New player tries NZ market
Prepared for New Zealand Herald November 26, 2008
The day Australian listed software company Comops opened a New Zealand office, the country officially went into a recession.
It’s not an auspicious start, but there is always room even in the toughest times for a vendor to identify where its solution to standard business problems will be a better fit for the customer’s circumstances.
Comops has been here before, selling software through IBM in the 1990s, and has a number of existing customers for a range of products.
Its roots go back to a 1972 computer bureau, whose owners soon realised it needed to be offering its own applications. Being engineers, they named their product BMS, or Business Management System.
Despite any apparent marketing zing, they developed a loyal customer base ranging from small to large organisations.
In the past couple of years Comops has developed an appetite for expansion, fleshing out its product range with the acquisition of a workforce management and rostering solution, an occupational safety and health tool and a performance management solution.
It’s finally found exporting, something Australian companies are often slower about than New Zealanders, who don’t have the luxury of a 20-million person domestic market.
“We feel New Zealand is a good market for our types of products so we’re reinvesting,” says executive director Cameron Brown.
For the jump across the ditch it hired Mark Heard, who fronted Ariba’s expansion into New Zealand and more recently held down enterprise sales roles at Jade and Telstra New Zealand.
Its rostering solution, which allows fine tuning of skills and shifts, has already been picked up by Sky City and several district health boards.
That should mean nursing staff with appropriate experience get assigned to the operating theatres where they will be most useful – or dealers to the tables they know how to play.
Analyst Ullrich Loeffler from International Data Corporation says putting in a local team is smart thinking, given there are cultural and resourcing issues to contend with.
“Some Australian companies see New Zealand as another state rather than an individual market, and they don’t put in the required resources,” Loeffler says.
“They are similar but not identical markets, so some localisation is require.
He says while the top of the enterprise application market has consolidated around SAP and Oracle, with Lawson picking up some of what’s left, further down it’s a fragmented picture, with a lot of niche operators and local developers jostling for share.
“There’s anything from 60 to 80 vendors we try and keep track of,” Loeffler says.
Doing well in recent times has been SAP’s Business One package, which is sold through systems integrators.
Microsoft has its own network of resellers for its Microsoft Dynamics range, which pulls together a bewildering range of products and packages and throws it out to the market.
Software as a service is also starting to gain traction, with companies going online to assess applications from the likes of Salesforce.com.
Loeffler is also detecting more demand for MYOB, which has beefed up its offerings beyond the home and micro business level with the acquisition of products like the New Zealand-developed Exonet package.
“Lots of the technology investment here is seen as cost cutting designed to optimise processes,” he says.
“Back end applications like ERP can reduce operational costs, so we see a lot of interest coming.
“Companies will put more focus on return on invest.
“For smaller companies, the automation of back processes is of less importance. They are more likely just to have a bookkeeper coming in once a week.”
Mark Loveys, the chief executive of Auckland software development and integration company Enprise, has experience in both Exonet, which he was an original shareholder in, and as an SAP Business One reseller.
“There is a shift to software that can help businesses reduce costs,” Loveys says.
“Things are much more competitive in the New Zealand market. We really have to work hard for sales. A lot of businesses are putting purchases off until the next calendar year.”
Enprise is the largest Exonet vendor with more than 300 sites.
“MYOB has positioned Exonet, renamed MYOB Exo Business, as the natural upgrade for the MYOB community as their businesses grow, so there is a huge amount of business coming from that,” he says.
Because the products were evolving on similar lines, Enprise recently sold its New Zealand Business One operation to Eagle Technology to avoid conflicts of interest.
It retains an international involvement in Business One, selling a job costing module which at US$995 a seat is providing a welcome boost to the Enprise accounts as the kiwi dollar weakens.
Sales have doubled this year on last, and it is now it at about 200 sites worldwide, with sales being driven by SAP’s Business One network rather than requiring effort from Enprise.
Another product line, the EMS Cortex provision software for application hosting companies, is also generating strong international sales.
“Most of our revenues now come from offshore,” Loveys says.