Kiwi tech firms make export headway

ROB O'NEILL
Last updated 05:00 17/02/2013
Maloney
Shaun Maloney, chief executive of geological modelling software firm ARANZ Geo.

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A trio of Kiwi technology firms are cutting through in export markets in very different sectors.

Christchurch-based ARANZ Geo will soon launch its Leapfrog Geo 3D geological modelling software for the mining, hydrogeology and geothermal industries after previewing it at the Mining Indaba Africa trade show last week.

Ninety-eight per cent of ARANZ Geo's sales are offshore and the company, which has been doubling sales year-on-year, is expected to go close to $15 million in turnover by the end of 2013.

Meanwhile, Auckland-based ActionStep is cutting through in the US after setting up shop in Silicon Valley at the beginning of 2012.

Ted Jordan, ActionStep's CEO, said ActionStep's web-based accounting document assembly and workflow, delivered on subscription model, can boost lawyer productivity by 20 per cent or higher without increasing costs.

Another Auckland tech company, Mako Networks, last week inked a new partnership with IP Solutions International to boost payment card security in the Australian market.

IP Solutions will sell Mako's payment card security technologies as "merchantsecure", bundled and tailored for distributed companies such as franchisors and retail chains. Among other development in 2012, Mako appointed four Asian distributors in Malaysia, Singapore and Philippines, one in the UK, appointed a US business development manager and been accredited in several international markets.

ARANZ Geo developed Leapfrog out of the ARANZ medical and scanning businesses. In 2003, the Leapfrog software made its mark in the early exploration and or very complex geology areas, ARANZ Geo chief executive Shaun Maloney said.

Such 3D modelling was a big shift for a very traditional and change-resistant mining industry which couldn't equate the speed and processing power of the software with also being highly accurate.

"So, for many years it was considered a niche high-performance software for specific time-sensitive exploration projects around the world," Maloney said.

Happy in this space, ARANZ Geo continued to grow both market share and acceptance of the technology within major mining and exploration companies. In addition, the company developed a geothermal system in consultation with GNS science and a hydro solution. Both are also finding their niche internationally.

But since September 2010, three thing changed for ARANZ Geo.

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Firstly, it developed and implemented a three-year growth plan that would deepen market penetration through forming corporate supply agreements targeting the 10 top global companies and to broaden the software's capabilities.

"Two years in, we are on target with 300 per cent growth in user base and revenues, plus global corporate supply agreements with nine out of the 10 biggest names in the mining sector," Maloney said.

Then came the Christchurch earthquakes, which have had a "profound and positive" effect on the company. Productivity increased, the Kiwi "can-do" attitude and thinking outside the square kicked in, with staff crammed into two or three offices, suitable for a third of their numbers.

Also the software is now being used by GNS Science to model the subsurface of Canterbury.

Thirdly, the mining industry is boom and bust. While the market is booming, there is no real need to change processes and practises.

When a bust or market correction arrives, the focus goes on efficiency, effectiveness and reducing risk.

"As as it happens, that's the value proposition for our Leapfrog software suite," Maloney said.

Now well outside the start-up phase, the company remains organically funded out of sales.

"Our focus is on profit before revenue, strength and sustainability of our product and business model. This makes sure we keep our heads, don't over-extend ourselves beyond our capabilities and remain cash-flow positive and profitable," Maloney said.

Along the way, of course, there were challenges, not least of which was transforming from a software development shop into a full service provider to a global customer base in just 12 months. That required building teams in areas such as sales, marketing, e-commerce, financial control, legal and compliance and seen the number of staff triple in two years, 80 per cent from outside Canterbury.

But Maloney is also keen to acknowledge the assistance he has received along the way.

"We cannot stress enough how important and key timely assistance in both development funding and guidance has been," he said.

"We are extremely grateful for the ongoing support of all government agencies, in particular New Zealand Trade and Enterprise and the Ministry of Science and Innovation who understand the benefits that come for supporting high performance companies to get their global foothold and revenue back onto NZ shores."

Such assistance is increasingly criticised as tech businesses such as Endace and eBus that have been funded by taxpayers are sold offshore. However, Maloney said there is plenty of growth ahead and an aggressive business plan

taking ARANZ Geo to the year 2020.

"We see ourselves more of a potential acquirer of others, rather than the acquired," he said.

For Mako Networks, a global crackdown on payment card fraud is a growth opportunity. Mako's cloud-based technology helps merchants that process, transmit or store cardholder data to comply with the stringent international Payment Card Industry Data Security Standards (PCI DSS), required by card providers.

Australian merchants have been particularly hard-hit in the past six months as Australian Federal Police arrested 16 gang members accused of stealing credit card data from more than 100 small- and medium-sized businesses and cashing out at least A$30 million.

Authorities said the syndicate had access to at least 500,000 card numbers, the largest card data theft in Australian history.

In September police broke up another card fraud ring in suburban Sydney, seizing more than 15,000 fake credit cards with a potential value of A$37.5m and arresting eight suspects.

"Card fraud at retailers and restaurant chains has been a growing concern in Australia," said Michael Donoghue, director of corporate payment solutions for Mako's new partner IP Solutions.

Finally, legal practice management software maker ActionStep is poised for US growth in the United States after deploying its software as a service system on Amazon's cloud platform, Amazon Web Services.

ActionStep is targeting the nearly one million US lawyers and 45,000 law firms, with its cloud-based ActionStep legal practice management software and now has a presence in Silicon Valley.

Jordan said the response from law firms has been "tremendous" since entering the US market at the start of 2012. ActionStep, he said, can boost lawyer productivity by 20 per cent with integrated accounting document assembly, and workflow, delivered via the cloud and a subscription model like that of New Zealand accounting software firm Xero.

"About 40,000 to 50,000 new lawyers graduate each year and are struggling to get up and running due to the competition" said Jordan. "ActionStep will provide them with an instant practice management system on the cloud and important ways to differentiate themselves from their competitors."

- Sunday Star Times

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