By ADAM GIFFORD
Long-established Auckland software house Data Freight (DFL) has sold a one-third shareholding to Australian competitor Eagle Datamation International in a move it hopes will accelerate its expansion across the Tasman and into Asia.
"We went into Australia on our own about 12 years ago, but it didn't work out.
We still have clients there but it costs too much to maintain a presence," said DFL director Robert Wolff.
"This way we get Eagle's distribution network, overall marketing assistance and access to its large client base, while they get a foothold in the New Zealand market."
Both Eagle and DFL make software for freight forwarders, which because of customs regulations tends to be country-specific. DFL also makes a third party warehousing system, CoLoSys, which Eagle wanted to add to its product line.
Third party warehousing is where a freight forwarding or storage company holds stock for another company. It is a fast-growing industry as organisations weigh up the value of owning and managing their own warehouses.
Mr Wolff said that with Eagle holding 70 per cent of Australia's freight-forwarding software market, it was silly for DFL to try to compete, but suggested to Eagle that they could achieve some synergy by merging their technologies.
Mr Wolff said CoLoSys would be integrated with Eagle's freight forwarding, brokerage and accounting systems.
"We're finding that even smaller warehouses realise they can be very efficient if they have a good system. If they have slack stock control and don't know what's in the warehouse, they don't know how to most efficiently satisfy orders and they're basically wasting costs."
CoLoSys costs between $18,000 and $100,000, sometimes more, depending on the size of the installation and the number of transactions processed. Developed in Centura, it runs as a Windows application on any SQL database, typically Oracle or Microsoft SQL Server.
Mr Wolff said that through Eagle, DFL had already sold CoLoSys to two Australian sites. Eagle predicts $1 million in sales by the end of next year.
Mr Wolff and fellow director Hugh Boyd will continue to manage DFL, with Eagle getting two seats on the DFL board. As well as sales offices in Sydney, Melbourne, and Brisbane, Eagle has offices in Singapore and Thailand.
