Peter Kazacos is fascinated by magic. Harry Houdini made the substitution trunk famous by restraining an assistant in the trunk, and standing on top of it, gradually covering himself with a sheet. Moments later the sheet dropped to reveal his assistant atop the trunk and Houdini shackled inside.
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The trick is an apt metaphor for his career- having founded Kaz Computer Services in the 1980s he sold it to Telstra, worked for Telstra then helped it sell off Kaz bit by bit. He set up his latest venture, listed technology company Anittel, planning to stay on top as chairman, only to find himself back inside managing and growing the business.
Kazacos (58) has been waving his business magic in the local IT scene for the last 30 years. Late last year it blitzed the opposition to emerge as the clear winner of the Deloitte Technology Fast 50 list with a 1022 per cent growth rate. It's the fourth time that Kazacos has collected an award for being on the Tech Fast 50 - twice for Kaz Computer Services and now twice for Anittel.
As a boy growing up in Bankstown, in Sydney's west, it wasn't obvious what the future held. The son of Greek migrants who ran a fish and chip shop, Kazacos grew up working in the shop, helping his mother who had been widowed when Kazacos was just three years old. While his school picked him as possible teacher-material, Kazacos discovered an early aptitude for technology, wiring up local cubby houses and turning tape recorders into sister-alarms.
He opted to study electrical engineering at the University of NSW, eventually completing two degrees - a double major in applied maths and computer science and electrical engineering, while running a coaching college for school students in his spare time. It was during this period that he started writing and importing software to sell.
His first full time job after graduation was in the graduate trainee programme with Overseas Containers, where he remained for seven years developing a real expertise in IBM's System 38 computers. From there Kazacos moved across to Aspect Computing, again working with System 38s and mainframes, and designing what would become the Lansa development environment. Over the years he developed a series of applications, including a superannuation management system, for various clients.
'I drove to work every day and wondered if I would get to retirement and wonder what would happen if I had my own company. What happened was in early 1988 a guy had left Aspect and came to me and said that AMP was looking for a new superannuation system and that their internal people said it would take three years.' Kazacos took the plunge, left Aspect, bought a licence for Lansa and bid for the AMP job.
The gamble paid off and Kaz had its first major client. 'We bought one of the first AS 400s in the country for AMP,' and as the business ramped with more clients and more, bigger sales Kaz was appointed an IBM Business Partner.
'The turning point came when there were three companies that wanted to buy computers - but don't want to run them. The official word for this was outsourcing.' Kaz was also running the AMP's AS400s, alongside CSC which had the outsourcing contract for the mainframes, and then won another big contract from Nestle. Kaz was on the map.
He acknowledges that a lot of his success comes down to being in the right place at the right time and securing strongly branded clients early in the piece. 'I've had a lot of luck, but I've made the most of it.'
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It valued the company, which by now had 200 staff, at $120 million. It then started to grow fast; buying AMP's superannuation administration business which catapaulted the company into the business process outsourcing market, and then buying Aspect which also took it into the Canberra market.
By the time David Thodey left IBM for Telstra Kaz had become the largest Australia IT business, for a period ranking third in the market behind IBM and EDS. Thodey already knew of the company and was receptive to his team's suggestion that Telstra consider buying the company.
Married with a son and two daughters Kazacos gave the proposal a lot of thought. 'You can continue to go all in on the roulette wheel - but what happens when you've made a fair bit? When I did the calculation, at the time I had about 20 per cent of the company,' says Kazacos who relished the opportunity to work as a senior executive in a much larger organisation.
In 2004 he sold the business to Telstra for $330 million, with his stake worth $66 million. 'After six months I knew Kaz inside Telstra wasn't going to work,' says Kazacos. 'I saw the opportunity in the space for an IT-telco company - part of proposition was this combination. But the big thing that happened was they couldn't understand what it was to be an IT company.
'The defining moment was when a sales guy came in and said there was a big opportunity for a large deal at Sensis and we are bidding. I said, bidding? Does IBM get HP to bid? They ran (the separate Telstra businesses) as stovepipes.'
In 2009 the Kaz computer services business was sold to Fujitsu for $200 million, but Kazacos says all the other bits of Kaz had been sold off earlier - including superannuation administration - which amounted in total to more than the original $330 million it paid.
Kazacos took a break, and with his wife set up a charitable foundation with some of the money he had made from the sale to Telstra. After a few months being sent on errands he decided to get back on the horse and start a new business, which has now grown into become Anittel.
Although Kazacos hadn't intended to run the business day to day, he has eventually returned to the helm, although the focus this time is on serving the IT needs of the SME sector.
'We are over 200 people now - at this stage with the Kaz business, the contracts we had were in the $millions and multi millions. Here there is like degrees less - you are talking of contracts people paying $500 a month or $1000 a month. It's different orders of magnitude - to support a public company management style you need a lot of transactions.'
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Separately he's invested in Kaz Finance 'to do loans and home loans' and Kaz Property - to link law and property (his son has his own law firm). As Kazacos says; 'It's a whole chain.'
After achieving growth north of 1000 per cent last year all eyes are on what the company can achieve in 2012 - but Kazacos is reining in his growth ambitions to ensure that the business is efficient and profitable. 'Growth costs and you have to invest in the growth. Let's look at getting a result on the positive side of the ledger and we've done that.
'The other thing that is important to us is selling our full portfolio through to our customer base. Each region is usually buying one flavour of our product - we've moved most of them to our new contracts, but although some moved across not all of them partake of our telco offering so we are doing that cross selling. It's taking longer than expected because the relationships are different and different geographies have different capabilities of taking up our offering.'
Meanwhile Anittel has signed up to be an NBN provider which Kazacos says will allow it to sell a range of communications and cloud computing offerings to its customer base.
Kazacos, who turns 59 at the end of the year, thinks; 'I'm involved in too many things.' Besides the various businesses where he has an executive or board role there's his foundation to run; a farm in Bowral to visit on weekends; a collection of 30 classic pinball machines to tinker with (which means his car is garaged on the street); grandchildren to spend time with; and magic to perform.
