Software firm searches for China success

Peter Wren-Hilton says Pingar has always fostered relationships with universities. Photo / Bay of Plenty Times

Local software company Pingar has begun an ambitious push into what seems an unlikely niche market for a New Zealand business: Chinese language computer search engines.

Pingar's Tauranga-based co-founder and chief executive, Peter Wren-Hilton, says the four-year-old company has tapped the resources of New Zealand-based Chinese-speaking researchers so it can tailor its search engine technology for the world's biggest market.

"China's door is open now to more than just beef, lamb and milk products. They are wanting to engage with New Zealand in the areas of innovation and science," Wren Hilton says.

"The combination of our unique technology, the size of the Chinese market, their willingness to engage with New Zealand companies around science and innovation, and the fact that we have Chinese PhDs on our payroll makes this a key strategic decision by Pingar to move into this market."

Pingar's search software is targeted at businesses wanting to trawl their internal databases, and possibly the internet.

As well as being based on Pingar's business-focused search algorithms, the software differs from traditional web search engines such as Google because it delivers results in the form of a PDF document, rather than a list on internet links.

"Last year we began to focus more on semantic search - the ability to enable internet and enterprise users to fine-tune their search queries they can find relevant results much more quickly," says Wren-Hilton.

"What we also recognised is that rather than provide a search solution out of the box for everybody we've decided to take a much more vertical approach to search so we're in the process of developing enterprise [business] and internet search applications designed specifically around various verticals such as legal, accountancy and finance, HR, government, and education. People within those verticals have got their own specific search needs so by developing semantic search algorithms that match those needs we can deliver a much more relevant set of query results."

Pingar has partnered with Microsoft to tailor its platform to run with Microsoft's business intranet hosting software, SharePoint. The ability to sell Pingar as a search add-on to businesses using SharePoint has opened up a huge global market, says Wren-Hilton.

Microsoft's interest in Pingar has been enhanced by the decision to create different versions of the software for specific vertical markets because "they see that as effectively being a way of differentiating Pingar further from traditional search engines which tend to take a much more horizontal view of life".

Wren-Hilton was in Shanghai last week where Pingar hosted a dinner at the New Zealand pavilion at the city's Expo to unveil the Chinese language version of its software. The function was attended by local business partners, including Microsoft's Shanghai regional manager, prospective customers and New Zealand trade officials and diplomats.

He also travelled to Yantai, a sister city of Tauranga in China's Shandon province to discuss forging research and development partnerships with Yantai universities.

"In China, personal relationships are probably more important than other markets we're in," Wren-Hilton says.

"One of the reasons we're approaching China from the point of view of doing joint research and development exercises with different universities and research institutes is that it will give us a chance to develop longer-term relationships and then hopefully we'll spin out the commercial benefits from those relationships once they're properly established," he says.

"On the commercial side it will be a slower burn there than going into, say the US or US markets where deals are done much more quickly. But the thing about China is that you've got to look at it from the long-term potential. You may not get the big deal in the first six to nine months but as long as you can build up relationships, then when the deals do begin to happen you can expect to grow that market quite quickly."

Pingar has always fostered relationships with academic institutions. Its technology has been developed in association with the University of Waikato's commercialisation arm, WaikatoLink, and the Auckland Institute of Technology.

"That university connection has been very important. They are able to provide us with PhD researchers who can do the sort of work which would be very difficult to find in the private sector. It has accelerated our research potential."

When the potential size of the SharePoint user market became clear last year, Pingar changed its business strategy from an earlier plan to target sales of its software to "content aggregators", such as media organisations with large, content-rich websites.

Its initial plans had been to sell software that would allow registered users of news websites to receive PDF search results labelled with sponsorship or advertising relevant to their demographic. Pingar and its content provider clients would share the revenue generated by the sponsorship and advertising deals.

"That entire product is ready to go, it's just that in terms of market size in the enterprise space, Microsoft SharePoint has offered us a route to a very substantial global market really quite quickly," Wren-Hilton says.

The company is continuing to talk to publishers and other content providers, and has developed good relationships for possible future sales as part of its push into China, he says.

This year's spat between Google and Chinese authorities over the censoring of web search results could even play to Pingar's advantage.

"There is a lot of sensitivity as to what search engines in China can do and because Pingar's model is based on the enterprise or the publishers who takes Pingar on determining what content is accessible, we get around that issue of just searching the worldwide web."

The company recently completed a fund-raising round from what Wren-Hilton describes as a number of high-net-worth New Zealand individuals, many based in Tauranga and the Bay of Plenty.

He says the money raised will be enough to finance the company's drive into China and see it through to next year when it is expected to become profitable.

"We have to be there [in China] because it's a market that can no longer be ignored. We just know from all the evidence that we've seen that China is just going to become a bigger and bigger market for all technology companies."

Wren-Hilton chooses to live in Tauranga for lifestyle reasons but the company also has offices and researchers in Auckland, Hamilton, Hong Kong and at the University of Swansea in Wales.

"The benefits of that [geographically dispersed] model is when we choose to go into those specific markets we have a presence on the ground so we're not just knocking on new doors, we already have people in situ so it becomes a lot easier to move into new markets. We don't see having a workforce that's spread around globally as being a disadvantage at all," he says.

"The downside sometimes is when we have global conference calls they're either very early in the morning or quite late at night but it does mean we're able to do work in one part of the world during the day and if any editing or testing needs to be done, that can be done effectively overnight somewhere else, so when we come into the office in the morning all testing processes have taken place either in Wales or Hong Kong and the results are ready for us when we turn on our laptops."

SHARING THE STRATEGY

Pingar co-founder Peter Wren-Hilton says the niche search platform software company's strategy as an exporter has included:

* Using the resources of government agencies including NZTE and MFAT to smooth the way into markets such as China.

* Attracting the interest of, and working with, a key, high-profile partner: Microsoft.

* Developing multiple revenue models. Selling its software as an add-on to Microsoft's intranet development tool SharePoint is the focus, but Pingar is also establishing alliances with publishers who could benefit from using its technology.

* Partnering with academic institutions which have the technical expertise required to fast-track the company's R&D.

* Making use of international investment incentives. Pingar has established an office in Wales through a government initiative to attract high-tech companies by offering business subsidies.

* Consider being based in New Zealand as a business advantage, rather than a handicap. Being headquartered in Tauranga, but with developers working in Asia and Europe, Pingar can work around the clock.