N4L supplies broadband and security for close to 2542 New Zealand schools – which it says represent some 25% of New Zealand's daytime internet use.
Some 2542 schools - that is, nearly all of them - are about to get new internet and security providers. Analysts offer intriguing new details around Genesis’ move to buy into ChargeNet - and are devices on the outcome. In Wellington, the Silver Surfer returns.
2degrees has won a big education contract, previously held by Spark.
Network For Learning (N4L), the Crown company that provides tech services for students and teachers, recently under fire over inappropriate content, has just signed contracts running through to 2031 with 2degrees and Palo Alto Networks – who displace incumbents Spark and Fortinet – as it prepares to embark on a major upgrade of the services it provides to 95% of the country’s schools.
“These strategic partnerships will provide the next generation of our managed network, enabling N4L to better support schools’ evolving digital needs,” the firm said.
2degrees and Palo Alto Network responded to an RFP individually and were subsequently awarded separate contracts, the Herald understands.
N4L wouldn’t reveal the value of the contracts, but the scale is vast.
The Crown company provides managed services, including internet, Wi-Fi, and cyber security for some 2542 state and state-integrated schools.
Its services, which are fully-funded (that is, free for schools) are used by some 900,000 pupils and teachers – who cumulatively account for 25% of New Zealand’s daytime business internet traffic, according to N4L.
“It’s a huge deal for us,” a 2degrees insider told the Herald.
N4L saw its annual budget bumped from $45 million in 2022 to $50m last year (including $33.7m from the Ministry of Education for services) according to its annual report.
Budget 2024 – which was notable for cuts to various tech programmes, including all tech-related professional learning development for teachers and support for the local cloud software industry – saw new funding for “equipment replacement and cyber security in schools” with a $22.5m allocation in the 2025 financial year, $24.4m in 2026, $25.1m in 2027 and $21.68m in 2028.
“N4L also requires additional funding to meet the cost pressures for ICT [information and communication technology] network equipment replacement and support. This initiative addresses previously time-limited funding for these services. Ongoing funding has been provided for this previously time-limited initiative,” Finance Minister Nicola Willis’s Budget summary said.
All up, there was $94m in new operating expenditure and $63m in new capital expenditure for digital services in schools, mostly delivered through N4L contracts to the Ministry of Education – although some of the funds will also go to software licensing and Netsafe; the Government has not provided a breakdown.
With the new contracts, N4L is taking a new approach. It will be the third major iteration of N4L’s managed services. The Crown company was formed in 2012 to help schools get connected to the Ultrafast Broadband (UFB) fibre rollout, and manage their internet connections.
In 2019, its current Fortinet-based managed services were put in place and a managed Wi-Fi network was introduced – which N4L chief digital officer Gavin Costello says is probably the largest in Australasia.
“For the first time, N4L will take full ownership and management of the managed network, resulting in enhanced cost efficiency, service flexibility, and a greater ability to manage provisioning and service delivery to support schools promptly and effectively,” Costello said.
“N4L will build on this new platform by implementing upgrades aimed at continuous improvement in online security and safety.”
Schools won’t have to pay anything. The upgrade and changeover, from March next year, will be fully funded by the Ministry of Education.
In August, investigative reporter Michael Morrah revealed two online harm researchers had accessed pornography, sexualised animal content, and information about self-harm on school-issued iPads at six Auckland primary schools in an experiment they described as “horrific”.
Last week, N4L chief customer service officer Michelle Leadsom told the Herald that while the new system would be more capable, there were limits to any current content filtering technology.
N4L could block individual addresses (see its list of blocked websites and categories here) and screen email. Each day, N4L blocks an average of 57 million attempts to access websites identified by schools or the Censor as inappropriate, Leadsom said.
But its managed network - and alternative solutions - could not do anything about harmful content that suddenly pops up within a platform like Facebook, Instagram, Snapchat, TikTok or a messaging service like WhatsApp.
“No, it doesn’t go across social media. That’s not something we can currently do at the network level,” Leadsom said.
“We’re exploring kind of what new technologies are out there and how much further we can go, but nothing will ever be 100%. That’s also the practical reality of any technology.”
What N4L can do is block services like social media platforms altogether, or for certain groups of users at certain times of the day, Costello said.
Modes like Google Safe Search and YouTube Restricted Mode could also be enforced on N4L’s network.
It was up to each school to select which services it wanted to block, and when, or which restricted modes it wanted to put in place. Some 96% of schools had chosen some level of restriction, Costello said.
A competitive procurement process was initiated in September 2023, which included the appointment of an independent probity auditor and a procurement panel with representation from the Ministry of Education, N4L chief executive Larrie Moore said.
(N4L – officially, The Network for Learning Ltd – has the Finance Minister and Education Minister of the day as its two shareholders. It contracts to the Ministry of Education.)
The Herald understands the contract was effective from the moment it was signed last week. In practical terms, the technology changeover will occur from March next year. The Ministry of Education earlier said that current Fortinet systems would reach end-of-life by mid-2026.
2degrees already had a foot in the door – or at least a chance to showcase itself – as it partnered with N4L to provide 40 rural schools with Elon Musk’s Starlink satellite broadband. In a September 2023 announcement, N4L said the schools were getting Starlink’s business-grade service, which includes a larger $4200 dish with higher “gain” than the $650 Starlink dish for home installs. As with all internet provided via N4L, the service and an associated helpdesk is free for the schools.
“The Satellite for Schools project was a great demonstration of 2degrees’ ability to provide outcome-focused solutions in an efficient way,” 2degrees chief executive Mark Callander said.
“It allowed us to show N4L how 2degrees works and the innovative way we approach technology. It will have also given them confidence that 2degrees is capable of delivering to their needs and is the right partner to provide such a critical network.”
“When you are looking at connectivity in education, capacity, capability and delivery are table stakes,” Callander added.
“What we were also able to bring to the table is our self-service and automation suite. We have an incredibly powerful in-house-built platform that allows organisations to manage and dynamically change services in real time – whether it’s data centre utilisation, mobiles in their fleets, or bandwidth into various locations.
“This saves organisations time and money, and when you are working at the scale N4L does, this is a game-changer.”
The contract is a big win for Palo Alto Networks as it continues to expand its New Zealand business.
But it’s small potatoes overall for the Silicon Valley-based multinational, whose Nasdaq-listed shares were recently trading at a US$112 billion ($180b) market cap (dwarfing Fortinet, which is also US-based). Former Prime Minister Sir John Key has been a Palo Alto Networks director since 2019, with the firm drawn to his foreign affairs and investment banking background, and security experience from his time as GCSB Minister. Two civil law suits (including the one involving Key) were recently put on hold, pending the outcome of a third, similar case.
Earlier this year, Key and other directors were hit by an insider trading lawsuit and a number of copycat suits. Key said the claims had no merit and that such lawsuits were common. (An “if it’s a hit, it gets a writ” environment has also seen Nasdaq-listed Rocket Lab draw similar action, along with many other tech firms.)
The New Zealand Superannuation Fund holds shares in Palo Alto Networks worth $43m as of a June 2024 disclosure. The holding is part of an extensive portfolio of US equities handled by external managers.
“We are immensely proud to partner with N4L and 2degrees to deliver a next-generation managed network for schools across New Zealand,” the firm’s local managing director Misti Landtroop said.
Her firm’s products combine software and physical firewall units to filter and repel a broad range of digital threats, including new AI (artificial intelligence) malware, Landtroop said.
“This collaboration represents a significant step forward in enhancing digital learning environments, ensuring they are safe, reliable and ready to meet the future needs of students and educators,” she said.
Genesis Genergy says it will spend $32m to take a 65% stake in ChargeNet - the public EV charger startup, whose founders include Steve West.
The power company will invest a further $32m to double ChargeNet’s network.
The deal is a tonic for West, who recently saw the $113m sale of the DJ software firm he cofounded, Serato, blocked by the Commerce Commission.
Analysts had mixed takes.
Forsyth Barr was sceptical. The firm said the need for public charges would reduce as the range of EVs improved.
Jarden saw it as a “positive announcement,” though also noted that Genesis said it would be operating earnings-neutral.
“ChargeNet operates 428 public fast-charging points across the country, with over 90% of New Zealand’s EV owners registered as customers. ChargeNet only sells around 10GWh of power annually [for context Genesis’ load totals around 6250GWh], highlighting the embryo stage that this industry segment is in,” Jarden analysts Grant Swanepoel and Nevill Gluyas wrote.
“There are around 78,000 EVs and 33,700 plug-in hybrids in New Zealand. ChargeNet has about a 34% share of the country’s charging stations, while Meridian - at a 21% share - has built its own network in the South Island with 268 stations so far.”
Genesis currently has around 8000 customers with EVs, Swanepoel and Gluyas said. “These customers use, on average, 40 per cent more power than the average retail customer. Genesis targets a 30% market share in EV customers by 2028.”
The pair added, “Genesis has been linked with ChargeNet for some time as it offers its retail customers the use of ChargeNet stations at their home pricing [Tech Insider understands Genesis picked up the tab for the shortfall on ChargeNet’s usual pricing - which runs close to three times the rate for slow home charging]. This is a material saving to EV drivers that depend on away-from-home charging.”
Tech Insider would also note that ChargeNet has been pushing Transport Minister Simeon Brown to pursue a public-private partnership as he mulls options to increase the number of public chargers from around 1200 today to 10,000 by 2030.
Being 51% Crown-owned, Genesis lends itself to a PPP.
Silverstripe founder and director Sigurd Magnusson has returned to a hands-on role with the company. He’s “tasked with revitalising the Kiwi company” as its new CEO, replacing Tobias Oschwald (who lasted just over a year).
His Wellington-based firm is the local contender for CMS (content management system) software, and its platform has been used for a number of Government websites
Magnusson worked at Silverstripe between 2000 and 2016 before leaving for a string of sustainable transport roles with Wellington City Council, Foodstuffs and the Ministry of Transport.
“We’re definitely seeing more competition from international players,” Magnusson told the Herald.
NZRise says Government procurement processes are expensive for local firms. And some Government departments and agencies seem to suffer a bit of cultural cringe when it comes to local options - and be a bit too starry-eyed at Big Tech.
“While global firms are often perceived to be cheaper and lower risk, the reality is that they’re usually more costly in the long run and lack the flexibility Kiwi companies have to tailor their offerings to local needs,” Magnusson said.
“We have plenty of examples in Aotearoa - whether in software, boat building, or the primary sector - of firms operating at a world-class level.
“By choosing local, the government can get both a tailored solution and a better long-term value, supporting our economy while reducing project risks.”
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
Fletcher Building, Spark and Ryman are potentially all on the radar.