PLAYING THE IP GAME REAPS REWARDS

Written on the 16 April 2012

PLAYING THE IP GAME REAPS REWARDS

ONE of the city’s top software engineers is on a mission.

Technology One CEO Adrian Di Marco (pictured) vows to change Australia’s undervaluing of research and development (R&D), intellectual property (IP) and services-based companies.

He finds overseas markets have a greater appreciation that unique software IP can generate big profits.

“There is huge demand for enterprise software to improve efficiencies and take advantage of mobile devices, the internet and Facebook,” he says.

“There is huge growth potential in the future but we keep battling to make people recognise us in Australia.”

The company has produced positive results, successfully luring more clients away from competitors Oracle, SAP and Microsoft.

“We are getting a lot of traction and recognition. A lot of people we serve have replaced their Oracle software with ours,” says Di Marco.

“It comes down to making sure you have the right products and deliver the right service around those products. We act responsibly to our customers and have not had too many concerns about IP protection in the enterprise software space.”

Technology One reported a net profit after tax of $20.3 million, up 14 per cent in the first-half of the 2012 financial year. Revenue increased 15 per cent to $156.7 million and doubled once in every four years for the past 25 years, according to Di Marco.

“Licence fees have grown 15 per cent in the long-term with fiscal 2011 being onaverage,” says Di Marco.

Technology One increased its R&D expenditure by 18 per cent to $31.8 million, representing one-fifth of overall FY11 revenue. Di Marco reveals that 15 per cent of R&D expenditure is dedicated to smart mobile technology.

“Apple has shipped 4 million macs, 8 million iPads and 16 million iPhones worldwide – totalling 28 million smart devices. People want to do more and more with these devices, so they are the next growth area,” he says.

“We think Fortitude Valley is a great location and has potential to be the heart of R&D for the whole Asia Pacific region. More broadly, Brisbane has great universities and lifestyle offerings.”

The company has no debt, but suffered a $1.5 million loss in the United Kingdom and $3.2 million loss from the New Solutions group.

“The ongoing European debt crisis has made it very difficult for the UK business whose clients are running tight ships and not investing in enterprise software,” says Di Marco.

“New Solutions will still take 4-5 years to become profitable. A lot of money has to be spent on understanding how to preconfigure software to meet out-of-the-box and vertical market needs.”

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TOP PUBLICLY LISTED COMPANY
32.
Technology One
(TNE)
CEO: Adrian Di Marco
Market Cap: $323m
Revenue ’11: $156.7m
Profit ’11: $20.3m
Staff: 900 (500 in Brisbane)
Established: 1987
Listed: 1999


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