Hewlett-Packard picks Christchurch for service centre

Auckland has lost out to Christchurch as the location of a Hewlett-Packard global application services centre that could potentially employ hundreds of people.

The decision, based on Christchurch's lower labour costs, prompted the city's mayor, Bob Parker, to declare his love of HP - "the brand, the products, the professionalism" - at the centre's official opening.

"I love the fact that you're here in my city," Parker said.

HP is not exactly a new arrival, however. By virtue of having bought personal computer maker Compaq, which in turn had bought Digital Equipment, HP can claim to have had a software development centre in Christchurch for 24 years.

The difference, said Alex Bouma, who heads the new facility, is its overseas focus. That will give it the benefit of a worldwide sales force and means it does not have to be profitable in its own right.

Termed a "near-shore" centre, the Asia-Pacific market - Australia and New Zealand in particular - will be where it looks for most of its work. Bouma said it will be touting its expertise with telecommunications and public sector applications to potential customers.

Market researcher IDC said HP can expect to exploit the lower wages of New Zealand software developers in pursuit of work in Australia.

"I'm sure that would factor in as quite favourable," said senior analyst Rasika Versleijen-Pradhan.

But finding skilled staff could be a challenge, she said. Bouma wouldn't say how many staff the centre employs but about 50 people were at work during a tour of the centre, which has space for several times that number.

"We're recruiting right now a reasonably significant number of folk and that's the first wave," Bouma said.

Canterbury Development Corporation estimates that each of those workers will add $160,000 a year to the region's GDP.