1 00:00:04,019 --> 00:00:06,930 Sean Aylmer: Welcome to the Fear & Greed Business Interview. I'm Sean Aylmer. 2 00:00:07,320 --> 00:00:09,839 Sean Aylmer: For some of us, the future is data centers, AI 3 00:00:09,840 --> 00:00:12,539 Sean Aylmer: and technology, for just a few others, like today's guest, 4 00:00:12,539 --> 00:00:14,670 Sean Aylmer: that's been the past or at least their world for 5 00:00:14,670 --> 00:00:17,910 Sean Aylmer: more than three decades. Macquarie Technology Group, which until this 6 00:00:17,910 --> 00:00:21,390 Sean Aylmer: year was Macquarie Telecom has been something of a perennial 7 00:00:21,390 --> 00:00:23,730 Sean Aylmer: thorn on the side of better known players initially big 8 00:00:23,730 --> 00:00:28,020 Sean Aylmer: telcos and nowadays cloud companies, data center players, cybersecurity groups, 9 00:00:28,410 --> 00:00:31,889 Sean Aylmer: founders David and Aiden Tudehope this week we're awarded the 10 00:00:31,889 --> 00:00:37,320 Sean Aylmer: Pearcey Medal for lifetime contributions to Australia's ICT industry. I'm 11 00:00:37,320 --> 00:00:40,920 Sean Aylmer: delighted to say David Tudehope, CEO of Macquarie Technology Group is 12 00:00:40,920 --> 00:00:43,740 Sean Aylmer: with me this morning. David, welcome back to Fear & Greed. 13 00:00:44,070 --> 00:00:44,760 David Tudehope: Thank you. Sean 14 00:00:45,389 --> 00:00:49,440 Sean Aylmer: Macquarie Technology, Macquarie Telecom. Why'd you start it right at 15 00:00:49,440 --> 00:00:50,010 Sean Aylmer: the beginning? 16 00:00:50,969 --> 00:00:54,059 David Tudehope: The business really came out of the deregulation of the 17 00:00:54,059 --> 00:00:57,060 David Tudehope: telecom sector. That was the origins. It was a time 18 00:00:57,060 --> 00:01:01,080 David Tudehope: where customers were called subscribers and there was a government 19 00:01:01,080 --> 00:01:04,979 David Tudehope: owned monopolist, and back then there was a thing called 20 00:01:04,980 --> 00:01:10,109 David Tudehope: casualties of Telstra. And into this industry that had been 21 00:01:10,109 --> 00:01:15,450 David Tudehope: treating customers poorly for forever deregulation was meant to change 22 00:01:15,450 --> 00:01:20,190 David Tudehope: things, and in we jumped. And we targeted business customers 23 00:01:20,190 --> 00:01:23,160 David Tudehope: because that's what I'd known from my shorter previous career 24 00:01:23,160 --> 00:01:26,489 David Tudehope: in the banking sector. And it was very plain that 25 00:01:26,549 --> 00:01:31,378 David Tudehope: business customers were being underserved and overcharged, and that really 26 00:01:31,380 --> 00:01:33,450 David Tudehope: became our purpose for the following 30 years. 27 00:01:34,410 --> 00:01:36,930 Sean Aylmer: So I want to get onto that and the whole 28 00:01:36,930 --> 00:01:39,539 Sean Aylmer: customer service thing, but you sort of have over the 29 00:01:39,539 --> 00:01:45,030 Sean Aylmer: 30 years taken on some real industry titans. Why? 30 00:01:46,379 --> 00:01:50,340 David Tudehope: Yeah, look, we look for markets which are underserved and 31 00:01:50,340 --> 00:01:54,270 David Tudehope: overcharged. And in telecom sector that was true when we 32 00:01:54,270 --> 00:01:57,929 David Tudehope: started the business, for sure. Surprisingly, and I say that 33 00:01:57,929 --> 00:01:59,730 David Tudehope: because people said to me, " Oh, of course they'll get 34 00:01:59,730 --> 00:02:02,549 David Tudehope: better and the industry will get better and the gap 35 00:02:02,549 --> 00:02:05,279 David Tudehope: will get closer and maybe they'll even overtake you." Here 36 00:02:05,279 --> 00:02:09,630 David Tudehope: we are 30 years later and the telecom sector is 37 00:02:09,630 --> 00:02:12,780 David Tudehope: still one of the worst sectors in Australia and indeed 38 00:02:12,780 --> 00:02:17,309 David Tudehope: around the world for customer service. Our sector generates twice 39 00:02:17,309 --> 00:02:21,449 David Tudehope: the number of complaints to the telco ombudsman as all 40 00:02:21,450 --> 00:02:24,119 David Tudehope: the banking clients to the banking ombudsman. We're twice as bad 41 00:02:24,119 --> 00:02:26,910 David Tudehope: as the banking industry, which I think is extraordinary. So 42 00:02:26,910 --> 00:02:31,230 David Tudehope: into that world, a business that's all about customer service 43 00:02:31,230 --> 00:02:36,780 David Tudehope: and transparency and not overcharging people cuts through because the 44 00:02:36,780 --> 00:02:38,100 David Tudehope: contrast is so stark. 45 00:02:38,849 --> 00:02:42,240 Sean Aylmer: Now you've morphed since those days to take on well 46 00:02:42,240 --> 00:02:45,360 Sean Aylmer: beyond telco, so just explain what you do now and 47 00:02:45,360 --> 00:02:47,610 Sean Aylmer: some of your competitors and how you compete with them. 48 00:02:47,850 --> 00:02:51,059 David Tudehope: Yeah, so every business we started came out of identifying 49 00:02:51,059 --> 00:02:54,840 David Tudehope: markets that were similarly underserved and overcharged. And we started 50 00:02:55,049 --> 00:02:59,249 David Tudehope: in the cybersecurity industry back in 2005 focusing on government 51 00:02:59,250 --> 00:03:02,040 David Tudehope: customers. Back then it was called E- Security. It was 52 00:03:02,040 --> 00:03:05,400 David Tudehope: a bit of a backwater in the IT world. And there 53 00:03:05,400 --> 00:03:08,820 David Tudehope: was a monopoly in Canberra with a large US company 54 00:03:08,820 --> 00:03:10,679 David Tudehope: that had bought up all the other businesses, and every 55 00:03:10,679 --> 00:03:13,529 David Tudehope: year they were increasing prices and every year they were 56 00:03:13,679 --> 00:03:17,309 David Tudehope: reducing the scope of their services and therefore charging for 57 00:03:17,309 --> 00:03:19,980 David Tudehope: everything above that. And we had a government client of 58 00:03:19,980 --> 00:03:22,740 David Tudehope: our telecom business who said, " Look, I'm not going to 59 00:03:22,740 --> 00:03:26,010 David Tudehope: stand for it anymore. This is outrageous. Can you provide 60 00:03:26,400 --> 00:03:30,059 David Tudehope: cybersecurity services for us that are compliant with the government 61 00:03:30,059 --> 00:03:34,049 David Tudehope: requirements for all government agencies?" And he said, " Look, if 62 00:03:34,049 --> 00:03:36,570 David Tudehope: you do a good job, Canberra is a small town 63 00:03:36,570 --> 00:03:39,300 David Tudehope: we'll spread the word and I'll put a good word 64 00:03:39,300 --> 00:03:43,860 David Tudehope: in for you with other clients." And we did, and to his credit, 65 00:03:43,860 --> 00:03:48,300 David Tudehope: he did. And now 18 years later, he's still a 66 00:03:48,300 --> 00:03:52,259 David Tudehope: client of ours, and we have gone from zero customers 67 00:03:52,260 --> 00:03:54,990 David Tudehope: in cybersecurity in Canberra to 42% of the federal government 68 00:03:54,990 --> 00:03:57,720 David Tudehope: market, and we literally won them one at a time. 69 00:03:58,170 --> 00:04:01,320 David Tudehope: That particular individual is still in the federal public service. 70 00:04:01,350 --> 00:04:04,469 David Tudehope: He's gone through four different agencies in his career. He's 71 00:04:04,469 --> 00:04:06,510 David Tudehope: brought each one of the four to us over time, 72 00:04:06,960 --> 00:04:09,360 David Tudehope: and he's been a man, true to his word and 73 00:04:09,360 --> 00:04:11,189 David Tudehope: has said to us, " You've got to keep earning it 74 00:04:11,340 --> 00:04:13,800 David Tudehope: Macquarie, but if you keep delivering, I'll keep putting a 75 00:04:13,800 --> 00:04:16,710 David Tudehope: good word in for you." And that's really what we 76 00:04:16,710 --> 00:04:19,590 David Tudehope: look for. Similarly, in the cloud market, we've expanded into 77 00:04:20,160 --> 00:04:22,979 David Tudehope: public cloud, which is inherently a do- it - yourself business 78 00:04:22,980 --> 00:04:26,879 David Tudehope: where you sign up for public cloud and you meant 79 00:04:26,880 --> 00:04:30,930 David Tudehope: to just manage it yourself unless you pay large premium. 80 00:04:30,930 --> 00:04:33,060 David Tudehope: Even then it's very tightly scoped as to what's in 81 00:04:33,060 --> 00:04:35,669 David Tudehope: and out of their service. So into that market, we've 82 00:04:35,670 --> 00:04:38,849 David Tudehope: brought service. We've also brought tools to manage public cloud 83 00:04:38,849 --> 00:04:42,058 David Tudehope: consumption, which is charged for on a usage basis and 84 00:04:42,059 --> 00:04:45,660 David Tudehope: it can easily skyrocket. So I guess that's really the 85 00:04:45,660 --> 00:04:48,420 David Tudehope: philosophy. It's really guided the markets we've chosen to expand 86 00:04:48,480 --> 00:04:51,810 David Tudehope: into and really been a bit of a compass as 87 00:04:51,810 --> 00:04:53,279 David Tudehope: we've navigated the last 30 years. 88 00:04:53,880 --> 00:04:55,560 Sean Aylmer: Stay with me, David. We'll be back in a minute. 89 00:05:01,650 --> 00:05:05,039 Sean Aylmer: My guest today is David Tudehope, CEO of Macquarie Technology 90 00:05:05,039 --> 00:05:07,710 Sean Aylmer: Group, and with his brother Aiden, winner of the Pearcey 91 00:05:07,710 --> 00:05:12,960 Sean Aylmer: Medal for lifetime contributions to the Australian ICT industry. Another 92 00:05:12,960 --> 00:05:16,828 Sean Aylmer: thing that the Pearcey Medal judges highlighted this week was 93 00:05:16,830 --> 00:05:20,820 Sean Aylmer: your championing of regulatory issues. I always think when you're 94 00:05:20,820 --> 00:05:24,089 Sean Aylmer: running a listed company, obviously you have to champion your 95 00:05:24,089 --> 00:05:28,110 Sean Aylmer: own interests, that's what shareholders want you to do, championing 96 00:05:28,110 --> 00:05:30,990 Sean Aylmer: regulatory issues it's kind of a fine line at times 97 00:05:30,990 --> 00:05:31,500 Sean Aylmer: though, isn't it? 98 00:05:32,160 --> 00:05:35,250 David Tudehope: Yes. It talks to our purpose around overcharging because it 99 00:05:35,250 --> 00:05:38,339 David Tudehope: was very clear that in telecom sector that customers were being 100 00:05:38,339 --> 00:05:42,510 David Tudehope: massively overcharged by Telstra, and even when competition came along, 101 00:05:42,750 --> 00:05:45,150 David Tudehope: it didn't change that much because it became a duopoly 102 00:05:45,150 --> 00:05:50,460 David Tudehope: and then oligopoly of sorts. So competition didn't come naturally. 103 00:05:50,880 --> 00:05:53,849 David Tudehope: And call charges kept increasing there for many years, and 104 00:05:53,849 --> 00:05:57,180 David Tudehope: we would definitely really champion the deregulation of the sector. 105 00:05:57,450 --> 00:05:59,549 David Tudehope: I mean, frankly, we fought for years for local calls 106 00:05:59,549 --> 00:06:02,460 David Tudehope: to be deregulated. Then the next big battle after we 107 00:06:02,460 --> 00:06:05,070 David Tudehope: won that one was fixed to mobile. And the whole 108 00:06:05,070 --> 00:06:09,960 David Tudehope: way Telstra threw lawyers at us, economists at us, consultancies, 109 00:06:09,960 --> 00:06:14,130 David Tudehope: lobbyists, leveraged their links with government to block competition the 110 00:06:14,130 --> 00:06:18,209 David Tudehope: whole way through, and that was a really hard fought 111 00:06:18,209 --> 00:06:20,880 David Tudehope: battle. There were some other good telecom companies that support 112 00:06:20,880 --> 00:06:23,760 David Tudehope: us in that journey, but they've frankly come and gone 113 00:06:23,760 --> 00:06:26,729 David Tudehope: over time. And we are very proud of the fact 114 00:06:26,730 --> 00:06:29,670 David Tudehope: that we have been able to be that challenger telecom 115 00:06:29,670 --> 00:06:35,039 David Tudehope: company that has benefited 25 million Australians by deregulating the 116 00:06:35,039 --> 00:06:38,400 David Tudehope: price of local calls and fixed to mobile and 1- 117 00:06:38,400 --> 00:06:41,550 David Tudehope: 800 calls and other things that brings down the costs 118 00:06:41,550 --> 00:06:41,880 David Tudehope: of living. 119 00:06:42,390 --> 00:06:45,419 Sean Aylmer: Do you still see yourself as a challenger, 30 years on? 120 00:06:46,139 --> 00:06:49,380 David Tudehope: We do partly through the service piece and partly through 121 00:06:49,380 --> 00:06:54,480 David Tudehope: the overcharging piece and developing new things to make both 122 00:06:54,480 --> 00:06:55,140 David Tudehope: of those better. 123 00:06:55,650 --> 00:06:59,910 Sean Aylmer: Okay. What about the Australian ICT? It seems like an old- 124 00:06:59,910 --> 00:07:04,440 Sean Aylmer: fashioned term, but the Australian technology sector as it stands 125 00:07:04,500 --> 00:07:07,409 Sean Aylmer: now, where are we, where are we going? 126 00:07:08,309 --> 00:07:10,770 David Tudehope: Well, the tech sector's a fun place because it's always 127 00:07:10,770 --> 00:07:13,440 David Tudehope: changing. And certainly what's kept me in the industry of 30 128 00:07:13,620 --> 00:07:15,720 David Tudehope: years is that what you would talk about today is 129 00:07:15,720 --> 00:07:19,170 David Tudehope: different in a couple of years time and very different 130 00:07:19,350 --> 00:07:23,280 David Tudehope: in five years time, almost irrelevant. So it's a sector 131 00:07:23,280 --> 00:07:27,990 David Tudehope: that's evolving constantly and faster than other sectors. It's also 132 00:07:27,990 --> 00:07:31,530 David Tudehope: a sector where as a result, today's roosters can become 133 00:07:31,530 --> 00:07:33,900 David Tudehope: tomorrow's feather dusters. I mean, the number of tech companies 134 00:07:34,290 --> 00:07:37,500 David Tudehope: that are one moment on neon signs next moment they're gone 135 00:07:37,950 --> 00:07:44,040 David Tudehope: is substantial. And therefore, just to sustain a business, you've 136 00:07:44,040 --> 00:07:47,969 David Tudehope: got to constantly adapt, constantly evolve, and you can make 137 00:07:47,969 --> 00:07:50,460 David Tudehope: a mistake, but you can't make too many mistakes. And 138 00:07:50,460 --> 00:07:52,260 David Tudehope: if you do pick the wrong technology, you've really got 139 00:07:52,260 --> 00:07:54,989 David Tudehope: to pivot within a year or two, otherwise you can 140 00:07:54,990 --> 00:07:57,179 David Tudehope: get run over. So it makes it a business where 141 00:07:57,179 --> 00:08:00,150 David Tudehope: you'll be engaged in. You've got to constantly be looking 142 00:08:00,150 --> 00:08:02,040 David Tudehope: out on the horizon. I'd say as a result, people 143 00:08:02,040 --> 00:08:04,409 David Tudehope: in the tech sector tend to be very open- minded 144 00:08:04,410 --> 00:08:09,060 David Tudehope: about what might be coming up next and less probably 145 00:08:09,300 --> 00:08:12,150 David Tudehope: transfixed like they're to other industries on who's the biggest 146 00:08:12,150 --> 00:08:15,660 David Tudehope: today. They're probably more looking for who's growing and who's 147 00:08:15,660 --> 00:08:19,499 David Tudehope: challenging us tomorrow. And there's no better example that right 148 00:08:19,500 --> 00:08:22,500 David Tudehope: now. I think most of the tech sectors looking over their 149 00:08:22,500 --> 00:08:24,780 David Tudehope: shoulder at AI thinking is this an opportunity or a 150 00:08:24,780 --> 00:08:27,840 David Tudehope: threat? And I think there will definitely be today some 151 00:08:27,960 --> 00:08:30,780 David Tudehope: large tech companies that won't be there tomorrow, and there'll 152 00:08:30,780 --> 00:08:32,790 David Tudehope: be some AI companies you haven't heard of that will 153 00:08:33,179 --> 00:08:35,520 David Tudehope: one day be on those neon signs. 154 00:08:35,969 --> 00:08:38,940 Sean Aylmer: So what next for Macquarie Technology Group then? 155 00:08:39,570 --> 00:08:42,119 David Tudehope: Well, I think certainly, we see AI as part of 156 00:08:42,119 --> 00:08:44,550 David Tudehope: our future. We see it from a data center business 157 00:08:44,550 --> 00:08:46,588 David Tudehope: point of view. Probably most obviously, we are building new 158 00:08:46,590 --> 00:08:50,520 David Tudehope: data centers built for AI for the concentration of power 159 00:08:50,670 --> 00:08:53,069 David Tudehope: that they need to support them. I think the other 160 00:08:53,070 --> 00:08:55,889 David Tudehope: piece is that from a point of view of cloud 161 00:08:55,889 --> 00:08:59,130 David Tudehope: and cybersecurity, just as the hackers are now using cybersecurity 162 00:08:59,190 --> 00:09:03,750 David Tudehope: so too we're putting AI into the defense as effectively 163 00:09:03,750 --> 00:09:07,920 David Tudehope: that arms race only accelerates. And our cloud business, we 164 00:09:07,920 --> 00:09:10,468 David Tudehope: see AI as a very important part of the type 165 00:09:10,469 --> 00:09:13,530 David Tudehope: of clouds we manage. So we think it's a real 166 00:09:13,530 --> 00:09:16,020 David Tudehope: benefit to our business, but it's one where it is 167 00:09:16,020 --> 00:09:18,630 David Tudehope: evolving so quickly. It's something that we think will be 168 00:09:18,990 --> 00:09:21,990 David Tudehope: a really critical opportunity for our business going forward and 169 00:09:21,990 --> 00:09:25,020 David Tudehope: other businesses that embrace it, as well as like everybody 170 00:09:25,020 --> 00:09:27,570 David Tudehope: else using AI to make our own business better on 171 00:09:27,570 --> 00:09:30,030 David Tudehope: the inside as well. The other thing is looking forward, 172 00:09:30,360 --> 00:09:32,400 David Tudehope: we think cybersecurity is a huge part of the future. 173 00:09:32,820 --> 00:09:37,679 David Tudehope: Cybersecurity is obviously high profile today, which certainly wasn't all 174 00:09:37,679 --> 00:09:40,140 David Tudehope: those years ago, but that's a good part about it. 175 00:09:41,040 --> 00:09:43,290 David Tudehope: These days, you're pushing through an open door. But I 176 00:09:43,290 --> 00:09:48,450 David Tudehope: think the sophistication of the hacking threats means that the 177 00:09:48,450 --> 00:09:51,330 David Tudehope: level of complexity for the customer has also gone up. 178 00:09:51,870 --> 00:09:56,250 David Tudehope: And also the challenge for regulators and law enforcement's gone 179 00:09:56,250 --> 00:09:58,770 David Tudehope: up. So the whole game has become more challenging, and 180 00:09:58,770 --> 00:10:01,050 David Tudehope: we think there's a great opportunity for Macquarie to add 181 00:10:01,050 --> 00:10:04,199 David Tudehope: value both to our corporate clients and our government clients 182 00:10:04,740 --> 00:10:07,799 David Tudehope: in this world of escalating cyber threats. 183 00:10:08,340 --> 00:10:10,199 Sean Aylmer: David, thank you for talking to Fear & Greed. 184 00:10:10,440 --> 00:10:11,039 David Tudehope: Thank you, Sean. 185 00:10:11,639 --> 00:10:15,600 Sean Aylmer: That was David Tudehope, CEO of Macquarie Technology Group. This 186 00:10:15,600 --> 00:10:18,179 Sean Aylmer: is the Fear & Greed Business Interview. Join us every morning 187 00:10:18,179 --> 00:10:20,940 Sean Aylmer: for the full episode of Fear & Greed, Australia's best business 188 00:10:20,940 --> 00:10:23,309 Sean Aylmer: podcast. I'm Sean Aylmer. Enjoy your day.