Datacraft says customers holding off on Vista

SINGAPORE--Most businesses that Datacraft has been speaking to, have no immediate plans to switch to Windows Vista, according to the systems integrator's head honcho.

Speaking at a media briefing Friday on the company's latest fiscal-quarter results, Datacraft CEO Bill Padfield said: "Most of the clients we speak to are not planning to migrate to [Windows] Vista in the short term."

Despite the buzz around the new operating system, businesses have their eyes on Windows XP. Padfield noted that although the switch to Windows Vista is a "great migration strategy", and the new operating system "looks like a pretty robust product", the "big migration that is happening at the moment is [that] people are moving up to [Windows XP]".

Padfield said that businesses that have been using Windows ME, Windows 2000 or even Windows 98, now realize that these products are going off support and they need to migrate to Windows XP.

This migration to Windows XP spells an opportunity for the Singapore-based systems integrator which, as part of its "focus on infrastructural optimization around Microsoft", will help its clients in patch management and software distribution, Padfield said.

"As and when [customers] migrate to [Windows] Vista, it's another opportunity for us to gain benefits from upgrading desktops, upgrading e-mail systems, upgrading servers and upgrading networks--it's a great opportunity," he added.

"Of the six lines of business, the Microsoft one is still the smallest, but it's also the fastest growing," Padfield said, adding that "the focus on Microsoft is certainly paying off and [Windows] Vista will help, but it won't help in the short-term."

Stellar first quarter
Datacraft's revenue for the first quarter of fiscal 2007 ended Dec. 31, 2006, grew 7 percent year-on-year to US$128.7 million while profit after tax increased 47 percent year-on-year to US$6.2 million.

The company ended the quarter with the "highest backlog" in five years at US$156 million, boosted by growth in annuity service contracts as well as hardware orders, Padfield said.

"Clearly, our strategy of focusing on more profitable, services-attached business and emphasis on productivity has paid off," he said.

Padfield added: "Going forward, the [second quarter] outlook remains positive underpinned by a healthy backlog, although overall gross margin may moderate due to the increase in hardware backlog."

"The prevailing market trends look favorable, and demand for our solutions and services remains healthy, particularly in the areas of IP convergence and multi-sourcing," Padfield said. "Our priority in [fiscal 2007] is to continue to drive services opportunities and build on our solid fundamentals by continuing to execute well."

According to Padfield, with the exception of East Asia, other markets in the region including India, New Zealand, Greater China and Asean "outperformed with positive revenue growth". East Asia, he said, saw a decline in revenue compared to the same period last year, which was primarily due to Japan.

"Asean is enjoying some robust growth at the moment--all countries in the region are doing well, [with] particular successes in Singapore, Malaysia and Indonesia," said Padfield.

Asean's revenue contribution grew from 30 percent in the first quarter of 2006 to 34 percent in the first quarter of 2007. During the same period, Greater China's revenue share grew marginally from 20 percent in 2006 to 21 percent in 2007. The East Asia market, however, shrank in terms of revenue, from last year's 22 percent to 17 percent in the latest quarter.