Overnight sensations

One name that springs to mind when recollecting on the heady days of the pre-dotcom crash is Ariba which entered the Australian market with a bang.

Winning contracts with Orica, Origin Energy and the Department of Education and Training, Ariba, which develops procurement solutions, was a real player in the local market. But as the halcyon days of the Internet boom faded, so did the scale of its operations.

Ariba cut back its operations in 2002, closing down two offices in New Zealand. Ariba’s Australia and New Zealand CEO Allan Smith said the impact of this move was minimal because there were no clients in New Zealand.

However, Smith is unwilling to provide current employee numbers but admits it is substantially less than the 30 staff they had back in 2002. He said Ariba is committed to future growth in the region and future development of its technology.

The US-based software company has still managed to secure a few big wins since scaling back its operations including the Commonwealth Bank, Insurance Australia Group, Lion Nathan and OneSteel.

Entering the local market in July 2000, E.piphany announced some impressive wins within a two-year time frame including Energex, Suncorp Metway, Video Ezy, Racing Victoria and Informatel. So certain was the company of its staying power E.piphany created an advisory board specifically for the profiling and strategic guidance of its Asia-Pacific region operations that boasted high fliers such as former Westpac Banking Corporation CEO Bob Joss and former NSW premier Nick Greiner.

But like so many of its counterparts, E.piphany came to an abrupt halt in 2003 closing all Australian offices.

According to PricewaterhouseCoopers, which was appointed as E.piphany’s tax agents and accountants to tie up loose ends in Australia, sales and customer support is now sourced from the US. Suncorp Metway’s media adviser Alissa Lewis said it has had no contact from ePiphany and the software is essentially sitting on the shelf doing nothing.

Some players have survived through acquisition. For example, Protagana lived on after being picked up by DoubleClick at the end of 2002.

The company has five offices across the Asia-Pacific region and the company's regional director Ralph Hirt said the acquisition has given Protagana customers access to more resources than previously.

Vignette, a provider of applications for Web content and portal management quickly made its mark in Australia by winning contracts with National Australia Bank, Fujitsu, Toyota Australia and Commonwealth Bank. Although suffering an unsuccessful pilot in group technology at Commonwealth Bank, in 2001 the bank's institutional business and services division successfully implemented Vignette's version 6 for intranet and Internet publishing.

Office closures and staff cut backs soon saw Vignette's clients accessing support from the US, although clients report this has not been a problem.

Evidence suggests that Vignette is committed to the evolution and growth of its technology having recently completed the acquisition of a document and records management solution, Tower Technology for $US125 million. A spokesperson for Vignette said Tower Technology extends its resources and offices across Australia.

Blue Martini, a solutions provider specialising in technology that directs knowledge to frontline staff to optimise customer interactions, entered Australia in 2000 and quickly built strong alliances with Accenture and Fujitsu. Not immune to the downturn in the market in 2002, Blue Martini scaled back its operations from eight people to four but managed to maintain its offices in Sydney, Hong Kong, Singapore and Japan to support the Asia-Pacific region.

Blue Martini’s sales manager in Australia, Mark Hampshire, said scaling back was not a major issue for its operations.

“Unlike other vendors, Blue Martini started with a lean team so downsizing was not disruptive to the business. We continue to provide first-level support to our customers out of our Sydney office," he said.

Admitting the company has seen tough times, Hampshire said business is definitely on an upturn.

“Over the past couple of years we did not see much demand in the general market, but this is definitely changing. Blue Martini is getting unsolicited enquiries and our prospect base is strong," he said.

And the drivers of these changing conditions? Hampshire said companies are seeking to optimise their supply chain and said its alliances are helping to drive business.

"Our alliance with Accenture and Fujitsu is still going strong; most success is coming from retail, telecommunications and manufacturing," he said. Metcash Trading Ltd Australasia a leading wholesaler of grocery, liquor and tobacco purchased Blue Martini in 2001.

However, Metcash executive IT assistant Brooke Walters said the project was "binned" years ago.

Meta Group’s technology research and services vice president John Brand said customers should take some responsibility for getting caught up in the hype of the late 1990s buying products and finding themselves dealing with the dotcom crash aftermath.

"Although traditionally a sceptical market, Australian-based companies were caught up in the hype of the UK and US," Brand said.

"Rather than evaluating solutions that best suited their business requirements, companies went with vendors who were most successful overseas. This did not necessarily match their local business requirements.”

Brand blames over-optimistic vendors, clients and independent solutions providers for building a market beyond the demand.

He said there are still plenty of clients looking to the research firm to provide assistance with the level of support they are receiving from vendors.

"We liaise with the US and UK on their behalf; one of our clients has logged problems that are more than 12 months old," Brand said.

"We are now assisting it in gaining resolution to these issues.”

Other companies are still renewing support and maintenance contracts directly with vendors.

“Vendors are putting the squeeze on their clients for annual maintenance renewals. As opportunities for new sales revenues dries up, vendors become more reliant on support and maintenance dollars," Brand said.

"Companies rely heavily on these vendors and are often reluctant to let go of these support agreements."

Out in the cold?

Are you stuck with a product that has few local resources and little support? Let us know and we will contact the relevant companies to find out what their regional plans are, and get details of future product roadmaps that directly affect you. E-mail Sandra_Rossi@idg.com.au

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