specific strategy has a sufficient IRR to justify the capital allocation.

Nothing is a given.

I can only go by what my business is doing, and all the other businesses and suppliers that I use and know. For us Cloud storage has been a great tool for business, as software developers use it on business programs it has allowed us to make savings. We have cut down costs by having easy access from any PC from any location, dropping subscriptions required to install programs on to multiple PCs. there is also the savings of not having to buy storage devices that require periodical replacement.

Cloud storage is still a teenager, there is going to be much more on offer from it in the future.

 

[galumay]

Cloud storage is still a teenager, there is going to be much more on offer from it in the future.

You are still missing the point I am trying to make, it doesnt matter how great a product is or how well a tool or service works, that doesnt mean its a good business, or a good part of a business. Ultimately what matters is the IRR that capital employed generates from the business activities. What you have described is the benefits for a business of moving to cloud based storage, that says nothing to the economics of providing that storage.

(Note I am not arguing that its not going to be a great sector for DDR, just that you cant assume that from the narrative hype, nor experience as a user.)

 

[JohnDe]

You are still missing the point I am trying to make, it doesnt matter how great a product is or how well a tool or service works, that doesnt mean its a good business, or a good part of a business. Ultimately what matters is the IRR that capital employed generates from the business activities. What you have described is the benefits for a business of moving to cloud based storage, that says nothing to the economics of providing that storage.

(Note I am not arguing that its not going to be a great sector for DDR, just that you cant assume that from the narrative hype, nor experience as a user.)

I'm not arguing with you or saying that you are wrong. I'm just pointing out the benefits of a good product, a business that uses some profits to expand, future proofing, etc.

One thing you mentioned was your dislike of companies that give decent dividends, I am the opposite, I like a business that gives a decent dividend as long as it is sustainable. I prefer a CEO to take payment by dividend rather than cash and million-dollar bonuses. Is DDR's business plan and revenue sustainable? Could ask the same thing about many businesses that don't pay a dividend and are struggling.

Like you said, "nothing is a given".

Why distributed cloud networking is the future of enterprise networks

The current enterprise networking landscape: challenges aplenty​

Before diving into the distributed cloud networking concept, it’s essential to understand several of the key IT challenges enterprises currently face that arose because the post-pandemic world demands a highly distributed approach to user access, data management and application deployment. A trifecta of transformational initiatives is replacing the centralized IT model:

• Cloud application transformation: Enterprise applications are transforming into modern microservices that run across multiple public and private clouds. Flexibility, scalability, and resilience are the essential requirements. Businesses are moving away from on-premises data centers and embracing the scalability and adaptability offered by the cloud.
• Edge transformation: High-performance and latency-sensitive applications are relocating closer to the enterprise edge. This shift is particularly critical for applications like IoT that require real-time processing. Edge computing allows organizations to process data nearer to its source, reducing latency and enhancing the overall user experience.
• Workforce transformation: The work-from-anywhere model has become the new normal, prioritizing remote access and secure connections. Enterprises must adapt to this shift, where work can happen anywhere with an internet connection. This necessitates a robust and flexible networking infrastructure capable of supporting remote work at scale.

The market opportunity for distributed cloud networking​

Now, let’s address the golden question: what’s the market opportunity for distributed cloud networking?

 

[divs4ever]

You are still missing the point I am trying to make, it doesnt matter how great a product is or how well a tool or service works, that doesnt mean its a good business, or a good part of a business. Ultimately what matters is the IRR that capital employed generates from the business activities. What you have described is the benefits for a business of moving to cloud based storage, that says nothing to the economics of providing that storage.

(Note I am not arguing that its not going to be a great sector for DDR, just that you cant assume that from the narrative hype, nor experience as a user.)

is DDR building/buying the storage , or is it discretely leasing storage as 'a white label ' customer ( from an existing cloud storage facility )

IF buying or building will it be clever enough to innovate in the process , the mainstream server farms have issues that could be eliminated ( like propriety hardware 'lock-in ' )

 

[galumay]

Not sure @divs4ever, I haven't looked into it in any detail, but i suspect all they are really doing is providing support to customers of cloud providers that they are reselling. After all they are just a box reseller so I cant see them pivoting into their own products & services. I could be wrong though, and its immaterial to my point - the quality of capital allocation decisions can rarely be assessed based on management narrative to the market.

 

[galumay]

Like you said, "nothing is a given".

I am giving up, I am obviously failing to articulate my points well enough and you keep misunderstanding and even strawmanning me. Au revoir!

 

[JohnDe]

OMG galumay is a baby, spits the dummy and puts me on his banned list so that I can't see any of his posts and then posts about me.

galumay "I am giving up, I am obviously failing to articulate my points well enough and you keep misunderstanding and even strawmanning me. Au revoir!"

 

[JohnDe]

is DDR building/buying the storage , or is it discretely leasing storage as 'a white label ' customer ( from an existing cloud storage facility )

IF buying or building will it be clever enough to innovate in the process , the mainstream server farms have issues that could be eliminated ( like propriety hardware 'lock-in ' )

From what I have read, DDR use established companies, such as Microsoft. Which I reckon is a much better idea, because cyber security is the current big thing and experience from established players is important. Just look at the banks and phone companies that have been hacked, damage to reputation.

DDR are a major distributor, with decades of experience and strong relationship with companies that save a lot of money by not having to invest in areas that DDR are well established in. The question is, can DDR maintain and build on those bonds.

Dicker Data has been a stalwart in the technology distribution sector, with a rich legacy spanning over 45 years. Specialising in technology hardware, software, cloud, access control, and surveillance distribution, the company is wholly Australian-owned and operated. With a partner base exceeding 10,000 resellers across ANZ, Dicker Data is committed to nurturing long-term relationships and aiding its partners in business growth. The company’s extensive product portfolio includes offerings from global tech giants such as Cisco, Citrix, Dell Technologies, Hewlett Packard Enterprise, HP, Lenovo, Microsoft, and other top-tier brands.

Paul Randazzo joins Dicker Data to helm Cloud division

Dicker Data recruits ex-Microsoft talent Paul Randazzo to steer its Cloud division in Australia.

itbrief.com.au

Dicker Data focuses on 'extracting maximum value' from its acquisitions

Facing challenging margins in New Zealand especially, ASX-listed distributor Dicker Data is signalling further integration of its acquired businesses.

Dicker Data told shareholders today it earned A$3.1 billion in revenue during the year to 31 December, an increase of 25 per cent or A$619.9 million. The company's New Zealand businesses contributed A$550.1M, or around 18 per cent of that total.

2022 marked the distributor's first full year of owning New Zealand-founded distributor Exeed, which it acquired for NZ$68M in July 2021. In 2020, the last financial year before that buyout, Dicker Data reported New Zealand revenue of $151.8 million.

Gross profit was up 23.2 per cent to A$283.7M in 2022, however gross profit margins declined from 9.3 per cent to 9.1 per cent.

Margins in the New Zealand business, which were already lower than in Australia, fell further during the year, from 7.6 per cent to 6.5 per cent.

Operating costs increased as a proportion to revenue to 5.0 per cent from 4.7 per cent in 2021 as the company invested in servicing the the new customer and vendor relationships it obtained from buying Exeed and Hills' security and IT division, shareholders heard.

All of that had Dicker Data undertaking "a level of organisational introspection" in late 2022, the company told shareholders.

Technology refresh cycles were expected to return to pre-pandemic intervals and Dicker Data expected enterprise and government to drive market demand in 2023 as they embarked on their next phases of digital transformation.

Conversely, SMB spending was expected to abate.

Dicker Data's profit after tax for the year was A$73M, down by a marginal 0.7 per cent.

Executive director and chief operating officer Vlad Mitnovetski Dicker said Data's performance throughout 2022 period was strong, delivering a significant increase in revenue and delivering a gross margin of over nine per cent.

"Despite the one-off integration costs and significantly increased wages from onboarding hundreds of new staff, we delivered an outstanding result inside of the factors we can control," he said.

The acquisition of the Hills Security and IT division and the subsequent launch of Dicker Access and Surveillance (DAS) business positioned the distributor "extremely well" for 2023, Mitnovetski said.

In February, Dicker Data inked a deal to buy NZ-based Connect Security Products for NZ$5.0M, comprised of NZ$3.5m for goodwill with the balance being business assets, predominantly inventory.

This enabled Dicker Data to launch its DAS business in New Zealand, delivering benefits that would be used to further grow the business across A/NZ, the company told shareholders.

The velocity of the DAS business increased towards the end of the year, with gross margin finalising around 50 per cent higher than seen in the IT side of the business.

DAS across A/NZ was expected to operate at gross margins double that of the IT business in 2023 as growth accelerated and the operation was refined and capitalised on shared services.

A total of 3244 resellers purchased from DAS in the eight months to December 2022. 2595 of these accounts were net new customers acquired from the Hills Security and IT division, with the remaining 649 being existing Dicker Data IT partners.

"This demonstrates the convergence of the IT and security markets that is expected to continue in FY23," Dicker Data told shareholders.

"Security partners are also expected to increase their reliance on IT products as cloud storage, networking, power and Al becomes increasingly integral to modern security solution design."

I almost sold DDR because I saw possibilities of DDR struggling after Covid, but then other world issues popped up that play into the hands of DDR. Increased cyber-attacks on business, new software that enhances cloud-based software and applications, etc.

But as someone recently stated 'nothing is a given'. Just like the not so recently hyped company Tritium was on top of the world one minute and is now battling revenue issues.

• End of the road? Tritium rescue call rebuffed
• 
  
• ‘This could be a dud’, key Tritium backer laments

 

[Country Lad]

Meets all my criteria except for momentum for a breakout today

Seems to have found some momentum

 

[JohnDe]

Seems to have found some momentum

View attachment 165307

Famous last words, but it is looking good at the moment.

 

[bk1]

There were trapped sellers no doubt, on LHS of the chart from the earnings report in Feb of this year. The latest price action has covered that and volume continues to be healthy. I wouldn't mind a breather here..

 

[galumay]

Its funny seeing speculative traders interested in DDR! For years the very tight registry with tiny free float meant that only investors were interested, and there was very little discussion about the business anywhere.

 

[Country Lad]

Its funny seeing speculative traders interested in DDR!

I'm interested in anything that looks like the share price is on the up.

 

[Jeda]

Its funny seeing speculative traders interested in DDR! For years the very tight registry with tiny free float meant that only investors were interested, and there was very little discussion about the business anywhere.

funny? that’s a strange term for an investor to use on a long term holding maybe less comments and more research

 

[galumay]

that’s a strange term for an investor to use

How so?

 

[JohnDe]

Famous last words, but it is looking good at the moment.

View attachment 165413

As predicted Down 1.84%, still on a decent high but the market is stormy.