When the government’s grand plan for the ICT sector comes to fruition, the sector will be producing $10 billion of goods and services a year. The domestic market will absorb only a portion of that, implying that much more exporting will be taking place. The largest proportion of that will be software.
Already, according to Trade and Enterprise New Zealand, we’re shipping about $400 million of software to overseas customers a year. That’s through the efforts of hundreds of software companies, many of them tiny, and some of them – Peace Software in Auckland and Jade in Christchurch, for example – employers of hundreds of developers.
Their sales have risen 66% in the past four years, according to the government agency; to reach the government’s target of 100 $100 million ICT companies by 2012, overseas sales have a long way to go yet.
Vive la difference
Does developing for an overseas audience demand a different approach from that for the domestic market?
Data Group head and former New Zealand Software Association president Rollo Gillespie believes such a question is “dumb”.
“To develop for the New Zealand market alone has not been commercially viable for many years now due to our puny market size and the increasing costs of development,” Gillespie says.
The only exception might be “bespoke” or customised software development, he says.
New Zealand Trade and Enterprise is actively helping local developers tackle the export trade, through schemes like the Beachhead initiative (see Beachhead story). It also offers advice, uging potential exporters to consider a raft of “fundamentals”. For example, horizontal applications are much harder to sell than solutions for tightly defined vertical markets.
“It might be harder to sell the world’s best mid-range CRM solution than it would an application which enables companies to conform with a new government regulation in an obscure vertical,” says spokesman Mike Booker. “It’s no good developing on the right platform if you’re putting together the wrong solution.”
Other fundamentals: whom does the application you are developing offer a compelling reason to buy? How meaningful is your competitive advantage to your target market? How sustainable is this competitive advantage?
Whether for international or domestic buyers, the theme from speaking to a range of developers seems to be that modern software needs to be open, flexible, readily customised and scalable. It might be likened to buying a car, with the customer determining the final colour of the paint and upholstery, not to mention the engine size and model style.
”Everyone doing development these days is working with an internationally accepted development platform that supports multi-lingual, multi-currency and multi-everything else, and views the entire world as a possible marketplace,” says Gillespie.
Indeed, even the smallest of producers spoken to be NZ Developer were typically exporting, and facing these multi-language and multi-currency issues.
Bay of Plenty-based SubRosaSoft.com is aiming at “the entire world” with its Mac-based security software; Christchurch-based ProWorkflow.com says it “thought globally from day one”.
Even at bespoke software company Accent Computer Services, whose local government software is just used in New Zealand, international influences are felt; the fact that it is serving a domestic market makes no difference.
The Christchurch firm’s code is Oracle-based to run on Microsoft Windows 2000 or Unix.
“The system has to be robust, have good skill sets in New Zealand and be transportable,” says director Stephen Kilpatrick, who also heads web-based offshoot Election.com.
“All our sites use Microsoft but can use Linux or Unix. If we exported, we would do the same. Look at the platforms used, what people are happy with. Because we have chosen transportable databases, we can change to another system.”
Java, J2EE, Enterprise JavaBeans and SQL databases underlie Peace’s utility billing software, says technology head Paul Grey, to enable the company to meet its clients’ many different preferences; “open” is the operative word.
“J2EE is a natural evolution in the applications space. It is very flexible and Java can be deployed on many different platforms,” says the Miami-based Kiwi.
Small Christchurch company ProWorkflow.com developed its web-based project management software in just two months using Cold Fusion. Founder Julian Stone believes Microsoft’s .Net would have taken two to three times longer, though he eventually plans a .Net version of the software. Cold Fusion, Stone claims, is also easier for customers “to edit and play with” and the code is “more compatible” with Dreamweaver and other software used by the creative community, ProWorkflow’s target market.
Auckland-based Greentree didn’t shy away from using the locally developed Jade environment for its business application software. It would have used Borland’s Delphi until limitations were encountered that stopped it from adding “clever” features to the software, says executive director Peter Dickinson.
The company came across the Jade programming language, experimented with it, created some prototypes and found it easy, fast and capable. Its integrated object-oriented database and development environment mean “one bundle” does the work that might have taken half a dozen tools from other providers.
Dickinson says the company wanted a product that was “platform-independent”, capable of running on multiple systems.
“The Windows server environment dominates Australia but, again, Greentree was looking to build for the international market. Linux is getting a good hold in Europe. Greentree did not want to cut itself off from that market,” he says.
Another Jade strength, believes Greentree, is it allows changes to be readily implemented, unlike the Dataflex environment used by the firm’s predecessor CBA accounting software.
Though it wasn’t a factor at the time of choosing Jade, the Christchurch-developed system now offers multi-platform capability, including IBM’s AIX and Linux.
“The inherent object orientation of Jade enables us to do very sophisticated management of every Greentree site. Every (previous) upgrade was a drama; it meant costly recustomisation. Jade allows regular updates.
“We had to go for something flexible. Jade is part of the debate about object-oriented technology versus older relational databases. Object orientation gives us flexibility and flexibility is crucial to meeting global demands,” Dickinson says.
However, both PST Software and StayInFront use Microsoft’s .Net, praising its multilingual support and the security of Microsoft’s size and wide “toolkit”.
“Microsoft has vision,” says PST Software head of sales and marketing Tom Meijer. “By using Microsoft we are seen as a big company. The risk is with Microsoft, not us.
“If you are selling Jade, you have to do more in terms of education and risk mitigation in your presentation,” he says.
StayInFront boss Tony Bullen sees platform choice in the same light.
“When you go offshore, the development has to be recognised and not questioned by the local market. The strength of Microsoft or .Net is that it won’t raise eyebrows or questions,” says Bullen.
While Jade may point to export sales in the US, Australia and Britain, for example, its can’t match the name recognition of Microsoft.
“People do not want your source code if it is something they cannot buy locally. Microsoft Japan hasn’t supported the Microsoft FoxPro development tool. So it is hard to market something in FoxPro to the Japanese,” Bullen says.
“New Zealand solutions are typically low-cost and highly flexible and highly featured. But sometimes they’re not good at being scaled. An overseas buyer might want an application for 1000 users not 20. The average New Zealand developer needs to think about that. You have to scale to perform,” he says.
Whatever language, platform, or environment chosen, the software companies typically have a product with similar characteristics.
“We keep interfaces simple, not overburdened with functions. We think less is more,” says Meijer.
ProWorkflow’s Stone says likewise.
“We keep the product small in terms of functionality. We can sell modified functionality as plug-ins. Strip down to and then slap on extras to customise as we want. People want flexibility,” Stone says.
Greentree’s Dickinson says “system wrapping”- how the product looks and feels” -- will change from country to country.
“Many of our offerings have sophisticated toolkits for customisation. The customer can make final changes themselves or get a supplier or project implementation team to do it,” he says.
Mind you language
Taking account of language difference is standard when developing for export. American buyers expect to read American spellings, and capability in non-English languages is also expected in that market.
In addition to American English, Peace has French and Spanish versions of its billing software but, as yet, no Asian versions.
The US market also expects American meanings of words, says Geoff McIntosh, president of Binary Research International, who several years ago took New Zealand-developed Ghost software to Wisconsin and sold it to Symantec.
Double-byte character compatibility is required to support languages like Chinese, Japanese, Hebrew and Arabic, McIntosh says. Keyboard layouts also differ.
Another issue is currency variations, though SubRosaSoft just trades in US dollars. And a host of local regulations – taxes, drug prescribing rules, for example – also need to be taken account of.
Peace had to consider that even within countries like the US, the market varied depending on the extent of energy deregulation in particular states.
If there was little deregulation, says Grey, the market focus was on cost efficiency, but if there was much deregulation in a particular state, customers sought greater functionality.
Local peculiarities can get highly specific. Portability is a big issue in Asia, says StayInFront’s Bullen, with many people using handheld devices on trains instead of fully featured laptops.
And in the field of customer relations, remembering an anniversary is more important in Korea than remembering a birthday.
Europeans are less keen on bells and whistles than Americans and have more stringent privacy rules, which may affect the kind of personal data you can extract from them when selling them downloadable software, says McIntosh.