Hubify has updated its ongoing arrangement with Optus, signing a new five-year deal to sell Optus Enterprise services to Australian businesses.
The new deal, which comes into effect from 1 April, is focused on the enterprise market and has an estimated revenue value of approximately $12 million based on the current run rate.
The deal overrides one it signed in April 2021 for selling services to small businesses and large enterprises as since then the service provider expanded its offering to include managed services and cyber security offerings to medium and large enterprises.
As a result, the old deal is to be terminated on 31 March.
"The various partnerships and agreements between Hubify and Optus have benefited both companies for over eight years across Hubify’s mobility, managed services and smart data divisions. We look forward to the next five years and continuing our strong track record in delivering enterprise sales growth,” said Hubify CEO Victor Tsaccounis.
“These changes will enable the Hubify team to remain focused on scaling the business across all divisions leveraging our leading ICT product and services catalogue.”
This deal update has no impact on its IT managed services deal with the telco that was inked in October 2021, which at the time of its signing was worth $4 million in annualised recurring revenue.
In addition to signing the new arrangement, Hubify is to exit Optus’ Small Business Program and is expected to receive a contract payout from the telco of $2.3 million.
“An average small business customer in the exited division had under 10 employees and requires a basic need for ICT support and managed services,” Hubify said.
“In 1H FY23 revenue in the Optus Small Business division (the business being exited) declined by 31 per cent and its territory sales model was no longer compatible with Hubify’s strategic focus and national sales approach.
“The changes are in line with the company’s strategy as a leading ICT and managed services provider to Australian organisations who value personalised service, reliability and forward-thinking solutions.”
By exiting the program, Hubify’s cash position will improve to over $4.6 million and reduce annualised administration costs by $1.7 million.
The boost in its finances will no doubt help Hubify’s bottom line, as its FY22 results, which released in August last year, saw it end up with a $1.9 million loss after building up its enterprise managed services provider (MSP) business.