Profile of Successful Australian SMEs Date: September 2002 Prepared By: Australian Information Industry Association Table of Contents 1 Overview ...........................................................................................................................................2 2 Market Segmentation........................................................................................................................3 2.1 Industry Sector .......................................................................................................................3 2.2 Vertical End Markets ..............................................................................................................3 3 Revenue............................................................................................................................................4 3.1 Revenue Growth.....................................................................................................................4 4 Employee Profile...............................................................................................................................5 5 Location by State ..............................................................................................................................5 6 Age of Organisation ..........................................................................................................................6 7 Activity Outside of Australia ..............................................................................................................7 7.1 Main Regions of Activity .........................................................................................................7 8 Government Grant Recipients ..........................................................................................................8 9 Research & Development Activity ....................................................................................................8 10 List on the Australian Stock Exchange .............................................................................................9 10.1 Date of Listing.........................................................................................................................9 Appendix A – List of Awards...........................................................................................................10 Appendix B – List of Companies.....................................................................................................11 Profile of Successful Companies 1 Executive Summary This activity was undertaken to: Present a profile of successful Australian ICT companies; Determine the common critical success factors; and Identify potential market opportunities for the industry. The report demonstrates that successful ICT companies exist across a wide range of industry segments. The common success factors were: Access to overseas markets throughout the United States, Europe and the Asia Pacific regions; and Investment in research and development Geographical clusters were identified in: 1.1 Northern Sydney Corridor which runs from Ryde to North Sydney, and Inner Sydney, which saw companies, concentrated but not limited to the Australian Technology Park. About the Report The list of companies was compiled from recent industry and government awards. To be included in the profile companies had to meet the following criteria: The company must be considered a technology company The parent company must be owned and headquartered in Australia or had its origins in Australia. The company’s revenue must exceed $1million and must be in business for a minimum of one year. Page 2 Profile of Successful Companies 2 Market Segmentation 2.1 Industry Sector The companies were segreated into Software (38%), Communications (22.5%), Hardware (23.5%), and Multimedia (16%). All industry segmentations include services. Industry Segmentation Hardware Software Multimedia Communications Page 3 i ti es & Te le Tr a G ns p o o co v m er r t Sm F i m u nm al n e l- M an nic nt c i a a ti M e ed d l S on s R iu ia , E e ta m E e r v nt il nt ic e er an er s ta p in d W ris m e en hol s e M He t & sal T an e a u f l th o u r ac i & s P r tu M m of r in ed es g i s i & c al on FM Ag al r ic Se C G ul rv tu re E d ic e & s E n uc a v i r ti o on n m e D nt ef T e C enc c h ons e no um lo gy er /I C M T in in g ti l 2.2 U Profile of Successful Companies Vertical End Markets 50 45 40 35 30 25 Companies 20 15 10 5 0 Page 4 Profile of Successful Companies 3 Revenue The greatest number of company’s at 43.5% were located in the $5-20 million revenue bracket. This was followed by 31% of company’s which were placed in the $1-5 million bracket and 21% of company’s which were placed in the $20-100 million bracket. Only 4.5% of companies recorded over $100 million in annual revenue. Revenue Over $100m $20-100m $1-5million $5-20m 3.1 Revenue growth during ‘most recent period’ The revenue growth profile showed that 9% of companies experienced less than 10% growth, 10.5% of companies between 11-50%, 21% of companies between 51-100%, 28.5% of companies over 100%. We were unable to identify the revenue growth for 15.5% of companies. Revenue Growth Less than 10% Not stated 11-50% Over 100% 51-100% Page 5 Profile of Successful Companies 4 Employee Profile The under 25 employee bracket attracted the largest percentage of company’s at 42%. This was followed closely by the 25-100 bracket which represented 39% of companies. At the higher end of the employee profile 10% of companies were located in the 100250 bracket and 9% in the over 250 bracket. Employee Profile Over 250 100-250 Under 25 25-100 5 Location by state All states and territories were represented in the location of company headquarters. NSW lead the states with 34% and was followed closely by Victoria, which represented 27%. South Australia (9.5%), Western Australia (9.5%), Australian Capital Territory (9%) and Queensland (8.5%) represented similar numbers whilst Tasmania attracted 2% and Northern Territory 0.5%. Location by State QLD NT TAS ACT NSW SA WA VIC Page 6 Profile of Successful Companies Location by postcode A postcode is a four digit number used by Australia Post to assist with mail delivery. As it is readily available on the end of each postal address, many researchers and businesses use postcode as a make shift geographic region for aggregation and analysis of address based data. As outlined in the graph below the main geographical clusters were identified in Northern Sydney, Inner Sydney, Inner Melbourne, ACT and Inner Brisbane. 40 35 30 25 20 Companies 15 10 5 or th er n In S In ne yd ne r ne O r M Syd y th e n er lb ey M ou el rn bo e ur In ne ne O r B AC th ris T er b A an O del e ut ai e d In r P e In ne ert ne r h r P O Ad erth th e R er laid eg S e Re io yd gi na ne on l N y al S W La Vic O u tor th nc ia er e Br sto is n ba D ne ar w H in ob ar t 0 N 6 Appendix B provides an explanation of the postcodes included in each regional segmentation. Page 7 Profile of Successful Companies 7 Age of Organisation Over 50% of companies were less than 10 years old. These companies were represented by 27% in the 1-5 year age bracket and 27.5% in the 6-10 year age bracket. The remaining figures stood at 16.5% in the 11-15 year age bracket, 7% in the 16-20 year age bracket and 6.5% in the over 21 year age bracket. The company’s age was not identified in 14.5% of cases. Age of Organisation Not stated 0-5 years 21+ years 16-20 years 11-15 years 8 6-10 years Activity outside of Australia 66% of companies undertook one or more of these activities outside of Australia. This activity included location of offices, which may include transfer of headquarters outside of Australia, distributors, resellers and exports. Activity outside of Australia No Yes Page 8 Profile of Successful Companies 8.1 Main regions of activity outside of Australia The majority of companies (73%) undertook activity in more than one region. The companies that undertook activity in one region (27%) did so in the Asia Pacific or United States. The regions of activiety included Asia-Pacific (73%), US (70%), Rest of Europe (54%), UK (44%) and Other (14%). Regions of Activity Other US Rest of Europe UK Asia Pacific 9 Government Grant Recipient 39.5% of companies accessed a Government grant. Government Grant Recipient Yes No Page 9 Profile of Successful Companies 10 Research and Development The majority of companies 81% were currently undertaking research and development. Research & Development No Yes 11 Listed on the Australian Stock Exchange 30% of companies were listed on the Australia Stock Exchange. Listed on the ASX Yes No Page 10 Profile of Successful Companies 11.1 Year of Listing The majority of companies that have listed on the stock exchange did so in the last 10 years. The figures show that 30% listed between 2000-2002, 35% between 1998-1999 and 22% between1990-1998. Prior to 1990 13% of companies had listed. Year of Listing Prior to 1990 2000-2002 1990-1998 1998-1999 Page 11 Profile of Successful Companies Appendix A – List of Awards AIIA used a number of sources for identifying these successful companies including: ACT Chief Minister’s Export Awards AIIA, iAwards AIMIA Industry Awards Asia Pacific ICT Awards ASX-listed ICT sector companies (above $5m in capital value) Austrade/ACCI, Australian Export Awards (AEA) Australian Technology Park – Success Stories Business Review Weekly Fast 100 Business SA Export Awards Deloitte Technology Fast 50 Program Reveals, May 2002 COMET Recipients, 1999-2001 Consensus Software Awards, 2002 Employers’ Chamber of Commerce and Industry (VECCI) & Victorian Government Venture Ericsson Innovation Awards Capital Access Program (VCAP) Governor of Victoria Export Awards PriceWaterhouseCoopers Australian Technology Awards, 2000-2001 Queensland Innovation Start-Up Scheme Grant Recipients Institute of Engineers, ICT innovation Internet World Invest Australia, Secrets of IT Competition Winners for 2002 Invest Australia Success Stories The Northern Territory Export Awards Office of Western Sydney, IT Awards R&D Start Grant Recipients 1999-2001 Telstra Small Business Awards The Premier’s NSW Exporter of the Year Awards The Premier of Queensland’s Export Awards Tasmanian Export Awards Western Australian Industry and Export Awards Venture Capitalist portfolio’s success stories Page 12 Profile of Successful Companies Appendix B - Explanation of regional segmentation by postcodes Region Suburbs & Postcodes Included Inner Sydney region Central Business District, Australian Technology Park, Surry Hills, Pyrmont, Annandale Northern Sydney North Sydney, St Leonards, Lane Cove, Chatswood, Ryde, North Ryde. Western Sydney Parramatta, Castlehill Regional NSW Dispersed between Hunter Valley, South Coast and Southern Highlands ACT Inner Melbourne Central City 3000, South Bank, Fitzroy, Carlton, North Melbourne, South Melbourne, Richmond, Albert Park Outer Melbourne Doncaster, Hawthorn, Blackburn, Caulfield, St Kilda Regional Victoria Ballarat, Mt Eliza, Geelong Inner Brisbane Brisbane City/Spring Hill 4000, New Farm/Teneriffe 4005, Bowen Hills/Valley/Herston/Newstead 4006, Milton/Paddington/Rosalie 4064, Auchenflower/Mt Cootha/Toowong 4006, Ironside/St Lucia 4067, Highgate Hill/South Bris/West End 4101, Buranda/Dutton Park/Wooloongabba 4102 and East Bris/Kangaroo Point 4169. : Page 13 Profile of Successful Companies Appendix C - List of Companies Abuzz Technologies Pty Ltd Adacel Technologies Ltd ADIinstruments ActiveCall Pty Ltd Active Sky Pty Ltd Adaptive International Advanced Rapid Robotic Manufacturing Agricultural Reconnaissance Technologies Agrilink Holdings Pty Ltd Agsystems Pty Ltd AIMS Altium Ltd APEX Pacific Pty Ltd Aristocrat Technologies Amlink Technologies ASK Solutions ASSIST Auran Technology Autech Research Bay Technologies b-digital Beonic Corporation Biometrics Institute Bionomics Limited Bishop Steering Technology Limited Blue Fish Braintree Communications Bounty Limited Brillian Digital Entertainment Bullseye Internet Solutions CALL Direct Catalyst Interactive CDS Technologies Ltd Chaos Group Limited Cirrus Real Time Processing Systems Citect Clarity International Limited Cochlear Commtech Wireless Pty Limited ComOps Ltd Computershare Creative Digital Technology Customcall (Blueprint mgmt group) Database Consultants Australia (DCA) Datafast Telecommunications Ltd DataTrack Didasko Digital Voodoo DNS Australia DPM Consulting Earth Resource Mapping Limited eBet Limited Eclipse Computing EcoGrow Australia Pty Limited eCorp E-easy Pty. Ltd. Econsult Management Consultants EDL Australia Pty Ltd eLabtronics Emagine International Enterix (Australia) Pty Ltd Ephox ERG eServe Global Essential Computer Systems Eurofield Information Solutions EzyPay Flinders Technologies Pty Ltd Fone Zone Foursticks Future Fibre Technologies GecOz Pty Ltd Gekko Systems Pty Ltd Global Technology Australasia Limited GPS Online Limited GoConnect Ltd Gropep Limited Haliplex HarvestRoad Limited Hasen Technologies Ltd Histar Invotek Group Hitwise Pty Ltd Hunter Watertech Hypertronics Tasmania Pty Ltd Idea Data Impaq Australia Pty Ltd Infomedia Ltd Inlink Technologies Insfin Insight Software Corporation Page 14 Profile of Successful Companies Integrated Research Integrity Data Systems Pty Limited Intellect Holdings Invizage Technology Iris Australia Pty Ltd I-Site IWL Limited Kanksi Data Management Kaz Group Limited KEE Technologies Keycorp KROME Studios Lake Technology Limited Lasata International Laservision Macro-Media Pty Ltd Lincoln Indicators Linked Business Concepts Live Technologies Pty Ltd Lochard LookSmart Loyalty Magic Managesoft marketboomer Maxamine International Maxim Technology Mediaware Solutions Micro Forte Melbourne IT Limited Mincom Multiemedia Multipath Communications Limited MYOB My Virtual Accountant Pty Ltd National Telecoms Group Limited New Tel Limited ninemsn Pty Ltd Oakton Limited Objective Corporation Limited OMNIconnect Pty Limited Opcom Optiscan Imaging Limited Orbital Engine Company (Australia) Pty Ltd Parrimark Technology Pty Limited Phoneware Limited pieNetworks Limited PIVoD Technologies Limited Platypus Technology Poltech International Limited Powerlan Powerserve Pty Limited Pretzel Logic Pty Ltd Profitlink Consulting Prophecy International Protocom Development Systems Pty Ltd Proximity Pty Limited Pure Commerce Pty Ltd QSR International Quantm Pty Ltd Q-Vis Limited Ratbag Pty Ltd Recall Design Pty Ltd Redfern Polymer Technologies Retriever Communications Rich Computing RIA Terra Systems Rowland’s Underground Technology Sanford Limited Soprano Design Secure eHost SecureNet Limited Secure Systems Seek Communications Limited seeing Machines Sigtec Navigation Silex Systems Limited SkyWire (Australia) Pty Ltd SMR Electronics SMS Management & Technology Softlaw Corporation Solar Sailor Solution 6 Southern Cross Computer Systems Stallion Technologies SystemCORP Tantalus Techniche Technico Pty Ltd Technology One Tenix Datagate The Distillery The Power of Ten Think Software Timebase Pty Ltd Tower Software Torus Tower Technology Transcomsoft Uecomm Upstream Technology VeCommerce Limited Page 15 Profile of Successful Companies Vesereo Pty. Ltd. Visuale Volante Group Wavenet International Limited Wizard Information Services Xtreamlok Yambay Technologies Your Amigo 90East (Asia-Pacific) Page 16