Peace looks to Australia and US for R&D move

Tony Engberg. Picture / Fotopress

Utility billing specialist Peace Software will lose its mantle as the country's largest software development shop when it moves some of its research and development overseas.

Staff were told last week the company intended to open development centres in Australia and the United States within the next two months.

Auckland-based staff were invited to apply for the positions.

R&D vice-president Tony Engberg said the Auckland development centre would continue to employ about 100 people to maintain the core Peace product and work on the next generation.

"We want to put research and development teams into markets where we see innovation emerging and where we can involve sets of customers," Engberg said.

He said Peace was taking a contrarian position when the trend was to move development to low-wage countries such as India and China.

"There is no sustainable competitive advantage any more other than staying ahead of the curve," Engberg said.

"By going into the markets with the customers, developing the stuff with small groups of very good engineers, albeit more expensive, our bet is we will come up with more innovation and more market-leading products than if we did it the other way."

The 12 to 14 developers in Australia will initially work on modules for network billing and "type 5" metering. The Australian Government is encouraging the shift to type 5 meters, which allow utilities to bill at different rates at different times of the day.

The United States team, which is likely to be based near Silicon Valley, in the Denver area or around Boston, will work on a separate credit and collection module. Engberg said the price of good engineers in the United States was significantly lower than during the dotcom boom.

Peace might also open a development centre in Europe later in the year, if it wins a major customer there.

At the peak of building its product, Peace employed 250 developers in Auckland and at customer sites in North America and Australia.

It made 27 people redundant a year ago in the face of a sales slowdown across the industry.

Engberg said since then developer numbers had declined to 150 because of a hiring freeze, but productivity had doubled because of the adoption of the extreme programming methodology and new development tools.

"When people left, we didn't backfill because productivity was increasing and we were waiting for the market to turn around," he said.

During the year, four customers went live with new Peace systems and a new product version was released.

Peace 8.0 pulled together the different customisations and features created for different clients. In future, all customers will be on the same code base, reducing the amount of work needed to maintain the product.

Engberg said about 30 developers would work on a service-oriented architecture for the Peace product.

That meant breaking each process into a self-contained chunk, so changes made to one part of the code would not require extensive rewriting and testing of other parts of the code. "I'm trying to get some of our best people back from the States so they can start work on that," he said.