Telstra boosts tech expertise with $40m Kloud purchase

Telstra is continuing to beef up its technology portfolio as it moves to acquire Kloud Solutions for $40 million.

Telstra Results

Telstra is continuing to beef up its technology portfolio as it moves to acquire Melbourne-based managed services provider Kloud Solutions for $40 million.

The acquisition, which bolsters Telstra’s network applications and services portfolio, is the second under chief executive Andrew Penn, who highlighted his commitment to transforming the telco into a “world-class technology” business, since taking over from David Thodey in May last year.

In October, Telstra’s health unit agreed to acquire EOS Technologies, the technology arm of WA-based in-home health and care provider Silver Chain Group.

The Kloud deal is bigger in terms of value and is the latest in Telstra’s efforts to extend its capabilities as a technology solutions provider.

The telco had been steadily building its roster over the past three years, picking up unified communications solutions and contact centre provider North Shore Connections Group in 2013 and buying O2 Networks and Bridgepoint in 2014.

Telstra also folded Asian telecommunications and services provider Pacnet into its operations after buying it for $858m in 2014.

The NAS unit has been a consistent performer when it comes to adding to Telstra’s bottom line, posting revenue of $2.42 billion for financial year 2015.

It was the third consecutive year of revenue growth for the NAS unit and the telco and the Kloud acquisition highlights the telco’s commitment to continue its investments on the technology front.

Kloud, which has more than 80 customers across Australia and Asia, helps businesses transition their workloads and applications to the cloud and the multi-million-dollar acquisition will see Telstra bring its longstanding partner wholly under its wing.

Michelle Bendschneider, Telstra’s executive director: global enterprise and services, said the addition of Kloud significantly enhanced the telco’s managed services consulting capabilities.

According to Ms Bendschneider, the Kloud acquisition plays strongly into Telstra’s aim to leverage the strength of its core network to build new growth businesses.

“If you think about the technology landscape, everything needs to be connected, secured and enabled to be a mobile solution and we tick all three of these boxes strongly,” Ms Bendschneider said.

“Kloud’s expertise can make it even easier for our customers to transition their workloads and applications to the cloud.

“Kloud has been a terrific partner to Telstra and is in fact currently engaged in one of our most strategic projects.”

Kloud employs close to 150 people and the deal will see Kloud co-founder and managing director Nicki Bowers join Telstra’s global enterprise and services executive team.

“Nicki’s leadership is a big part of the value Telstra sees in Kloud,” Ms Bendschneider said.

Ms Bowers said Telstra’s growth ambitions in Asia and it’s reach in the enterprise space opened a host of new opportunities for Kloud and its technology.

“We have watched and worked closely with Telstra in their move into ICT services and are keen to become a more integral part of it,” she said.

The transaction is expected to be completed towards the end of next month.