ASX-listed technology services provider Data #3 has moved to slowly acquire wireless analytics company Discovery Technology over the next three years, as it looks to find new avenues to sell products and services to businesses.
The deal, which could be worth $2.5 million in full, will give Data #3 the option to purchase an initial, minority stake in Discovery next year with options to fully acquire the company by June 2017.
Data #3 managing director John Grant said the deal was structured to give the best value for the existing owners of the company.
Discovery Technology makes software to analyse network traffic on wi-fi networks, and provides the ability to track users by their indoor location, or push advertising to those connected to the wi-fi network.
The software, which Data #3 already resells, is used in shopping centres, airports and hospitals.
Mr Grant said the acquisition was an attempt to gain a foot in the door of potential new clients by talking to departments other than IT and was one of several potential aquisitions the company was looking at to expand its sales capability.
“The discussions that Discovery has with organisations are with marketing teams and operations, not with IT,” he told The Australian Financial Review. “The influence in IT spend these days is shifting progressively more to end users, which is where it should be. It’s a different way in, more influential and less competitive.”
The move to increase analytics over such networks has also raised privacy concerns among consumers, amid fears shopping centres are using wi-fi networks to determine a user’s location and shopping habits even if they don’t connect to the network.
Telstra retail group executive Gordon Ballantyne recently said that the telco’s plan to roll out a national wi-fi network in public areas and using home wireless networks would not be opened to third-party marketing and advertising firms for analytics.
Mr Grant said he was aware of the concerns.
“People sign up to wi-fi networks, it’s a choice,” he said. “The fact is they are signing off on that and as soon as they give their approval, they can choose how to proceed with that. If they opt in they’ll get serviced the full range of things that can be delivered across a wi-fi network.”