Made in SA

Out of the incubator

Black-owned SMME Adapt-IT has grown, merged and emerged as Adapt IT Holdings, all in four short years.
1 March 2008

Adapt-IT is a KZN-based provider of information management solutions based on open source and proprietary platforms. In November 2007, it was announced that JSE-listed InfoWave Holdings and Adapt-IT would merge, and that the newly merged entity would be named AdaptIT Holdings*.

The AdaptIT Holdings group consists of AdaptIT, ApplyIT, InfoWave, InfoWave Internet Solutions and IntraSoft Technologies. Its primary business is the development and support of niche IT solutions. In fact, InfoWave started out as a service provider to a major sugar cane manufacturer. Today, it provides Oracle-based solutions to sugar producers globally. Adapt-IT founder and managing director Sbu Shabalala has been appointed CEO of the Group, while previous InfoWave CEO Tiffany Dunsdon is now the commercial director.

Starting small

Shabalala founded Adapt-IT four years ago. An employee of InfoWave at the time, he had seen the need for a black-owned IT business that provided information management solutions. InfoWave provided the seed capital and Shabalala created the business, developed the business plan and got his consultants on board.

InfoWave retained a 33 percent share in the business and provided the financial management services and financial grounding, which the company was founded on, Shabalala says.

"It allowed us to concentrate on the day-to-day software delivery and less on the financial management aspects of the business. It was a quid pro quo relationship where they got to do what they do best InfoWave has a huge depth [of knowledge] of management of IT businesses - and we were venturing into a complementary field, which required common vision, but was a new area in IT [for InfoWave]. So, we proceeded," he says.

AdaptIT grew to become a successful black-owned IT company, with an established customer base, including public sector entities. That InfoWave has seen fit to acquire the remaining 67 percent of Adapt-IT in a share transaction worth approximately R11.7 million, merge with the organisation and take its name, has to be an indicator of just how successful the company became.

Onwards and upwards

We're in the process of defining exactly the opportunities [the merged entity has] and going after them.
Sbu Shabalala, AdaptIT
A statement released by InfoWave at the time said: "The purpose of the merger is not only to diversify the group, but to take advantage of new market opportunities in South Africa and to extend the service offerings to our existing customers. The merger improves the black shareholding to 37.8 percent. We know that the entire group will benefit from and grow as a result of the successful entrepreneurial spirit of Sbu Shabalala and the Adapt-IT (Pty) Ltd team."

Said Shabalala, in the same announcement: "This merger will give us the ability to offer broader services and products beyond our current niche markets. It also provides the opportunity of leveraging synergies in terms of our diverse IT skills and talents within the group, and will go a long way to contributing to KwaZulu-Natal as a significant IT hub in South Africa.

"The rationale for the merger was that we already had a common company. I had been the founder and it demonstrated that I had the entrepreneurial ability and leadership ability to enable me to drive an IT company. As part of this, we decided that, for the growth of the group, we needed to have a common strategy that would ensure we enhance our organisation reputation-wise to leverage the things that give us the differential in the market."

These differentials include the fact that the company is a KZN-based entity, offering solutions to a diverse customer base across the globe. InfoWave operates in the sugar sector, ApplyIT in the process manufacturing sector and Adapt-IT works across various sectors. Each also has different technical specialisations - Oracle, Microsoft, and Microsoft and OSS respectively. "AdaptIT does Microsoft and is huge in OSS," notes Shabalala, "which is a strategy for government; government is going OSS. We are the largest in OSS in KZN and [we believe] the growth opportunities will come in those areas. Previously, we had been focused in just our niches; the growth will come in growing those niches to ensure we're delivering to new and existing customers," he states.

While it is business as usual for the moment, the months ahead will be rather exciting, Shabalala says.

"We're in the process of defining exactly the opportunities [the merged entity has] and going after them. The transaction allows us to formulate a group with a common strategy and for me to become the driving force as CEO of the merged group. [Our goal is to] drive growth in diverse areas, which will ensure we utilise the skills across the group to enter new sectors and areas of business."

A big step up

Company: Adapt-IT
Founded: 2004
Founder: Sbu Shabalala
Staff: 32
Turnover: R94.4 million
Merged entity: AdaptIT Holdings
Comprises: Adapt-IT, ApplyIT, InfoWave, InfoWave Internet Solutions and IntraSoft Technologies
Staff: 130
Combined turnover: R58.7 million

Single focus

Although Shabalala says there is no secret ingredient to the company's success, he points to the fact that it has mainly been AdaptIT's entrepreneurial drive.

"We are a group of 32 guys who shared a common vision of having a customer-centric focus in solution delivery, which led to our customers investing in our solutions. If I had to nail down one thing, it is delivering world-class software with a focus on the customer."

As Shabalala says, going forward, it will be business as usual, growth strategy notwithstanding.

"This means delivering the best solutions and services to our existing customers."

Given that, for many companies, such operations would be considered business unusual, Shabalala and the new AdaptIT may just be onto a good thing.

*The name change is still subject to shareholder approval.