EXCLUSIVE INTERVIEW: MEGAPORT CEO VINCENT ENGLISH ON GLOBAL EXPANSION AND HOW TO SCALE UP A BUSINESS
24 April 2017, Written by Ben Hall
THE RAPID expansion of Megaport (ASX: MP1) continues with the Brisbane-based company announcing a major partnership deal with US-based giant Oracle which will allow its customers to access its network across North America, Europe and Asia Pacific.
Through its collaboration with Oracle, Megaport customers will now be able to create a dedicated and private connectivity to Oracle Cloud services with higher bandwidth options which also provides faster and more reliable networking systems.
The elastic interconnection services provider, which uses Software Defined Networking, allows its customers to access a global platform to connect to their data base through the Megaport platform.
Founded by Bevan Slattery in 2013, the company is pinning its growth on the rapid demand from companies to be connected to the 'cloud'.
The Oracle deal is part of a massive expansion program undertaken by Megaport, which now connects more than 620 customers throughout 150 data centres in 37 cities across 19 countries.
Along with Oracle, Megaport also partners with major cloud service providers Amazon AWS Technology, Microsoft Azure ExpressRoute and Google Cloud Interconnect.
Newly appointed CEO Vincent English spoke with Business News Australia about the new Oracle deal, and what it takes to rapidly grow a highly profitable company.
To provide us with a sense of scale, how important is this collaboration in the US with Oracle?It's probably best to answer this in two parts.
For Oracle, it's really important for them and their customers in particular, because through Megaport it gives Oracle enterprises access to Oracle FastConnect and we've done that through our API integration.
It helps streamline Oracle's customer journey and order processes and they've done that by changing their pricing to a pay as you go system, similar to when you connect with Megaport. So, it is allowing them to scale very quickly by using Megaport's network.
I think from Megaport's perspective, we're really excited as we feel this is a form of endorsement as we have large cloud service providers such as AWS, Microsoft, Google and now Oracle. It's a real endorsement for Megaport that we have these large multinational cloud service providers wanting to work with us, and seeing Megaport as a realistic solution for their customers to be able to connect fast to their services.
So, pulling in the big players like Oracle is a way of making you visible to other potential partners?\Correct. And we're constantly looking at expanding our network in two different ways. We spoke predominately up to this point about expanding our significant footprint and that means new locations and new markets and expanding out beyond our 150 locations.
But the second part of our expansion is around the services that we have and the partners we have on our network and what that does is it creates a deep platform of service providers that enterprises want to connect with. What that means for us and Megaport is that we create a one stop shop where we'll continue to add more cloud service providers and any other network service providers so it becomes this one place that consumers or enterprises can use Megaport to access all of this.
We want to continue to grow with network expansion and bring on new partners and providers onto our ecosystem.
Is this typical of the type of business collaborations you'll be seeking in the future?We've been working on the Oracle deal pretty much non-stop for six months, these things take some time, and we have multiple other partners we're working with from small local players to more global players and that's something that doesn't happen overnight.
You've got to keep working at these because of the software integration that's involved. It takes a bit of time but we have a pipeline of these projects in the works and for the rest of 2017 it will be more of the same.
We're focused on going as hard and fast as we can and it's really important we get out there and get things done. We're really excited that people like Oracle are really willing to collaborate and work with us on a global level
In terms of financials, your half year results show a 345 percent increase in revenue but you're trading at a loss in terms of profit obviously Megaport is in a growth phase but how long before this changes?We originally did say way back when, when we were looking at the IPO and looking through our business plan and it was contingent on two factors. We wanted to launch in the US and into Europe and we've achieved that.\
The appetite for growth and the appetite for the type of people wanting to use our system will determine how fast we continue to expand and right now we're seeing that expansion and that appetite for demand is greater than what we'd foreseen initially.
So, short answer to the question: if you want to go fast and be the first mover and take the first move to get a competitive advantage then you'll only get one opportunity and that's where we see it now today.
It's short term profitability versus the long term of being the first mover with the big advantage. We need to be ahead of the game to be in that space ready to capture the market short term and long term.
At the end of the half year 2017, you had a strong cash position of around $24 million what's the situation with that now?It's come down, and it will come down quarter by quarter and that will always be the case if you look at our financials. The revenue is still growing and we are still making good growth across all of the main KPI's.
Bevan Slattery founded the company and is still executive chairman ... what sort of input does he have with your operations?We talk a couple of times a week, sometimes more. We're never too far away. We do chat quite a lot and he's quite busy as head of another listed company, Superloop, and he's very involved in the day to day operations of that business.
But we talk a lot mainly about strategic issues and generally how business is going with challenges we're facing, so we talk like that whenever necessary.
Business News Australia
Author: Ben Hall