After laying off 35 staff at the start of the year, Peace is switching its focus to products rather than services.
The redundancies among development and services staff all were “either based in New Zealand or, if they were at a site overseas, came out of the New Zealand cost structure”, says former Peace chief executive Brian Peace (pictured).
The layoffs were of a total staff headcount of about 400 and Peace, speaking to Computerworld on a visit to New Zealand earlier this month, says the cut-backs were made in response to a number of factors, including the slowing US economy and utility industry in the past 18 months.
“There’s been a slowdown in IT capital spending and the high New Zealand dollar hasn’t helped, because it makes your cost structure in New Zealand compared to your US revenue base unbalanced.”
Another factor behind the redundancies was Peace’s shift from selling direct to doing so through partners such as IBM and Accenture.
“We don’t have exclusive deals with them, but our objective is to give them a solid product and strategy for them to win large accounts and deliver either implemented direct or outsourced.”
Peace, formerly Peace software, will focus on being a product company, not a services one, he says.
High on the company’s agenda is the launch of version 8 of its energy utility billing software product at the CIS (customer information systems) conference in Miami, Peace’s US base, in May.
Xcel Energy, a power and gas utility that operates in 12 US states, is also due to go live with version 8 soon and Brian Peace says work on the implementation of earlier versions following the original deal with Excel in 2001 (done in partnership with IBM) led to some of the changes incorporated in version 8.
“High-end scalability was one; they wanted to be certain that if they doubled in size they could still process the necessary number of bills.”
Version 8 will allow users to more easily identify marginally profitable customers and tailor marketing programmes seeking greater returns from them, Peace says.
Software development from half a world away is an exacting process, he says, with Xcel’s billing software “built in New Zealand, unit and system tested here, packaged, tech stack tested, shipped to IBM in Denver, unwrapped and tested by them and then handed over to Xcel, which tests it in a customer environment and certifies it before IBM puts it into production”.
J2EE is Peace’s development platform of choice and the company uses tools from Rational Software and BEA WebLogix on an Oracle back end.
“We’ll be producing 120 million bills a year once Xcel goes live and we don’t believe that can run on Microsoft yet.
“Oracle and Unix are the only realistic options.”
Peace was a supplier to Enron, but didn’t lose any money from the energy trader’s collapse, Peace says.
“We had a relatively small implementation there, for its commercial and industrial customers in Texas.
“They were good payers and the real impact on Peace was that because it was the poster child of the utility industry, its collapse influenced a lot of utilities to pull back and go back to basics and delay spending on billing systems.”
Peace is well establised in North America and looking to expand into Europe and Asia but, ironically, it is little used in its home country, with just one customer, the Palmerston North City Council.
Peace sees potential here following consolidations in the energy sector over the past few years, such as the acquisition of UnitedNetworks by Vector.
While in New Zealand, he was also touting a Meta Group study which showed Peace moving up the ranks of CIS vendors, according to Meta’s criteria.