NZ software success story ends with redundancies

By PETER GRIFFIN

The major shareholders of Marshal Software may have pocketed millions from its sale to United States-based NetIQ, but 18 months on Marshal's staff are facing redundancy.

NetIQ has decided to shut down the Auckland software development lab it picked up in the acquisition of web and mail security software maker Marshal, which Net IQ paid $45 million for in December 2002.

About 25 staff are likely to lose their jobs as development moves to Houston, Texas, effectively severing New Zealand's link to one of the most successful software companies it has grown in recent years.

It is likely Marshal products will continue to be distributed by Tech Pacific here.

Net IQ's vice-president for human resources, Terry Dyckman, was last night breaking the bad news to the development team.

He said the closure would be effective from June 30 and that "certain individuals" might be offered jobs with NetIQ.

"When the acquisition first happened we really, absolutely thought we could maintain development in Auckland. But strategies change," said Dyckman.

The Auckland development centre was opened with much fanfare in mid-2001 by Prime Minister Helen Clark and Manukau Mayor Sir Barry Curtis.

Marshal had failed to excite local venture capitalists but eventually found itself courting interest from US heavyweights.

At the time of the sale, NetIQ's New Zealand managing director and former Marshal shareholder, John Skeates, said the company would "bend over backwards to look after [staff]".

Skeates said the deal would help both Marshal and New Zealand to attract more top developers.

Green MP and IT spokesman, Nandor Tanczos, said the closure showed the reality that business decisions organised in the US would always have fallout for foreign-owned New Zealand companies.

The closure also showed that "a reliance on offshore investment, as opposed to export sales, may not always be in our long-term best interest."

Tanczos also noted trade media claims that NetIQ's revenue dipped 20 per cent in the second quarter, largely due to the changing terms of a licensing agreement with Microsoft.