Taking over the world

In the midst of the current doom and gloom around power shortages, petrol and food price hikes, and interest rate increases, now might be a good time to reflect on something positive, like the number of South African companies doing great things in this country and abroad.

South Africans traditionally have a 'can do' attitude: give us a problem and we'll solve it! In this feature, ITWeb showcases some of the companies providing solutions aimed at relieving local business headaches.

For every off-the-shelf solution available, there has to be at least one niche product, targeting specific challenges faced by companies in a specific sector or locality. In SA, a number of home-grown players are making themselves comfortable in those niches. Local software developer MineWare is such a company.

Run by father and son team Paul and Ian Saker, the company was founded in 1996 with the intention of developing "a tool that allows mining people to know what is going on underground on a daily basis without having to ask everybody".

Saker senior started developing the product at Unisys, which subsequently decided mining wasn't strategic to its portfolio. "We bought ourselves out [of that business] and took the people, existing clients and software," he says.

Twelve years later, the product is still going strong and is in use by the likes of Gold Fields, Lonmin, Harmony Gold, Northam Platinum, Simmer & Jack, Aquarius Platinum, Uranium One and First Uranium.

The secret of his success, says Saker, is the company's flexibility. "We tend to make changes to the system as and when customers demand them; we're continually customising to suit their requirements. As a result, customers see us more as a partner and less as a supplier."

Developing solutions to meet customer requirement has also been behind Striata's success, says CEO and founder Mike Wright. "Striata was founded in 1999. Inspired by the power and efficiency of electronic communication, we developed innovative solutions for the delivery of bulk communication by e-mail. This was in response to the growing market demand for secure, effective and efficient electronic communication. Our organisation has been profitable since 2000 and, today, we have more than 150 companies, mostly blue chip, using deployed and ASP services. Our footprint has also been extended globally - with offices in North America, the United Kingdom, Australia and South Africa."

Striata delivers enterprise-level e-mail billing and marketing solutions. "We have developed our own high performance e-mail delivery engine to meet specific customer requirements. Our intellectual property is developed and retained in-house, allowing us to constantly develop and expand our capabilities," Wright notes.

Intellectual property (IP) is a big factor when it comes to software. Says Ability Solutions sales and marketing director John Olsson: "The fact is, with us being local, other than price implications, the real success story has been around IP - the fact that we had the original design and development teams on-site and the source code here. Our niche market has always been clients who rightly or wrongly felt that they could not get an ideal fit to the business from off-the-shelf solutions. Over the years, we've been able to extend the IP in the product to give 100% fit to client requirements."

Ability Solutions has been going for 30 years, providing customisable financial and distribution software solutions to local and international customers.

Having its own IP has also proved valuable for Cambrient. Says CEO Kevin Lourens: "We decided seven years ago that we would create a local Web content management and marketing platform. It may seem like a weird decision because that kind of technology is not that unique in concept; it was quite a fundamental decision for us. We looked at the overseas vendors and saw a big disconnect between the vendor and the people implementing the solution. Our theory is that if you bring the elements together and worry more about what clients are trying to get out of it, you get closer to the solutions clients need and can be fully accountable."

Lourens estimates that over 100 sites will run on its platform by year-end; clearly this philosophy has worked.

SecureData Content has a similar approach, offering a locally developed enterprise content management (ECM) system. Says MD Tony Nutter: "Typically, customers get a product like FileNet, pay an absolute fortune and use around 20% of the product. You can buy our product for a damn sight less and use 85% to 90%, and still be a happy customer."

Illustrating this point, Nutter refers to Liberty Life, a former FileNet customer. "We kicked out FileNet because we were obviously cheaper; we could show that our system worked and would save them money, which I think [amounted to] R25 million over two-and-a-half years. When we got in there, there were 200 users; we now have 5 000. Can you imagine what it would have cost?"

[Regulatory obstacles] force growth into funny bonsai patterns in places.

Anton Potgieter, CEO, Huge Telecom

That said, specialised services are also in demand, as evidenced by local hosting and security organisation Telspace. The company does penetration testing and attack simulations on clients from SMEs to big corporates. Says company founder and MD Dino Covotsos: "It's key for us to provide services to clients that they can't get anywhere else; it is why we're a success."

Of course, no successful organisation gets there without its share of challenges either. For Covotsos, it was the fact that he was only 19 years old when he started, and corporates were disinclined to take him seriously. Today, Covotsos spends a lot of time lecturing and conducting training sessions all over the world. Clearly, his age (25) is no longer an issue.

JSE-listed Huge Telecom had its fair share of challenges during its start-up phase. Firstly, says CEO Anton Potgieter, there was the financial challenge of setting up an annuity business, and paying the bills while "building critical mass".

Then there were the technical challenges of finding equipment, which led the company to eventually develop its own. Lastly, he says, were the regulatory challenges, which "were definitely an issue with Telkom trying to take us to court every couple of months".

"We [endured] by banding together as an industry (via a body called the Callback Association), started with the original court case, then moved on to the cellular LCR case. Luckily, we won that one so the industry survived. These days, there's a similar flavour to that; they're not trying to outlaw us, but there are more regulatory obstacles than we'd like, which definitely hinders the industry and forces growth into funny bonsai patterns in places."

EOH CEO Asher Bohbot cites skills as a perpetual problem. "I think we need to grow and develop skills and use them more effectively. This challenge is an opportunity too; we shouldn't bury our heads in the sand. People emigrate and I think that we mustn't be na"ive and ignore that. We must understand why people do it. If we understand it, maybe we can prevent it. Starting to think globally, we hope, may help the situation [as it gives staff the option to work in other countries without leaving the company]."

For local electronics entrepreneur Inus Dreckmeyr, who turned a youthful passion for electronics into a career, the skills shortage is also an issue, as are partnerships.

"I made a couple of bad decisions - particularly with regard to partnerships - along the way. We've come close to going under once or twice. And we've had to deal with the problem that probably faces every innovative company: a lack of money and resources. Development is expensive, but we've been lucky in that we managed to find our niche in the market. Now, being part of the Comztek group has stabilised Netshield. It's also given us more than solid financial backing - it has given us a 'respectability', which engenders market trust," he says. Comztek acquired a majority stake in Netshield early last year.

We get no points for developing local products.

Inus Dreckmeyr, MD, Netshield

"Another challenge is to build a solid middle-management team that can support the company's growth. At the same time, growth itself brings its own challenges. Netshield has always been a very informal, relaxed and stimulating environment in which to work - an environment that encourages creativity and innovation. We will have to find a way to retain this culture of innovation as we expand."

A further challenge, says Dreckmeyr, is the South African government's lack of support for companies that develop locally and are trying to build SA's technological capabilities and capacity. "When it comes to the awarding of government tenders, we get no points for developing local products and technologies, or for being 'Proudly South African'," he states.

For Softline CEO Ivan Epstein, the high degree of global competition and fast pace of change can be problematic. "Globally, there is competition all the time as well as rapidly changing technologies."

He is not too concerned about the global recession, though. "We're obviously cautious, but in an optimistic way. We sell into the SME market, which usually tends to grow, even when in a recession. Corporates downsize and this gives the opportunity for entrepreneurs to open shop. Having scale is also positive, and we have scale in the number of businesses we service."

Epstein also has good people. "It took me a long time to realise that good people make a good business; bad people can make a good business bad. Having the right people around you with complementary skills who can pull together and make great things together - that's the secret to success," he states.

EOH's Bohbot echoes this: "The people dimension plays a role - get the right people around you. And you need to be lucky; it's not enough, but you need it. The other prerequisite is hard work as there are no shortcuts."

Huge Telecom's Potgieter concurs: "The secret of success anywhere is hard work. Even guys like [Mark] Shuttleworth weren't just lucky. As Gary Player says, 'The harder I work, the luckier I get'."

Says Faritec CEO Simon Tomlinson: "When we started, Faritec was a small company. Our secret was the relationships inside the business, with certain partners and customers we had. For the first seven years, four of us started it and owned it. Today, even with two having left, the four remain friends. We created space for other relationships and partnerships to happen inside the business. The other thing is that while the set of solutions and offerings we take to market has grown over the years, it has remained focused within a particular space in the IT market."

Although the current market faces any number of challenges, particularly as far as skills and power supply go, there is also great opportunity and potential for those who are prepared to look at the challenges with a view to growth.