NEC aims to get 70 percent of revenue from services

Stuart Corner
Wednesday, 17 June 2009 07:11

IT Industry - Strategy

NEC flagged the new strategy in January when it announced plans to exit the consumer electronics and whitegoods markets in Australia and retrench 200 staff with Takeuchi, saying: "This move forms part of our strategic evolution towards redefining NEC Australia as a business services company.

That announcement was followed by one in March when NEC Australia announced plans to re-organise into four business units - Unified Communications, Managed Services, Network Solutions and Display Solutions - and the restructure of its R&D operation to focus on commercial ICT technologies. As a result some 153 staff were to lose their jobs.

Under the new structure, the Unified Communications group would focus on corporate sales of unified comms products; the Managed Services group on systems integration and delivering managed voice, data, IT, unified communication and data centre services; the Network Solutions group on "connecting software, systems and people together using our extensive solution and system integration capability," with an initial focus on "growing our activity in the health/ aged care, connected communities and education."

These moves are the latest in a series of internal re-organisations in recent times, starting with the announcement in December 2006 of the absorption into NEC Australia of NEC Business Solutions from 1 April 2007 with the aim of " increasing synergy and business collaboration between the two in the key areas of IT and networks." At the time of the announcement NEC Australia claimed revenues of $582m, including NEC Business Solutions. NEC Business Solutions provided provides end-to-end voice, data and video solutions for business and government, offering IP telephony, contact centre and managed services.

At that time NEC had been a major player in circuit switched enterprise telephony systems for many years, but acknowledged that it had been slow to embrace IP telephony and unified communications. It made a major shift in that direction in mid 2008 when it launched the first of a range of new IP based communications servers, the SV8100 saying "It really advances the migration path for existing customers."

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