Sunday, April 24, 2011
  Endace: Being first and going fast
NZ Herald March 16

Every second millions of electrons stream across glass or wire networks, pulsing on-off, building into patterns that turn into numbers and words and pictures and whatever the human imagination comes up with.
Many firms are looking for ways to trap that packet information to look for other patterns, good, bad, even dangerous.
New Zealand firm Endace has got further than most, growing from its origins in Waikato University labs 15 years ago into a global company supplying network monitoring technology to some of the world's largest telecommunications and financial services companies and government organisations.
Growth is accelerating and the company is looking to hire more talent for its Hamilton and Auckland research and development labs and for its global sales team so it can stay ahead of the pack.
It has got a $6.7 million infusion of Government cash over the next 36 months though the "funding winners" strategy that replaced the universal research and development tax credit.
"We're looking for the next generation of developers to take us to the next level," says chief executive Mike Riley, an Englishman who followed his New Zealand-born wife back here after a career with high-tech firms in the UK and Boston.
When Riley joined Endace four-and-a-half years ago it had fewer than 50 staff and revenue was in the low millions. Last year it sold $31 million in technology. Current headcount is about 150 and, if the right people can be found, could be 200 by the end of the year.
Endace's accelerated growth has involved a move up the value chain.
Instead of selling a US$7000 ($9400) card that plugs into a server - a geek to geek sale - the firm is now more likely to sell a $40,000 appliance that sits on the network and comes loaded with all the software and analysis tools needed to give "the power to see all."
"We guarantee we can monitor and record every incident on a network. The only way to do that is deliver the complete solution," Riley says.
Incidents like Wikileaks and the subsequent attacks on networks by the Anonymous collective has made organisations more aware of the need for good packet security. Endace allows businesses to track and visually identify security breaches and stop them happening at a network level in real time, rather than by a post-hack examination of logs.
It is looking to fill a range of positions, including another 20 in R&D. It set up an Auckland office in anticipation of the expansion, with the Auckland and Hamilton teams linked through high definition video conferencing.
"We're looking for the best of the best, both recent graduates and people with experience in this field."
While the company has many international staff, Riley is keen to hire New Zealanders.
As the solution grows into a fabric that sits across networks, there are more software layers to build, each requiring specialist expertise. Selling complete solutions means selling to CIOs and higher, and having sales and implementation teams who understand large and complex networks.
"We need not just more people but more skill sets," Riley says. "We are bolstering quality assurance and customer support, because we don't just test components but complete systems."
These are systems that can't go down.
"We have customers who tell us five nines (99.999 per cent availability) isn't good enough. So they don't buy one, they buy two just in case."
Endace finds it is competing with the traditional network management vendors such as Cisco, IBM, HP and so on, as well as network security vendors like McAfee, Symantec, Juniper and Cisco again,
"Rather than have different vendors supplying part of the solution, why not see everything on the network all the time. We are a consolidation play," Riley says.
In common with many New Zealand tech companies, Endace doesn't play the patent game, relying on levels of encryption tricks to keep its secret sauce safe from prying eyes as well as making sure it stays a head of the technology curve. "Be first and go fast," Riley says.
Endace is listed on London's AIM market, with about 7 per cent of the company held by large institution shareholders in the United States and UK and 20 per cent by founders and staff.
It has an employee share scheme, adopting the norms of the technology companies with whom it is competing for talent. "I'm a huge believer in stock options. We are a global company that happens to be in New Zealand."
Riley says the big selling point for getting "the best of the best" is the technology. "It's hard to find places where you are working on as cool a technology as Endace."
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