For a bunch of farmers we Cantabrians do pretty well at the software game. Locally- made software is successful all over the world, supporting everyone from bakers in Australia to librarians in Ethopia. The recently released "Canterbury Software Export Survey" estimates the industry turns over more than $180 million per year, and is particularly strong in areas such as financial services, health management, computer security, global positioning systems, online search and wireless communications. Not bad for an industry built on the passion and smart ideas of a few large, and many small, businesses. With more focus on marketing, it could rival farming as the region's economic driver.
Our farming heritage has probably contributed to our success in creating clever software. That heritage has helped mould a culture that is practical and self-reliant. Add to that the courage to do things differently which is a product of our isolation, and you have the ingredients for producing great software. Rather than simply accepting that all the best intellectual property emanates from Silicon Valley, we have been willing to create our own 'Silicon Paddock'.
This same farming heritage is also our achilles heel as we look to expand the export base of our software industry. Wellington-based producer boards traditionally marketed our products. The skills needed to identify and develop markets have tended to reside in the north, while we've concentrated on producing. That has changed slowly over the last 20 years, but we are still left with the legacy.
This legacy is reflected in the findings of the Canterbury Software Export Survey, commissioned by Canterbury Software Incorporated. It shows we have lots of great companies, with lots of ideas and products, but with some way to go in marketing their offerings overseas. Findings from local software firms included:
While 90% are interested in exporting, only 60% actually do
60% didn't have a well defined export strategy
92% had little or no idea how to approach promotions in export markets
30% have done little research on target markets, for example 37% of those exporting to the US knew little about their competitors
The report concluded that the local industry could achieve much more if it could "... enhance management and marketing capability to match our technical prowess."
The survey results support the conclusion that the local software industry's marketing capability needs to improve to achieve greater export success. For example, it makes sense that companies would have little idea around the promotional task when they don't have a defined exporting strategy. If you don't have a "go to market" strategy then how can you decide what to communicate to whom?
Several companies in the survey cite tradeshow help as a key. Tradeshows should be a planned method of completing a defined communication task, but too often companies simply go to them with the hope of randomly finding interested customers. The real key is having a clear picture of the best market for your product, and then determining if a particular tradeshow is the most effect use of time and money to increase awareness of your product in that market.
Another example of the importance of market understanding is channels: resellers, distributors and partners. Companies want help in this area but many don't have a good idea of how to approach and exploit a distribution channel. To do this you need to really understand your market - your direct and indirect competitors, the value chain (how each company in the chain between producer and consumer realises value) for your market.
So how can our software exporters improve their marketing? It is about developing and implementing a 'go-to-market' process. Similar to the process software creators use to design, develop and test their product, it is a series of defined steps that help companies understand and then approach their markets. It is not about creating a brilliant product and throwing it at the market - it's a planned and sustained development process. It is from this foundation that our software exporters can build a solid marketing programme. Not simply with fancy branding, clever trade shows or brand name partners.
The survey points strongly to the need to look at the fundamental issues rather than just fix the symptoms of our export problems - promotions, export channels etc. To borrow an analogy from another successful Canterbury sector, rugby, it's about sticking to the basics. Just like our beloved Crusaders can't win without the forwards building a strong foundation, our software exporters can't score big in export markets without developing a deeper understanding of their markets.