Kiwi software skills 'shallow'

19:31, Jul 10 2011

New Zealand is technically behind and software under development here is "shallow", according to Martin McKendry, one of the most accomplished computer engineers the country has produced.

Dr McKendry grew up in the Wairarapa but has lived in Silicon Valley for more than 20 years, where he headed Avaya's 700strong application communications group. He was also senior vice-president of engineering at customer relationship management powerhouse Siebel.

He cut New Zealand's software industry down to size after meeting star performers, government officials and "anonymous engineers doing boring work", at the suggestion of the chief executive of Auckland's Icehouse incubator, Andy Hamilton.

The hi-tech sector was on Friday basking in the glow of compliments from United States angel investor and PayPal founder Peter Thiel, at a conference organised by the Icehouse.

But Dr McKendry said most of the technology he saw under development here involved people dealing with "well-understood or easily understood problems" by building on top of databases. That was "mostly without a global perspective" using teams that were "tiny and lack the ability to scale".

"You cannot make money by finding some problem that is easily understood, building a solution, then taking it to a global market. Yet that is exactly what I see a lot of start-up hopefuls doing in New Zealand," Dr McKendry said.

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Mr Hamilton said Dr McKendry's comments were "quite confronting" but hit on a theme. "We have to be grown up enough to take them on board."

Former Fonterra chief information officer and senior industry figure Marcel van den Assum said Dr McKendry's perspective was a valid one.

Dr McKendry acknowledged he was making sweeping generalisations. But to make a significant global contribution, firms needed to build "deeper technology" and attract managers from overseas with specialised expertise, a process that would take at least five to 10 years.

"The raw talent is here. New Zealand produces software engineering graduates in numbers that are probably adequate to get started. They are just working on the wrong stuff or, even worse, leaving New Zealand."

Flying in more "experts" or establishing beachheads overseas was not the answer, he said. "Visits from US venture capitalists and angels are helpful in gaining perspective, but don't put action at the root of the problem."

They also tended to blow a lot of smoke, he said. "US investors will always say they see potential. They never say your idea is stupid or your team is weak. I suspect Kiwi entrepreneurs are naive in interpreting what they hear."

Dr McKendry advocated establishing New Zealand as a "virtual suburb" of Silicon Valley.

He said an entity should be set up to provide locally-based engineers to US startups, but it was possible there was no opportunity and New Zealand was in a "declining spiral that cannot be broken".

BusinessDay.co.nz