Australian start-ups are great at developing new technology, but are rarely good at selling it. Australian channels are fantastic at selling tech- nology, seemingly regardless of where it comes from. Why then do Australian channels rarely sell local technology?
Distributors in Australia carry next to no local products, with the possible exception of the accounting software maker, MYOB, and some modem manufacturers. Some distributors carry no Australian Stock Keeping Units (SKUs) at all. It might follow then that there simply are no local products available, but anecdotal evidence points to more than 500 indigenous technology developers in Australia with saleable product.
So why the disconnect? Firstly, many channel organisations in Australia have grown up on foreign products. Most US, Asian and European product that comes in to Australia is backed by well-funded marketing campaigns, with training materials and accreditation programs in place.
The first factor generates demand, the second makes products easier to sell.
But very little Australian technology is designed to be sold through a channel. Also, Australian developers are chronically short of cash, and ill-equipped for marketing their products. Few could put together a credible channel program without assistance. Their products are also rarely recognised as best of breed against international competitors.
Director of strategic alliances at technology developer, Quipoz, and former managing director at Business Objects and Lotus Development, Peter Taylor, said distributors or channel partners would not invest money and time in something that hadn’t established a market presence.
Taylor said: “There are so many things out there, and they [channels] are going to go with what is easiest to sell. So the small Australian product companies have got to somehow get some awareness into the marketplace, or be able to absolutely knock the socks off a channel partner.”
Many people who start their own technology businesses are technologists, and have not worked in areas involving channels and marketing.
Hence they are not aware the channel option exists. Those that are aware often have a poor understanding of the elements of the value chain through to an end-user, and of the cost structures in getting a product to market. Further, many Australian technology companies are focused from the very beginning on the greater potential of offshore markets. If it takes the same or slightly greater effort to sign a channel partner in the US, then it holds that the rewards from a US partner will be significantly greater. For instance, the Perth-based Internet monitoring software maker, WebSpy, derives 80 per cent of its revenue overseas, and will devote more resources to developing those channels than local ones.
What is certain though is that Australian channels are the best advocate around for local technology — if only they could get their hands on it.
Whether this issue can ever be resolved is difficult to fathom, but until more Australian technology starts flowing in to local channels, Australian technologists will continue to bemoan the lack of opportunities in their home market.