In this opinion piece, Kaye Harding, SaaS Partner Lead at Microsoft New Zealand, thinks a major tipping point is approaching for the local technology industry.
It's been the dream of many a Kiwi tech entrepreneur – create that winning idea and turn it into a successful local business that catches the eye of global firms with deep pockets.
This past year it seems like New Zealand's SaaS (software as a service) market has been hotter than ever for big international buyers; they've snapped up billions of dollars' worth of companies from Timely to Seequent and Rocos.
However, growing evidence suggests an exciting new trend is on the rise. Rather than being part of another firm's global expansion into New Zealand, some Kiwi SaaS companies are shopping the world for smart acquisitions of their own.
Acquisitions are a time-honoured way of adding experience and new abilities to an organisation. While some firms have found their optimum size and don't want to go bigger, acquiring another business is an easy way to branch out into new areas or grow capabilities.
Local inventory management company Cin7 is a great example. This year it acquired Dear Systems out of Australia and Overhive out of the US to fuel its global expansion. Those acquisitions will allow Cin7 to serve thousands more customers in those markets, providing local on-the-ground capabilities in countries where it sees the biggest opportunities.
Meanwhile Plexure recently purchased Australian transaction platform provider Task to diversify its customer base, create an attractive end-to-end service and provide cross-selling opportunities for both companies. Xero has acquired Danish workforce management software company Planday, with plans to take the platform into new international markets.
What does all this say about the SaaS market in New Zealand? It's exciting evidence of our maturity as a tech nation, as we reach a scale never seen here before.
IDC research shows that the Australia and New Zealand SaaS market grew by 29.6 per cent last year alone. Microsoft has put a huge focus on its SaaS partner ecosystem in New Zealand and we're signing approximately six new partners a month – phenomenal growth.
When the new Microsoft Aotearoa datacenter region arrives, it will take this growth to a whole new level again, enabling more businesses to scale up in the public cloud and innovate with new technologies that weren't cost-effective or achievable at the right scale on our shores before.
It may just be a major tipping point in the local tech industry's history.
For Kiwi tech businesses hungry to think big and go global, this is exactly the time to do it – as we arrive at that critical mass where new players can learn from those who have gone before and build on each other's success.
The really inspiring thing is that, while we may only have one or two household names when it comes to Kiwi software providers today, in the future there's potential for a long list. In future, those households will stretch right around the world.