NZ’s most embarrassing tech disasters, Part 1

Do not adjust your spellcheck.

Tech does so much to boost our nation. But when it goes wrong … oh, boy. In part one of a two-part series the Herald is recapping some of NZ’s biggest misfires (read Part 2 here).

Ferrit

Telecom’s Ferrit was born in 2005 and put down, some $30 million later, in 2009. Along the way, there were so many questions about this virtual shopping mall, including: Why could you look at products on its website, but not buy an item? Why misspell “ferret”? They were never answered.

Telecom’s XT launch

Telecom enlisted Top Gear star Richard Hammond to promote its new 3G network, dubbed XT, launched in May 2009. But then it fell over. Four times. The new network had been launched too quickly and was undercooked. One of many low points saw Telecom staff hand out sim cards for rival 2degrees at Canterbury DHB. Some $10 million was paid in compensation to customers. The Hammond campaign, and the XT branding, were dropped. By June 2010, Telecom shares had fallen 25 per cent to an all-time low. An apology advertisement, which featured chief executive Paul Reynolds talking to camera while fly-fishing at a remote stream, somehow failed to mollify customers. The only winner was Hammond, who played it for laughs in his live shows.

Get your motor running.

Novopay

In 2005, then Education Minister Trevor Mallard signed off on a decision to ditch the incumbent teacher payroll provider, Wellington-based Datacom, in favour of two flashy Australian entrepreneurs who had created a firm called Talent2. But their new-fangled system, Novopay - or Novopain, as teachers would come to call it - failed to pay thousands of teachers, and overpaid others, despite costing $110m, or $45m over budget and two years late when it finally arrived in 2012. Many IT upgrade projects blow out, but few so publicly (some 60,000 teachers and 40,000 contractors were in uproar nearly every payday). Novopay was finally expelled from schools in 2014 after its maker, Talent2, reached a $22m settlement with Steven Joyce who, in a career lowlight, was wresting with the mess as Minister for Novopay. A Crown-owned firm, Education Payroll, took over - initially grappling with tech licensed from Talent2, then ultimately releasing its own product, EdPay. It became a literal case study (at Victoria University) in poor procurement, poor communication, poor training, and Cabinet being bedazzled by an offshore firm. Nothing was learned on that latter point.

Wheedle

It was never going to be easy to take on Trade Me head-to-head, even with the backing of a rich-lister in the form of a Mainfreight co-founder (the late Neil Graham). But on just its second day of trading, in October 2012, blogger Ben Gracewood tweeted instructions on how to change the details of another member’s auction - including the reserve price. Wheedle closed the security hole, but its reputation was shot, even if it stumbled on until mid-2014. Eventually, a Kiwi would find a way to be a thorn in Trade Me’s side - but that person would be ex-pat Bowen Pan, the driving force behind Facebook Marketplace.

Do not adjust your Chromecast.

2019 Rugby World Cup: NZ vs South Africa

It was a game of two halves: The first exclusive to Spark Sport, the second free-to-air on TVNZ after the telco threw in the towel. Spark calculated it would take just months to force march an army of old-school couch potatoes into the brave new world of streaming - at a time when many had yet to buy their first smart TV, and sub-par broadband meant streaming just wasn’t an option for a big chunk of rural NZ. It was wrong.

Many were annoyed, to put it mildly, before the first ball was kicked in the 2019 Rugby World Cup. Spark limited the political and brand fall-out by making most games available free, or free-to-air via TVNZ. That left the All Blacks pool game vs South Africa as its money maker. But during the first 45 minutes, there were increasing yelps on social media about pixelation or cut-outs for some 132,000 who were trying to stream. At halftime, Spark decided to flip the switch on its disaster contingency plan and make the rest of the match free-to-air on ye olde broadcast TV.

Those who had shelled out $89.99 for a tournament pass were unimpressed. Spark trying to pass the buck and blame international streaming partners (who war-gamed this thing?) didn’t help. Spark Sport actually developed into a very stable, user-friendly platform, but from that NZ-South Africa game onwards, analysts considered - quite correctly, it turned out - that it was a dead man walking. The reputational risk of dodgy streaming during crunch moments, and the political peril of using exclusive All Blacks or Black Caps content as a loss leader to upsell people to better broadband plans, just wasn’t worth the relatively small payoff for a $9.4 billion company.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.