Tap, tap: sound of world at Peace

By Mark Reynolds

There is something slightly spooky about the atmosphere inside the central Auckland headquarters of Peace Software International.

It is disturbingly quiet.

In one room, about 15 professionals sit at ash-coloured desks, quietly tapping elaborate lines of code into oversized PCs.

Blinds are closed, lights are dimmed and even phones have been banished from most work stations to keep disturbances to a minimum.

This is a place for serious deliberation.

"We find the environment suits the sort of people who are good at what we want," said Brian Peace, the 41-year-old chief executive of the software company that bears his name.

What Brian Peace wants is people with the discipline to write and develop the software used by utilities like electricity and gas companies to keep track of the energy consumers use and to organise billing systems for those services.

Power, water, gas and phone companies have been supplying and billing their customers using computer-generated invoices for years, but Mr Peace is adamant his company has developed a system that is good enough to become the industry standard throughout the world for this billion-dollar plus industry.

"What is different about what we are doing is that we have developed a product specifically for utilities operating in deregulated markets," said Mr Peace.

The product is a system that can accommodate complicated pricing structures and service measures, while offering a range of ways for customers and service companies to communicate with each other.

It is browser-based, meaning information can be accessed and swapped via the Internet. Peace's energy system can be used to forecast power usage and even calculate what a power bill might be under different billing tariffs.

A feature of Peace's products is intricate graphics that make elaborate power equations easier to comprehend.

By most accounts, what Peace has developed is ahead of what is available in most parts of the world - and that is gaining the company some special attention, especially from technology-savvy investors in the United States.

Just last week Peace confirmed it had secured a $20 million capital injection from two United States investment funds, who are keen for the company to push its billing system into North America.

Those firms - InSight Capital Partners and Arete Ventures - are among the more successful technological investment fund managers in the United States.

The key benefit of having these investors on board is that it boosts Peace's credibility, said Mr Peace. Working with advisers and partners of Arete and InSight will give his company access to markets and information that it could only have imagined a few months ago.

But while access to United States expertise and funding seems like a dream come true, Mr Peace points out that it is the result of long development for his company.

That started nearly 20 years ago, when he took a couple of computer-related papers at Auckland University as part of a Bachelor of Science Degree in mathematics.

The next year, he took eight computer-related papers on his way to completing a Masters of Philosophy in Information Technology.

While at university, he also joined the fledgling Auckland Computer Society, as a way of staying in touch with consultants who were applying computer skills to industry.

The time spent with members of the computer society led to an offer of work developing a payroll system for the Devonport Borough Council.

Once university was over, Mr Peace got together with a cousin and started up a consultancy business advising companies on their technology needs.

"We would recommend a direction that a company should move in and we noticed suppliers would then be called in and would dump a product down. They'd take a massive margin and just leave us as consultants to sort the whole system out.

"We noticed more and more that customers were looking to us to provide technical support for systems development.

"These were customers who had large databases and high volumes of transactions where there were not any software packages readily available for them."

In 1985, Mr Peace decided to set up Peace Computers as a company rather than a consultancy to build the specialist packages.

His first customer was a circular distributor on the North Shore, that needed to keep track of supplies to 8000 distributors and feed back information to advertisers.

"I remember what amazed me in the beginning was that you would spend days and weeks creating a piece of software that you could never see, and at the flick of a switch the whole thing executed ... just like that."

Systems for the Ministry of Defence at Devonport and one for the Harcourts real estate chain followed. Then, in 1989, Peace was asked to develop a gas billing system for the then Auckland Gas Company.

"That's when New Zealand was starting to talk about further deregulation of the energy markets, so we designed the system in a way that was very modular and could be applied elsewhere."

Systems for other power companies followed, including Energy Direct Capital Power and Electro Power.

Those first systems included Internet access for customers. This made them , Mr Peace says, "one of the first - if not the first in the world" to have such access.

The Internet link got the company noticed overseas, and it had soon sold packages to Advance Energy in New South Wales and cracked the North American market with a sale to Enron California, a division of the giant Houston-based Enron Corp.

Mr Peace said the Unites States market will be the key to Peace's future success.

"They are just coming to grips with deregulation there, whereas we have been developing a product for that environment for a number of years."

The Peace product is also being developed for the convergence of utilities, whereby a range of services can be tracked and sold through the one system. A move into the telecommunications sector, for instance, is an obvious next step.

The company reinvests about 11 per cent of its revenue into research and development, and updates its packages for New Zealand customers when it develops a new service for a customer elsewhere in the world.

Peace employs about 115 people but expects that nearly to double by the end of the year with new offices being set up in the United States.

While parts of Peace's operation have to be extremely disciplined, Mr Peace said his company is successful because staff are given room to think.

He is a fan of Ricardo Semler, the Brazilian business counsellor who in his book Maverick advocated a consultative democracy in which employees set their own salaries, work hours and select managerial candidates.

"We are having success from New Zealand because the people we can employ here are much more adaptable than people elsewhere in the world. I don't want to stifle that," said Mr Peace

Peace's five-year vision is to establish itself in Europe and win more business in Australia, besides its United States expansion.

Mr Peace said his company over the next five years has an opportunity to take advantage of the experience of deregulation here. Ultimately, he expects larger international software companies to develop competitive products.

Meantime, his team in Auckland will keep the noise down and get on with the job.