IBM takes 5pc stake in Descisys

By RICHARD WOOD

IBM has taken a 5 per cent stake in a New Zealand software firm built by a Sri Lankan immigrant - the first local company to move into the top rung of IBM's global partners.

The value of IBM's stake in Descisys is undisclosed but it has an option for another 7 per cent when a target turnover is met.

As a "strategic alliance partner" of the world's largest IT firm, Descisys is in the company of 80 firms, including global financial software heavyweights SAP and JD Edwards.

IBM New Zealand managing director Nick Lambert said the deal showed IBM's commitment to the New Zealand market.

Descisys operates in the business intelligence software market, worth $7.2 billion. Its niche is corporate performance management software for large enterprises.

Vilosh Brito founded the firm, previously known as Decision Support Services, in 1992. It is 95 per cent owned by his family trust. Directors Gerald Ryder and Sefton Thesing have profit-share arrangements.

Brito said it was unusual for IBM to take a stake but useful for attracting investment.

The deal was done with IBM US after a year of discussions and was fed through the local operation, he said.

IBM will help market and sell Descisys software worldwide. But Brito said the firm would need money and was talking to venture capitalists.

Descisys has two products - Prove for corporate, and Camelot for government customers - and works with both text-based and statistical "measurable outcomes".

"It's a management execution system, for turning plans into action, monitoring them, continuous forecasting, and doing it at a low level of granularity," Brito said.

Development of the software - internally funded with a fraction of the resources of billion-dollar competitors - was an example of Kiwi ingenuity, Brito said. The company also has a patent pending for a "front end" system it developed.

"That again is a good example of how a small Kiwi company can do stuff that much larger teams in the US haven't achieved."

Brito arrived in New Zealand from Sri Lanka in 1987. He said he was proud to have been able to do something world-leading.

"I couldn't have done it without the culture and environment of New Zealand."

Descisys' turnover last year was $10 million, half in export sales. Its 50 clients include Carter Holt Harvey, the Australian Department of Financial Affairs, the British Treasury and an unnamed firm, which Brito said was the fourth largest financial institution in Britain.

Its target is to reach $50 million turnover in the next four years.

"There is no way we will get that kind of growth without IBM," Brito said.

Descisys has 65 staff and has offices in Auckland, Wellington, Sydney and London. It plans to open offices in Europe and the US this year and is looking for five more consultants and developers. Brito said 20 more may also be needed in the next few months.