- Now 101 companies
- Commerce Commission lets out a growl
- Give me some lip chap...
- Now 101 companies
It's all ended in tears of course. One of the country's high flying IT companies, Marshal Software, was sold to US-giant NetIQ in 2002. At the time it was heralded as one of those companies the government would love to see more of and, given the "100 companies worth $100 million each" agenda that we're on there was some wailing and gnashing of teeth over whether a Marshal Software subsidiary of NetIQ would count.
NetIQ announced this week that it would be closing the New Zealand office, firing the staff and moving all future development work on all the Marshal Software products to its development office in Houston.
So I guess that's that then.
Actually, not quite. Marshal Software didn't invent MailMarshal and all the other great bits of kit that NetIQ wanted. Well it did, but not under the Marshal Software banner. Marshal, you see, is a spin-off from Designer Technology Limited and the guys that came up with the Marshal software products are still there, beavering away, working on the Next Big Thing.
Better still, now DTL has three things in its favour: it has developers who are experienced at building a product suite that's worth a fortune; it has experience marketing and selling off those products on the world market and it has the cash from that Marshal Software sale, $US23 million give or take a holiday home/yacht/car, to bolster its coffers.
DTL is looking for the next big product and while it has its own staff beavering away, it's also talking to other companies about either buying their intellectual property or helping them develop it for the world stage.
That's a good thing. Actually, that's a great thing - we've got the cash and the talent and the experience and they're all still here. While it would have been nice to keep Marshal Software intact and making money from a New Zealand home base, it's probably more realistic for a US company to take it to the next level. That's what happened with Binary Research and Ghost, it's what's had to happen with Navman which was bought by US giant Brunswick; both of which have so far kept their development work here in New Zealand.
So it's good luck to all concerned, and if you've got a great piece of kit that you want to sell to the world, have a chat with DTL and see what you can do.
- Commerce Commission lets out a growl
Two actually, although one's far louder than the other.
First things first. Now that it's not spending every waking hour going over unbundling the commission has found time and resources to look into the complaint brought by the Telecommunications Users Association (TUANZ) about the price of cellphone calls in New Zealand.
It's not investigating the complaint, as such. The commission takes a longer view of such things - currently it's working out the criteria for a pre-investigation to see whether or not there needs to be an investigation. Phew!
The trouble is that this is all about the price the telcos charge each other to terminate calls. Telecom charges Vodafone, Vodafone charges Telecom and the two are quite happy with the pricing as it is thank you very much.
Pity the poor old cellphone user, though, who is paying one of the highest rates in the OECD according to TUANZ chair Graeme Osborne. Osborne says "the fact that toll charges have fallen dramatically in recent years but mobile calls have not seems to us to be evidence that the impact of competition on the two markets has been very unequal", and he would seem to have a point.
But in news just to hand, the commission is taking Telecom to court for its allegedly "misus[ing] its market power" by setting retail prices "lower than wholesale prices for a particular product".
Telecom is supposed to be offering a "retail high-speed data transmission service" to businesses called Streamline which was introduced in 1998. In 1999 Telecom introduced a new wholesale pricing structure that meant its customers, other telcos, could either resell Telecom's retail product or, for a bit of variety, sell their own products but buy "access to dedicated data tails" on Telecom's network in those places where their networks don't reach.
So far so good. The problem is, the commission alleges, Telecom is charging too much for this second option. It's charging more than it does for an end-to-end re-sale solution, more than it charges for the retail version and more than it charges itself for similar services.
If that sounds familiar, it's because Telstra in Australia faces the same issue over a different product - DSL. Telstra happily sells its DSL product at a retail price that's less than it charges its competitors for the wholesale version of the same product. Which would imply that the wholesale price is wrong and the Australian version of the Commerce Commission would very much like to see that rectified. Telstra is mulling its options at the moment but faces a $A10 million fine plus $A1 million a day it doesn't adjust its pricing.
Telecom's really in the gun over this. Part of the commission's recommendation on unbundling covers this area of data tails and it recommended not unbundling this part of the service so long as Telecom does the right thing in the wholesale world. This decision to take Telecom to court would suggest the commission believes Telecom is not doing the right thing in its wholesale pricing and is abusing its market position to boot.
Telecom, of course, denies it's doing anything wrong and claims the commission's move is "unnecessary" and "a throwback to the old telecommunications regime", which is funny because we've never had a telecommunications regime before. It's been Telecom doing what it wants unfettered for the past decade.
General counsel Mark Verbiest says: “This is an historic issue and frankly we’re surprised it has reared its head now. The fact of the matter is that we have no outstanding disputes in relation to our data pricing with other carriers."
Telecom will be defending itself vigorously in court.
- Give me some lip chap ...
And put it on my bill!
Sorry, I couldn't resist. It's my favourite joke of all time (no, seriously).
Billing. It's a tricky business. Someone wants to buy a product off you and you want to sell it so you arrange to switch your product for their money. It's what makes the world go round, apparently.
Unfortunately it's not always that easy. Sometimes billing systems just get in the way of the selling of the product. It's about then that you should chuck the beastie out and get a nice new one that will cope with tricky things like customers wanting to buy products.
Putting aside, for the moment, all sarcasm about any given company being caught by surprise when customers do decide to buy its products ("They want to do what? Well get them to call back later when I'm at lunch"), some billing systems are not as flexible as today's market would like them to be.
Consequently we have the problem of Telecom customers wanting to give the company money but having to wait up to a month for the service they've bought. Meanwhile, across town, Woosh is allowing customers to go to its website and chose what changes they'd like made to their account and actioning it immediately.
Clearly something's got to give, but the problem is the cost of these things. Telecom's looking at spending tens of millions on a real-time billing solution that will allow customers to rejig their accounts, increase their speed and so on and really, there's very little driving the need for such a change. Unless you're a Telecom customer of course.
In the meantime if you're a Telecom customer (and let's face it, who isn't?) and you want to change your JetStream product, you're going to face a delay of up to 30 days depending on when your billing cycle turns over. That's assuming all goes well, of course, and there's no issue between you, your ISP and your ISP's relationship with Telecom.
The one thing I do find unpleasant about it all is the constant harping on at customers to change all their telecommunications needs over to Telecom. I've had it happen to me on more than one occasion and while I've come to realise that marketing is the way of the world these days, this lot seem to be very gung-ho. If they're not insinuating you should be with Xtra they're mocking your cellphone number or demanding you change your toll provider to Telecom to get the service. It's quite off-putting.