How is the Canterbury software technology sector faring in 2012?
It’s certainly been a hard two years since the first quake shook in September 2010, and all our local companies had to dig deep and learn the art of business survival. There are lots of great stories of local tech firms improvising and co-operating on shared office space, equipment and other facilities - and now we’ve definitely made it through the worst. In fact, we’re starting to see clear signs of a healthy export technology sector emerging - leaner and stronger.
Established Christchurch-based technology firms like Tait, Jade (now including its Wynyard subsidiary), SLI Systems, Trimble, Sungard and Payglobal have been joined by a new wave of inward investment from firms such as Orion Health, Adscale, Diligent and HP. Trade Me has also expanded its software development team down south: welcome everyone!
In addition, we’ve seen a few companies change hands: Sungard acquired Asset Finance solution company Northern Arch, GE Energy bought Commtest and accounting software firm Acclipse is now part of Dutch-owned CCH Wolters Kluwer. It’s good to see confident investment in our local software companies, helping these businesses grow to the next stage as part of a larger parent.
Perhaps most exciting is all of the startup activity that’s bubbling away in Christchurch - there are lots of small software innovators with great ideas surrounded by commercial acumen.
Let’s not forget that as the Canterbury software sector grows, it generates a busy ecosystem of tech-industry focused recruitment, sales, marketing, consulting, advisory, legal and investment firms - which all provide added capabilities to the sector. The membership list of the Canterbury Software Cluster spans across a wide range of disciplines, not just technology.
Challenges facing the sector
We currently face two main challenges: access to investment capital and access to skilled talent.
In New Zealand we have conservative investment tastes - but whereas in the past an investment in property or a finance company may have seemed less risky than a software business, now this isn’t necessarily the case. As a technology sector, we need to clearly demonstrate attractiveness as an asset class by continuing to deliver successful shareholder value. NZX-listed companies Xero and Diligent are great examples - we need more.
We also need to facilitate connections between investors and technology companies; there is an established venture capital industry in New Zealand, but the actual deal flow is tiny compared to other technology centres. We need to understand the vocabulary of international venture capital and present a polished face to investors worldwide.
It’s a similar situation with skills. There is increasing optimism around the future of the city of Christchurch: tech firms are working hard to fill vacancies, but the right skills are still scarce. We need to leverage the positive vision of rebuilding the world’s newest, safest and greenest city and attract talent from other parts of New Zealand, Australia and the rest of the world. Come to Christchurch, work hard, play hard.
An EPIC vision
In the next couple of months we will see the completion of Phase 1 of the newly-announced Innovation Precinct in the Christchurch CBD: 17 tenants, including my own firm Memia, move in to the EPIC Technology Campus building on Tuam Street in October.
EPIC is the result of many displaced firms getting together and initiating our own solution. Following months of intensive activity, EPIC has only been made possible with support from key organisations: NZTE, MSI, Christchurch City Council and BNZ, plus many other volunteers. In particular EPIC’s two principals - Colin Andersen and Wil McLellan - deserve singling out for their tireless work to pull the green light decision over the line.
EPIC provides a unique opportunity for Kiwi technology firms to congregate together and deliver stellar IT sector-led export growth for the New Zealand economy – driven by the colocation synergies that come from knowledge sharing, skills development and better business networks.
The tyranny of distance no longer applies to software in the age of mobility, cloud computing and SaaS: value in this industry is all about great ideas, sharp skills, fast pace, commercial nous and getting out there into your market to sell.
• Ben Reid is the chairman of the Canterbury Software Cluster. The Cluster is partnering with the University Commercialisation Offices of New Zealand (UCONZ) for the 2012 Canterbury Software Summit on Thursday October 4. This year's theme is ‘From Startup to Global’, details at www.canterburysoftwaresummit.eventbrite.co.nz