'Made in NZ' fails to cut it in US software market

A 'made in New Zealand' label on software has about as much credibility as 'made in Zimbabwe' on a refrigerator.

A "made in New Zealand" label on software has about as much credibility as "made in Zimbabwe" on a refrigerator says recently returned expatriate and ex-Geac product evaluation man John Blackham.

In his report "New Zealand goes Software: an opportunity", delivered to the Software Exporters Association last month, Blackham says New Zealand's self-created image as a land of lakes and mountains has to be altered for it to be perceived as a credible source of technology. He says that New Zealand is the butt of humour in the US market. It is a metaphor for remoteness and is portrayed as an industry backwater--a place in which to "goof off".

"There are two ways of judging that," Blackham says," and one is by judging New Zealand's image in the US in general terms and also its image within the industry. On the whole New Zealand is a 'far away distant place'. It's not the place where software is coming from in people's minds.

"Sure, there are one or two people who are quite excited about getting software from some strange, exotic place. But if you get some software from Tahiti, you think 'oh, yeah that's really good', but you're not going to be serious about it."

Blackham, who formed Fact in 1978 and joined Canadian-based Geac when it bought Fact in 1990, says his report was well received at the Software Exporters Association.

"It went down well. It's a subject which is a bit painful for me because there is so much desire among a lot of people to get into that huge market and they're at the bottom of a long ladder; to get to the top is a really painful exercise."

Blackham is in New Zealand with a start-up venture called XSOL, developing a "universal business system".

"It's a start-up venture. I've got to move back to North America to get it off the ground. I could try to do it from here but it's like trying to run a race with one leg tied behind your back."

Blackham says there is no capital here for such start-up ventures.

"You go to a bank and say 'I have a successful software business, how much money are you going to lend me?' and they'll say 'zero'. You say 'I turn over $10 million a year' and they'll say 'sorry, zero', In the States you'd have a queue of buyers looking for business and you could prove it was worth $20 million of $30 million."

Blackham is calling on government to make a strategic commitment to the industry and is critical of the 1993 Tradenz initiative "Stretching for Growth", which covered 24 sectors, most of which were agribusiness- and tourism-related. Anyone looking at the odd collection of industries in the remaining nine sectors would, according to Blackham, "have to wonder at New Zealand's strategic direction."

Blackham says the follow-up document to that initiative shows that there is still no strategic plan for the industry.

"Only the industry can do it but you need a receptive government regime," he says. "The government has to be in an assisting role, but right now there is no profile in the New Zealand government for the industry whatsoever."

Blackham calls for a revision of New Zealand bankruptcy laws to encourage the growth of venture capital companies and investments from offshore in local developments and proposes a business plan for "NZ Software Inc", which he says should be seen as a start-up venture that will focus on potential customers and specific technologies.

Blackham says there is little sense of excitement in the local industry, in contrast to the US.

"When you look at the States and Europe, they churn out young kids who want to conquer the world. They know they are going to write the greatest software ever. It's a new, young and exciting industry. In the States there's a buzz--you are creating a new world. And that's the thing that's missing--there's no excitement."

Blackham's report cites overseas success stories, such as SAP, and successful strategies employed by countries like France, Holland and Israel. He says four aspects of the strategy have to be addressed: internal marketing, to promote the industry and opportunities to key groups internally; industry development, to encourage start-ups and venture capital; infrastructure development, aimed at sectors on which a software industry is dependent; and external marketing.

Blackham says that while some aspects of the plan may seem ambitious and "smack of government intrusion", they are no more than any venture would undertake in marketing and market development.

Blackham does think New Zealand is better placed to take advantage of the Asian market.

"The good thing about New Zealand is it's small and non-threatening," he says. "You could very easily set yourself up like Singapore--a small non-threatening, but a very active centre of products and knowledge to feed into that market."

Join the newsletter!

Error: Please check your email address.
Show Comments

Market Place

[]