Tower refuses to offshore development
- 20 January, 2005 08:22
At the first press conference in its 20-year history, Canberra-based records management software stalwart Tower Software has vowed it will not offshore software development, despite plans to float the company in 2006 to fund offshore business development.
A fierce advocate of the home-grown software development industry, Tower currently boasts an 80 percent presence throughout federal government agencies after profitably leveraging local industry development conditions attached to the tranche of whole-of-government outsourcing contracts inked in the mid 90s.
"It really irritates me to see how much [local] software development goes to countries that are, frankly, no better than Australia [at software development in terms of quality and cost]. Tower is 100 percent Australian-owned and we have never outsourced development. Even if we did it would be on these shores. [Australia] has some of the best software developers in the world," Tower CEO Martin Harwood said.
Harwood went on to say labour price comparisons with Australia and other software development destinations were flawed because they failed to take into account the quality control and productivity of the local workforce.
He added that, while Tower's research and development costs averaged 10 to 15 percent of revenues, dollar-for-dollar productivity and quality were "ten times" better than Tower's nearest overseas competitor.
Having secured a 360,000-seat contract with the US Navy for records and content management, Harwood said Australian IT companies needed to learn to partner with multinational outsourcers if they wished to export. Local industry needs to invest time and effort into securing international standards accreditation if they wanted to be taken seriously at a global level, he added.
Asked whether Australia's Free Trade Agreement (FTA) with the US had spurred Tower's intention to solicit public capital raising, Harwood said the FTA was a help... but the developer will initially pursue European contracts.
"The US is a very parochial market. Austrade reckons the average [Australian] company that sets up in the US shuts its doors in 18 months," Harwood said.