Call it the Xero effect if you like. A tech boom is underway in New Zealand. The start-up scene has been active since Rod Drury and Xero showed it is possible to take on the world with a locally developed product. The NBR frets that we could even be seeing a bubble. Whatever the effect on the investment sector, the wave of new companies is attracting overseas attention. This week, Amazon Web Services is in town promoting itself as the first port of call for startups wanting hosting and other cloud services.
Last month AWS boosted its new company offer with the launch of AWS Activate. It is a bundle of services for startups providing training, user support, a community forum and credits for services. At least some services are free for qualifying startups.
Underlining the new push, AWS country manager Ed Lenta reminded journalists at a media briefing that tech start-ups were among the company’s first customers when it began selling cloud services in 2006. Now he has the wave of new technology companies coming out of New Zealand in his sights.
Computing on a tight budget
Lenta’s sales pitch is straightforward. Start-ups have few funds and there are better ways of spending the money they can raise than buying expensive capital equipment like servers. In fact, he says today’s venture capital investors are unlikely to open their cheque books if start-ups propose to buy technology infrastructure.
Illustrating this point Robert Coup, co-founder of Auckland-based Koordinates, says there was no money when his company started in 2007. “We needed to scale our costs when we started. Then we found it easy to grow organically”. Earlier this year Koordinates moved its entire infrastructure to AWS’s Sydney-based operation.
Lenta’s presentation included a veiled dig at the opposition: “We’ve had feedback from startups that says they want flexibility to run the best apps, frameworks, operating systems and tools”.
Most of AWS’ competitors have little visibility in New Zealand. The clear exception is Microsoft with its Azure cloud. The software giant also chases startups with its BizSpark programme.
AWS means equal footing
Lenta says AWS puts the smallest startups on an equal footing with large corporations using cloud services. He says: “They have access to the same services, the same levels of security as large customers. We make no differentiation between customers”.
Another selling point is that AWS can give New Zealand startups a global footprint. This last point was picked up by IceHouse CEO Andy Hamilton who says early access to global markets is particularly important for New Zealand startups. It can also help disguise the fact a product or service is delivered from a company in small country far from the biggest markets.
Hamilton says another feature of AWS making it attractive to New Zealand companies is that it gives companies here better access to tech talent in other countries.