Data#3 to crack CMO buyers with wi-fi investment

Data#3 has revealed more detail of the strategy behind its $2.5 million investment in Discovery Technology.

The giant Brisbane-based reseller has acquired a 42.5 percent stake in the Sydney firm, whose CCX wi-fi analytics software can be used to monetise wireless networks used in shopping centres, universities, sports stadiums and other locations.

For example, it can track the location of connected devices in a shopping centre, sending push notifications about special offers when customers are nearby.

Speaking to CRN on Thursday after announcing Data#3's full-year results, chief executive John Grant said the acquisition was strategic, in that it would help Data#3 speak to those business-side buyers who invest in public wi-fi, especially marketing departments.

Gartner has predicted that by 2017, the CMS, or marketing department, will hold a greater IT spend than the CIO.

"The Discovery investment is really quite strategic," said Grant. "There are two aspects to it. It is an investment in a company that has the potential opportunity for enormous takeup. Wi-fi is exploding. [Companies say] we can attract people into our premise if we give them a free wi-fi."

The Discovery tool adds a layer of analytics over the top, which is attractive to marketing teams and should help Data#3 access these people within customer organisations, who Grant called "the business consumer group".

"We traditionally work with the IT folks but with Discovery we work with the business folk. Discover gives us an an equity position and a reselling opportunity to drive potential pretty significant wi-fi sales. It is a lead-in to our traditional wi-fi business."

Discovery CCX currently only works with Cisco – and Data#3 is a gold Cisco partner.

Brendan Williams, Discovery’s co-founder, said: "Over the last two years we’ve made significant headway in developing and taking our wi-fi analytics solution to market, but this is a new venture for us and having Data#3 as a strategic investor strengthens the relationship we have with Cisco and will provide us with the financial support, guidance and stewardship a typical 'start-up' technology requires to deliver the outcomes we see are possible."

While it is currently an arms-length investment, Data#3 has the option to take full ownership of Discovery in 2017.

In-store wi-fi has become a tool to lure in punters, such as last year's implementation of Aruba wireless technology by Emerging Systems across 190 KFC restaurants in Australia.

Data#3 reported its full-year results yesterday, with a rise in revenue to $833.6 million, its best-ever results, but a heavy fall in net profit after tax to just $7.5 million.