US subsidiary boosts Marshal growth

By RICHARD WOOD

Marshal Software's turnover has ballooned to $12 million in a year - up from $1 million 2 1/2 years ago.

The Auckland exporter increased revenue 33 per cent in the third quarter over the previous quarter, and racked up its 14 consecutive quarter of growth.

Marshal, which now has 55 staff, claims a customer base of 3600, representing 1.6 million users.

Its core MailMarshal and WebMarshal software filter email and web pages to block unwanted content, including both virus and offensive or resource-wasting material.

General manager John Skeates said the key to recent growth had been Marshal's US subsidiary in Atlanta. This was established early last year and now has 15 staff.

Overseas sales account for 84 per cent of the latest revenue figure.

The firm has offices in Britain and Australia but by using distributors, particularly in Europe, has made sales in 35 countries.

Skeates said Marshal had focused on exports from the start but chose to avoid the common venture capital and IPO path. The company received seed capital from parent firm Designer Technology, and has built its business out of cashflow.

Skeates said Marshal had not grown as fast as it could have but had kept control of its destiny and intellectual property.

The firm began in 1997 with sales to Designer Technologies' customer base, then to legal firms and other concerns such as local government, before targeting New Zealand's top 100 firms.

"Once we realised we had a good product for NZ we began looking for distributors offshore."

Skeates said a crucial lesson in its American move was that the US was used to being the source of technology. Because enterprise customers were looking for a vendor to deal with, Marshal needed to be there, rather than using a distributor.

"End-users, especially large ones, are looking to have support from the manufacturer in the market. We are the distributor in the US and that was a major key to our success there."

Another lesson was to not necessarily follow the models of other companies.

Marshal initially tried using the same distribution method as a packaged software product from New Zealand but found its customers needed more support.

Skeates said successful approaches in the global market had been to make the product easy to download from the internet, and to focus on engineering excellence.

"Imagine the cost of putting offices in the US," he said.

"Our whole strategy was to have a product that would speak for itself, be comprehensive and easy to use.

"The web has created an opportunity for New Zealand firms to go global."