Small business: Embracing the cloud - Alex Petraska

Finance manager Leon Petraska (left) and general manager Alex Petraska (right), of First Software.

Alex Petraska is general manager of First Software, which he runs with his brother Leon, the firm's finance manager. The company was founded by Alex and Leon's father, Vidas, and their uncle Saul Petraska. First Software is based in Newton, Auckland, and shares premises with its sister company, Sprint Fit.

Can you tell me about First Software and, in particular, the cloud-based products you offer?

For the past seven years the company has been developing software on the Microsoft platform and three years ago started developing cloud-based applications. We develop cloud-based Enterprise Resource Planning (ERP) solutions for retailers and distributors who typically have bricks-and-mortar operations as well as selling online. Our ecommerce functionality is embedded into our stock management module - this means integration isn't required to disparate applications to sell online, as we do it all in one system. Our N2 ERP software also includes point of sale, inventory management, customer management, financial management and business intelligence functionalities.

Why has the business decided to go the cloud-based route?

Because our ERP software is browser based it is very easy for users to learn and use; everyone is now familiar with how modern browsers work and we take advantage of that. We also get economies of scale through being able to share cloud-computing platforms, which we pass on to our customers.

You've been developing cloud-based solutions for around three years. What changes have you seen in the market during that time?

The biggest change has probably been acceptance of the cloud as the default option for organisations; the advantages it offers in terms of lower cost of ownership and access from anywhere have taken hold.

The other trend we're seeing is that a lot of organisations are now on their second or third attempt to get cloud-based applications that will work for their rapidly growing businesses. They quickly outgrow the free of very low-cost options they start with and have reached a point of maturity where they want a fully integrated ERP system but still with the advantages of being cloud based.

What are the challenges of being a small business in the cloud space - and how have you worked to overcome them?

Gaining credibility in a market dominated by internationals, we decided to address this by setting up a retail business that could be a showcase for our cloud N2 ERP software. This business, Sprint Fit, has gone on to be very successful. When prospects come in for a demonstration they see a real store and website. This shows customers that we can speak their language and understand their issues and opportunities.

What advice would you have for others looking to develop a small business selling cloud-based solutions?

Understand very clearly why your business exists and what you want to achieve, and make sure you understand your market and focus. Our focus has evolved over time as we've honed in on what differentiates us.

The other aspect with cloud-based solutions is working out who you need to have alliances with. The market is fragmented and we are striving to produce a unified solution for customers. For example, we have recently started working with a company called Supply Chain Solutions who are a 3PL, or third-party logistics provider. We're integrating our ERP software with their 3PL operation to give our customers, who don't do their own warehousing, a fully integrated IT platform, so they will be able to make sales on the web or in store and have the goods despatched in a fully automated process.