Australian regains technology after tech shakeout

Australia's sadly depleted stocks of intellectual property are being replenished as a knock-on effect of the tech wreck.

As financial stresses mount on overseas parent companies, talented teams of Aussie technologists that were acquired in more optimistic times are buying back the farm.

Recent examples of the trend are Snapgear, a Queensland company on the leading edge of the embedded Linux world, and Web design company Deepend Sydney.

The intellectual property generated by Snapgear's engineers went offshore 18 months ago when the company, then known as Moreton Bay Ventures, was bought by U.S. company Lineo Inc.

Flush with venture capital and headed for a public offering, Lineo saw Snapgear's world-class expertise in porting Linux to embedded microprocessors as a key element in its strategy.

When the market plunged and Lineo had to scuttle its IPO plans, the door was opened to a management buy-out led by Snapgear founder Bob Waldie.

Waldie and Snapgear's 20 staffers, all based in Brisbane, last month completed the buyback that gives them control of more than 80 percent of the company.

It is scoring well in the small business virtual private network router appliance market where its skills give it a significant competitive advantage, says chief technical officer Rick Stevenson.

A recent success was development of a secure embedded appliance for racing and sports wagering organization TAB Queensland.

The appliance replaces a conventional PC and its solid state design reduces both total cost of ownership and downtime.

Interactive Web design company Deepend Sydney has also completed a management buy-out to rescue itself from the collapse of its U.K. parent.

Its staff of about 10 now trades as a wholly owned Australian company linked to an international network of five overseas offices. Clients include Nokia Australia for which Deepend designed a micro-site for the launch of the Nokia 8310, and brewer Lion Nathan.

Both Snapgear and Deepend are welcome reversals of the steady flow away from intellectual property-based products which concerns industry players such as financial software company Technology One founder Adrian di Marco.

"We have a A$3.5 billion (US$1.82 billion) trade deficit in software products and it is growing at 10 to 20 percent a year," Di Marco says.

"It is exploding because across Australia we have very few software companies developing intellectual property. The industry is moving to service-based companies, which typically service the products of multinationals.

"There should be 100 companies like Technology One in Australia but there are only a handful and we have to reverse that trend."

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