High-growth IT companies in Deloitte list not a sign of recovery

'NZ has always been good at technology', says survey organiser

Nothing should be assumed about a looked-for ICT recovery from the noticeable presence of computer-related companies in Deloitte’s Fast 50 table of high-growth companies, says Brett Chambers, the Deloitte partner co-ordinating the research.

In the four years the Fast 50 (co-sponsored by Unlimited magazine) has been running, ICT companies have always been a notable feature of the list, he says. The only drop in their number was experienced two years ago, in the depths of the post dot-com slump.

“In most years, we expect about a third of the list to be computer-related companies. New Zealand is good at technology.”

ICT companies are inherently scalable, he suggests, being able to generate extra revenue with less investment in extra staff and infrastructure. “Once you’ve developed your software and put it on a CD, it doesn’t cost that much to make and sell twice as many of them, compared to the investment a manufacturing company would have to make for that kind of growth.”

Topping the list is online auction-house TradeMe, bettering its position from second in last year’s table. Other high-rankers are network monitoring equipment maker Endace, embedded electronics company Prolificx and, for the third year in a row, payment-systems supplier PayGlobal.

Some of the high growth-rates are coming from a small base but part of the aim of the survey is to recognise successful startups, Chambers says. The Fast 50 does not deal in tiddlers, however — a company must be making at least $100,000 in revenue a year to qualify for consideration.

In the case of long-stayers like PayGlobal, the growth rate moderates, he says; that company managed 116% growth on last year, for 44th position. “But that’s still a fantastic achievement, bearing in mind that a company’s high growth in one year sets the baseline for the next.

“One of the strongest messages coming through this year is that many companies may be constrained from achieving their growth goals in the future because of a lack of skilled people. Demand for good people remains strong and this is creating salary and wage pressures across many sectors,” Chambers says.

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