Searching for solutions

22/07/2003 - 22:00


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Alison Birrane continues her four-week series on technology leaders by looking at the changing face of e-commerce and the major players in WA’s e-commerce sector.

THE prevalence of WA-based companies in this year’s Deloitte Fast50 is testament to the State’s robust technology sector, particularly in the field of e-commerce.

If e-commerce can be defined broadly as the technology that facilitates business, most IT firms would fall into the category. But it has been a tough year for some in the e-commerce industry with several companies going into administration or being the subject of mergers or takeovers.

Web firms rate highly on this list and include Pretzel, which was recently bought by PIVoD Technologies after an unsuccessful bid by Vianet. Also there is Method+Madness, which was sold to Sausage Software before disappearing from the WA landscape altogether.

But providers of e-commerce solutions are not limited to web-firms and there are many e-commerce solutions providers that have not only survived, but have experienced growth with their e-commerce products, despite the consolidation within the industry.

Empired Limited managing director Justin Miller said Empired, which ranked fourth on this year’s Deloitte Fast50, was a company that was indicative of the consolidation that occurred within the industry.

“Empired just happens to be at the right end of it,” he said.

“Our success in the past 12 months across the board is due to diversification. I don’t think it pays to be a niche player.”

Empired is the result of the merging of two software companies – BigRedSky Ltd and Tusk Technologies – and has four business areas including: infra-structure and integration services; application development; consulting services; and software systems.

Mr Miller said business was more discerning of e-commerce solutions and generally had three questions with regards to business technology solutions: Will it save money? Will it make money? Will it provide a point of differentiation among competitors?

Mr Miller said the market had experienced a “classic pendulum situation” in the past few years where there were huge highs, followed by huge lows.

But the sector already was moving into the realm of normal business where the situation would once again be favourable to niche players, he said.

Unisys West CEO Murray Rosa said organisations were past the e-commerce hype and wanted business solutions rather than merely the latest technology. He said business decision makers preferred innovative solutions that facilitated competitiveness and cost reduction.

Mr Rosa said there was a shift in e-commerce to business process outsourcing, which involved reducing the cost of operations, and shared services.

pieNETWORKS Limited managing director Campbell Smith attributes the survival and growth of pieNETWORKS to an adherence to traditional business fundamentals along with an innovative approach to technology in their markets.

“We consider that we’re completely focused on the industry that we’re in, but we’ve diversified within that industry by targeting different sectors,” Mr Smith said.

“We’ve concentrated on those e-commerce markets that have continued to grow despite the tech crash, which are banking and government.

“From an operational business perspective, the downturn’s effect on pieNETWORKS share price hasn’t altered the company’s ability to service its clients.

“Whilst I would rather have a high share price, it doesn’t affect the day-to-day operation of our business.”

ineedhits managing director Clay Cook said the web optimiser had succeeded through the downturn in the e-commerce market by focusing on core competencies.

“By concentrating on our niche and not becoming diversified we have ensured that we have gotten to the top of our market,” he said. “We didn’t look for funding; from day one we looked at profitability and funding ourselves.

“A lot of strategic partnerships helped our growth along with strategic advertising, which involved more than straight banner advertisements and a flexible pricing structure.”



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