Yoke Har Lee: Even a niche is bigger overseas

New Zealand is not producing a steady supply of graduates with software skills, says Gentrack's James Docking. Photo / Brett Phibbs

It's taken a 30-year evolution, but software company Gentrack can now claim a share of more than 80 per cent share of its key market - billing systems for local utilities such as energy and water companies.

Also, the company is enjoying rapid growth with its software for airports.

Gentrack's airport billing software, Airport 20/20, is already being used by nearly 100 airports around the world, including all of Finland's 25 airports, London City, Sydney International, Dublin International and JFK International's terminal one.

The company also recently bagged a deal to deliver billing solutions to Pakistan's 45 airports.

In the utilities billing market, the competition is with global suppliers of enterprise solutions systems. "It is a very specialised market. Globally, there are not many players. In terms of the airport billing system, there are even less," says Gentrack chief executive James Docking.

The airport system is a niche Gentrack carved out for itself after looking at where the opportunities were for its software skills. Thanks to its long history of dealing with utility-billing software, Gentrack was able to focus on developing a comprehensive airport billing system for the aeronautical as well as the non-aeronautical side of the business.

The airport systems niche is something large enterprise software developers cannot afford to spend time on, says Docking, as they have their energies focused on building big generic systems for large enterprises.

Gentrack's Airport 20/20 software caters for a raft of airport management activities including aeronautical billing, flight information display, baggage control, resource management, airport data management, passenger processing and gate management.

One of the advantages of being a specialist is that generic enterprise software builders often come knocking on your door to co-pitch for work. Docking says in Pakistan's case, Oracle was working on pitching for the financial software but roped in Gentrack to supply the airport system component.

Gentrack has had a convoluted history, beginning its first life in 1979 as a manufacturer of televisions under the AWA trade name.

After a series of twists and turns, mainly in the software industry, Gentrack in 2007 underwent a major metamorphosis with a management buy-out that subsequently led to shares in the company being transferred to investment company Bayard Capital, as well as ANZ Capital.

Bayard - now called Landis & Gyr - was set up in 2002 by Cameron O'Reilly and its shareholders include John B Fairfax, Sir Douglas Myers, Kerry Stokes, Sir Anthony O'Reilly and the Singapore Government's investment vehicle, Temasek Holdings.

For Gentrack, the Landis & Gyr shareholding helps the company "refocus its business on the utilities billing space".

With such a big share of the local market, there is limited room for growth, so the push is on for a more aggressive expansion overseas. "One of the biggest challenges is the absence of a big home market ... for us to grow we have to grow internationally," Docking says.

Its natural target overseas is Australia, which has a market similar to New Zealand's. Gentrack's utility billing system has about a 20 per cent market share in Australia but it is eyeing more growth as existing systems are replaced, Docking says. Gentrack already has about 30 people in its Melbourne office. It also has offices in London, Manchester in Britain and Orlando in the United States.

In the mid-term, Docking hopes Gentrack will be able to use partnerships with sister companies in Britain to achieve faster growth.

It already has a strategic partnership with Generis Technology, which provides business and software solutions to gas and electricity companies and has some big utility companies on its client list, including British Gas, Scottish Power and Scottish and Southern Energy.

The US also promises to be an exciting market for Gentrack. President Barack Obama's plan to invest in smart grid systems for utilities will present major opportunities for global suppliers.

There is huge investment in this area worldwide, which will change the way consumers have information from utilities communicated to them, Docking says.

He is happy to see the company achieve an annual growth rate of 20 to 30 per cent, and says the conservative stance is deliberate. "It is part of the gameplan; we know of software implementation horror stories, we don't want them in our own backyard."

The internet is helping Gentrack gain a global audience, Docking says, and the company uses targeted fairs to present Gentrack's ideas, while customer roundtables keep the company abreast of what customers need.

Like most software companies, Gentrack laments the absence of a constant supply of graduates from local universities armed with software training. Docking believes there is not enough emphasis from the Government on ensuring there is a ready talent pool of software developers and engineers to feed into the software industry here.

"We have no great wish to set up in India," he says, adding that the government has not understood how strong a player New Zealand can be in the global software market.