Australian ISVs: The little guys taking on the world

Special report: how and why they do it

This is a story about Davids and Goliaths. The Davids are Australian ISVs who have big ambitions and the nerve and ability to take on the Goliaths – the big name IT companies around the world. ARN finds out why and how.

Historically, Australia can make the proud claim that it produces some very talented independent software (vendors) ISVs. Often niche players, Australian software can be found everywhere from retail systems right through to Wall Street.

So, why does it happen? What attracts software developers to the country (or to remain within the country) when the likes of Silicon Valley and Palo Alto and companies Facebook, Google and Microsoft await?

Part of that answer is simple: it’s the environment, according to Distra CEO, Mike Aston.

“Australia is a good place to live and a good place to develop software, and there’s a good, innovative crowd of people here. We’re in a fairly complex area of software and that seems to be something that works well here as well,” he said.

Distra is a perfect example of one of those Aussie ISVs that operates in the background. Its software powers card payment processing, in a secure and reliable manner. In developing the software, it helped that Australia was already an adopter of both credit and debit electronic payments, making Distra’s solution topical.

But it’s mostly the environment. “Sometimes you need to attract people in a worldwide class, and the fact we have a nice environment means we do have some very good people in certain fields which helps.”

How do ISVs become successful?

Critically, for an ISV to become successful on a global scale, it needs to find partnerships. As Australia is relatively isolated, taking the software to markets such as America and Europe is challenging logistically.

“You have to be cautious that when you think you have something spectacular you’re aware of the whole market and not just the visibility of what you have here,” Aston said.

Resourcing is also a problem. Field Service and Job Management ISV, Connect2Field might operate entirely within the cloud, but this doesn’t mean the software is automatically accessible throughout the world. Customers still require support, and an ISV faces a challenge in making sure that it has staff available in different nations and time codes to respond to queries quickly.

“For the most part, we’ve got the same challenges any sort of business has, which is everything from managing staff and cash flow through to raising funds,” Connect2Field CEO, Steve Orenstein, said.

“But, in terms of running a worldwide operation the next biggest thing is the timezone in different countries – being able to manage that and work out in the first place how to operate everywhere in a five working days environment.

“It’s working smarter and thinking outside the square. You want to make sure the people you find are on board and not just treated as an outsourced unit. That generally doesn’t work.”

Security specialists, NetBox Blue chairman, John Fison, is upfront about mission possible: it is a challenging environment that ISVs operate in in Australia, facing limited resources for promotion and support, but in that is opportunity for creative thought and differentiation.

“We’ve got 30+ people but covering just Australia is pretty challenging,” he said. “Australia is a huge country with a widely diverse group of customers.

“The flip side to that is, if you can succeed in Australia it gives you a pretty good leg up to be able to succeed in territories that are more densely populated and easier to operate within.”

And that’s where the vendor partnerships are. NetBox Blue is a close partner to IBM. When it was ‘just a 10 person company,’ it struggled to have enough people in development for the technology itself, let alone the channel management, promotion and relationship management.

IBM provided that scalability, allowing NetBox Blue to go as far as Argentina, Central America, India and Japan. IBM provides its ISVs with support across a number of categories, including training and skills, but for Fison, it’s the brand value of such a big vendor that was key.

Customers are more likely to buy into a technology that is preconfigured on an IBM system and associate the brand with quality as a result. “It really helps us locally in promoting our technology, giving it credibility, making a local distributor feel comfortable with the fact there’s a big global company that’s pushing us to make it a success,” he said.

For IBM itself, it sees its Australian ISV partners most successful when they’re developing niche solutions. The minute you try and build a ‘all-in-one’ type of solution is the moment you start to come up against vendors like Microsoft, and that’s a losing battle.

“I think the smaller players can succeed because their solutions tend to be more focused and more specialised,” IBM growth market unit executive STG new routes, Michael Graf, said.

“The larger solutions can be more difficult. Some of the smaller players have a good regional or industry solution – we have some banking partners and some good key players and they’re doing really well with the second tier banks in Australia.

“We have some healthcare partners that are not the largest in the world, but are really key to driving some great solutions in the local healthcare marketplace, and are now being looked at by IBM for the US healthcare space for example.”

It’s all about the apps

The modern software market is going through a vibrant transition to a world of clouds and applications. It’s well-known the kinds of opportunities that the Apple App store offers small developers, and Australian ISVs have been very good at taking advantage of that (see sidebar).

Microsoft’s Azure cloud platform offers many similar opportunities to ISVs. Software can be made available around the world in a far more accessible manner than previously. Connect2Field is a Microsoft partner in the space.

Microsoft technical specialist, Software-as-a-Service, Phil Meyer, calls the current environment a ‘perfect storm’ for developers. Bandwidth is cheaper and more readily available, assisting in the uptake of digitally downloadable content. Computing technology is improving, and software technologies to support multitenancy are becoming more prevalent.

This is coming together to make subscription models an attractive proposition. “Australians seem to be seizing it faster than anywhere else in the world,” Meyer said.

And, indeed, it is the ISVs that form a core part of the marketing message Microsoft is taking around cloud. Microsoft product manager, Windows Azure, Tim Buntel, said that each and every public communications platform that the vendor has attended to represent Windows Azure, it has had a ISV partner on stage with it.

In fact, at last year’s Microsoft Global Partner Conference, Zap Technology won the Microsoft Partner of the year award, demonstrating the success the vendor has had with ISVs in the local market.

“Having a CTO on the stage with me or bringing someone from the technical side with me can really help back up what we’re saying,” Buntel said.

“Really good commercial successes are coming from the ISV space, so it makes a much more compelling story for me when I’m going out and talking to a broad range of different customers to bring along some of those partners as ISV partners who can speak to the benefits the platform gave to them.”

I think the cloud is a great opportunity for Australian software developers. Because it allows the developers to not be concerned with the distribution network.”

From the consumer, $0.99 iPhone games right up to the software that runs enterprises, Australia has plenty of opportunities for small ISVs to make a real, global mark. The key is to find good vendor partners to leverage the IP with in the market. 