Dynamic Export

Australian software companies are punching above their weight when it comes to exporting the programs used to run a digital world. Here’s how you can join in.

Exports from the software industry are as broad as the sea of binary behind the programs being sold. Advances in technology and globalisation go hand-in-hand, making software one of the industries most suited to export.

New Exporters
Most software businesses are small, the majority with less than five employees, according to Austrade, which means it may be difficult to obtain enough financial and human resources. “It is a significant business development activity and they should plan and set aside budget and time accordingly,” says Peter Harrison, Austrade’s national manager for ICT.

He warns that market development involves extensive communication. “It’s not just about how good your technology is, it’s the company and the people behind the product and how they are willing to engage and support and communicate,” he says. “After a trade show, it’s ‘how quickly does that company get back in contact?’ Follow up is not given enough attention. If you get business cards at a trade show, in the next few days you should send an email.”

An example where the customer-first concept works is Pronto Software, which was pulled overseas by Australian clients with international links. “If you do a good job with an Australian company and they are a business that has operations elsewhere, either subsidiaries or they are a subsidiary from overseas, success can breed further success,” says managing director David Jackman. “Use the initial organic growth to give you the credibility in the market to start to grow.”

Existing Exporters
For those already exporting, different methods of selling may be of interest. Licensing, arranging permission for others to use your software, is one common way to earn revenue on intellectual property without selling the entire IP, but businesses should first identify whether customers will agree to buy licences. If you decide to license, you must set an agreement in writing on which rights are being licensed and aim to license as few rights as possible for maximum return.

Choosing the right distribution model is another area where exporters can boost sales. The internet has been perfect for overseas sales, as exporters no longer need to ensure production capacity. Connie Pandos, co-founder and CEO of the ADWEB Agency, says they reinvented themselves from a web consultancy to develop communication tool Intranet DASHBOARD (iD) as a standalone piece of online software, to sell more.

“We wanted a product that stood on its own, something that wasn’t directly related to people time,” she explains. “The internet is absolutely core to our success. We have the perfect product for exporting on the internet because the whole transaction occurs electronically: people find us, view a demonstration, take a product tour, trial the software and buy it all online.”

Advanced Exporters
Once you’ve established credibility in the market, it’s easier to expand into new and existing markets, says Harrison. “Invariably, customers want to know who you already deal with. If a well-known company uses your software, they are more willing to explore a business relationship.”

He suggests exporters leverage existing relationships by asking customers if they know other businesses that might be interested in your product. He also says to consider collaborating with other Australian companies. Networking through trade shows, missions and industry associations can assist with developing connections.

“Because the Australian ICT market is so small, it’s unusual for companies to compete in exactly the same space. The strength of working with other Australian companies, collaborating, creating a larger solution, is not leveraged enough,” he says. “Often as much business is done between members of our missions as is done in the market they’ve gone to.”

Thriving exporters should consider stepping up their marketing. As an online business, Pandos says they need to ensure their website delivers leads. ADWEB’s marketing strategy for the iD product is search engine optimisation, as well as online advertising through Yahoo! and Google Adwords.

A sophisticated understanding of web traffic will help manage online campaigns. Pandos’ observation from the global financial meltdown was the difference between US and UK traffic in late 2008. “We have a product that delivers cost efficiencies: US sales were ‘glass half full’ with traffic and leads coming through to the end of the year, but in the UK it was ‘glass half empty’ with a noticeable drop in traffic. There’s a cultural relationship between that traffic,” she remarks.

Got something to say? Join the export forum here at DynamicExport.com.au.