Crystal maker defines decade of Kiwi tech

By Peter Griffin In Technology

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Of all the gongs handed out at the New Zealand Hi-Tech Awards in Wellington on Friday night, it was the one for “hi-tech company of the decade” that said the most about how the tech sector has matured.

The award, judged by an international panel including Dell founder Michael Dell, went to Rakon, the Auckland-based and NZX-listed maker of crystal oscillators that are used in GPS devices such as in-car navigation systems, smart phones and laptops. In winning, Rakon beat out other major tech players and exporters Fisher & Paykel Healthcare (my pick for winner), Orion Health, Datacom and Endace.

These five companies, with a handful of others, form the vanguard of the hi-tech exporting companies in New Zealand and between those five alone, revenue of over $1.4 billion was generated in 2010.

In case you handn’t realised, the tech sector has quietly surged ahead in the last decade, generating export revenue collectively of $4.9 billion last year. That puts it in second place behind the dairy sector and according to industry body NZICT, on track to double in size in the next decade.

When you look at the companies nominated for the award, there are a number of striking similarities. None of them sprung up in the last decade, they have generally grown gradually and steadily over a longer period of time. Datacom was founded in 1965 by two Christchurch accountants. Rakon started in 1967 in the garage of Warren Robinson’s Howick home. Fisher & Paykel entered the respiratory care market in 1971. Clinical workflow software maker Orion Health is slightly younger, formed in 1993, and Endace is the newest of the bunch starting literally a decade ago.

All of them are quiet achievers. With the exception of Fisher & Paykel Healthcare, thanks to its association with an iconic New Zealand brand name, I doubt the average Kiwi has heard of the others. Datacom is New Zealand’s largest IT company, but flies under the radar.

When I asked chief executive Datacom New Zealand chief executive Greg Davidson about this at the Hi-tech awards the other night, he said that the company went after the so-called “MIS200″ companies, so marketing itself beyond them was a waste of time.

Rakon makes the components that go inside phones and computers made by companies consumers know well, but certainly doesn’t play up its relationships with these companies. In fact, despite being a listed company, it keeps a low profile, maybe due to the fact it has sensitive defence and aerospace contracts.

So a relative lack of PR and brand-exposure hasn’t held these quiet achievers back. I was struck watching the promotional videos that introduced each nominated company at the Hi-tech Awards at the lack of sophistication in the way the companies presented themselves. Rakon boss Brent Robinson quickly descended into corporate technobabble when explaining what his company does. The Orion video showed an awkward Ian McCrae posing in the company’s Auckland offices and really failed to get across what has made the New Zealand company so successful on the world stage.

You have to admire these players, who are in business for the longhaul. Their way of doing business is a world away from the self-promoting, consumer-orientated brands that dominate the tech landscape – Apple, Google, Facebook and Twitter.

But I was left wondering the other night whether getting to that $10 billion mark in the next decade is going to take a bit more self-promotion, a little bit of marketing spit and polish. Sure, we need to promote the Kiwi tech inc. brand abroad as the tech sector gains some serious critical mass.

But we also need New Zealanders to buy into the dreams and aspirations of our tech companies so they are willing to invest in their future – either through their tax dollars funding R&D or through direct investments buying shares in these companies. In effect, we maybe need to sell ourselves a bit better as we compete for a share of the burgeoning global tech market.

The five nominees by revenue:

Orion Health: $63.7 million

Fisher & Paykel Healthcare: $503 million

Datacom: $667 million

Endace: $46 million

Rakon:$144.5 million

Source: TIN100 Industry Analysis 2010

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