The Friday Interview: Basil Bailey, Xpert Technology

16 Jan 2004

Such is the pace of change in the IT industry that 17 years is the equivalent of a lifetime in most others. To Basil Bailey (pictured), his career must sometimes appear as a potted history of the Irish IT industry.

Before taking up his present position as chief executive of IT services group Xpert Technology last September, he held senior positions at Horizon Technology Group, Worldcom, Esat Telecom, AST, Wang Laboratories and Nixdorf Computer. And the TCD Geology graduate is still 20 years from retirement age.

A brief glance at this CV confirms how transient and fickle the industry has been: companies such as Wang and AST that were once global players are no more, others such as Esat got swallowed up by bigger players, while Worldcom’s troubles need no retelling. One of the lessons Bailey has learned from his involvement in these companies – from his role as marketing manager of Wang in particular – is that being a technological powerhouse does not guarantee survival. Far from it.

“As the name indicates, I think Wang Laboratories was fundamentally a research company rather than a marketing company. I think they got caught up in the rush towards open systems; they didn’t make that move earlier enough and stuck to proprietary platforms. You’ve got to be absolutely in line with the market trends out there and that’s absolutely as important as being innovative,” he argues.

Not much more than a decade ago – in the late Eighties – Wang was considered a major player, tipped as the next IBM, while AST, which Bailey subsequently joined as Irish country manager, could have become the dynamic player that Dell is now, he feels. This was another tough lesson for Bailey: that, when you are part of a multinational, the influence you can wield as a small Irish operation is minimal. “AST started off around the same time as Dell. The market was wide open at that stage. Indeed, from a standing start we drove AST to be number one in retail and number two overall, ahead of Dell. The unfortunate thing is that while you can be extremely successful from the Irish context, as happened with both Wang and AST, when things start happening on the international arena, Ireland is a small market and you can get caught up in things beyond your control,” he explains.

Having experienced life in the unpredictable world of the multinationals, it must come almost as a relief to Bailey to find himself at the helm of a solid Irish-based company that will celebrate its 20th anniversary this year – a year that is shaping up be to considerably better than the most recent ones. “I’m cautiously optimistic about the year ahead,” he says. “The stopper’s not off the bottle yet but I think people are definitely investing. The IT sector has been starved of innovation and money for a long time. People have tended not to invest a lot of money in innovative new infrastructure and before we see huge growth in other areas I think that will all have to be backfilled.”

Xpert Technologies is what is known in the US as a ‘VAR’ or value-added reseller: not only does it sell hardware – mainly HP/Compaq storage arrays and high-end servers and Cisco networking gear – but it does the system integration piece as well to ensure that the technology is optimised for a particular customer.

For Bailey, the days of making money through box shifting are over; the future lies in offering customers a unique technical solution that gives them competitive advantage. This can only be achieved, he believes, through having a team of highly qualified and talented engineers and technicians. In fact, Bailey argues that this business model which is being widely adopted within the IT services industry is pertinent to the Irish economy as a whole, especially given the emerging competition coming from low-cost economies. His opinion was only reinforced by the decision announced by Philips this week to move its shared accounting centre from Dublin to Lodz, Poland.

The skills issue troubles him because he is not convinced that the IT industry has the resources it needs to meet rising demand. He points out that the dotcom implosion and telecoms crash have taken the gloss off what not long ago was a swaggering industry and caused people to leave it in droves – resulting in a worrying skills deficit.

The other major challenge he sees facing the economy as a whole is how to recover ground lost in terms of internet penetration and broadband. As former head of Esat’s Small Business division, Bailey admits to having a “jaundiced” view of the whole issue but he clearly finds it hard to hide his frustration at what he sees as a huge opportunity thrown away. “At Esat five years ago we were shouting long and hard about this and five years later we’re only talking about 16,000 DSL customers or whatever it is. It’s appalling how as a country we’ve allowed ourselves to slip. I would expect that countries like Slovenia would have better infrastructure than we would have – and that’s bad.

“A lot of the screwdriver operations and call centre stuff is going to cheaper places so we need to base ourselves on having the right skills but to do so we need to have the proper infrastructure,” he concludes.

By Brian Skelly