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Labyrinth, the e-business consultancy that is controlled by Esat parent company BT, has launched its new strategy following the refocus of Esat.
With Esat Group preparing to more clearly divide its corporate services business from its residential telecom business, the company's e-business consultancy, Labyrinth, has also refocused. Until now, Labyrinth has spent much of its energy rolling out e-business solutions to companies of all sizes in Ireland, with services that included the set up of e-commerce Web sites and company extranets.
But with BT Ignite exerting more influence on its Irish subsidiaries and looking to squeeze more profits out of them, Labyrinth, as well as Esat, will now focus on the top 300 corporate clients in Ireland, as well as the government, for new revenues.
Esat Group acquired Labyrinth in 1999 for around IEP4 million and, following the sale of Esat to British Telecom in 2000, Labyrinth became part of BT Ignite, BT's services and solutions business. The Irish e-business subsidiary claims to have been consistently profitable over the last few years with IEP3.86 million in revenues in 2001, up 122 percent year-on-year. EBIDTA in that year was also up 167 percent to almost IEP1 million.
These numbers stand in stark contrast to the EUR74.6 million Esat is reported to have lost in the last three months of 2001 alone. Losses such as these are believed to be at the core of BT's refocusing of Esat, one that is thought likely to result in the re-branding of half the company under the BT Ignite name. The residential side will remain Esat, but the company has said it will concentrate its efforts on acquiring and serving more blue chip and government customers.
"We are not moving away from what we have done in the past, but we are moving into new areas," explained David McMahon, general manager of Labyrinth, at a press briefing. "We have grown substantially over the last few years despite the difficult market circumstances we have operated in; this continued focus on delivering solutions to the high-level corporate and state sectors is a natural progression for us," he said.
As part of Labyrinth's new focus, it has signed deals with content management software giant Interwoven and corporate portal builder Plumtree, both of which are also looking to expand their customer base in Ireland, the UK and Europe. Labyrinth will work with these two companies to roll out large Internet, extranet and e-commerce solutions to multi-site corporations.
And according to BT Ignite and Labyrinth, the Irish e-business consultancy will also begin to do more work in the UK in association with parent company BT Ignite. Already Labyrinth has helped roll out solutions for Liverpool City Council in the UK. The ramp-up of the firm's activities both at home and abroad, and its quest to attract a wealthier client base, is likely to see Labyrinth increase its employment number beyond 45 before year's end, explained McMahon.
"Within BT Ignite, we really don't have any other subsidiaries quite like Labyrinth," Paul Roche, general manager for e-business at BT Ignite told ElectricNews.Net. "We certainly have pockets that can do similar things, and we can contract out some of the work, but we have nothing as specialised and as focused as Labyrinth." Paul Roche declined to say whether Labyrinth would re-brand, but said it remained a possibility.
There remains some question as to how much of Labyrinth BT now owns. Executives at Friday's briefing declined to answer questions about ownership of the company, but Bill Murphy, chief executive officer of Esat Group who was on hand at the meeting, said, "The shareholder issue is being sorted out this month."
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