Endace

New Zealand technology company Endace has gone from start-up to US$17 million in annual sales in five years, to become a world leader in network monitoring, latency measurement and application acceleration solutions.

CEO Mike Riley says Endace’s solutions provide clients with visibility into their networks, even when under attack, constantly monitoring and capturing all the traffic that flows across the wire. Key clients include some of the largest telecom operators in the United States, Europe and Asia, government security and law enforcement agencies and financial institutions.

Since spinning out from the University of Waikato’s Science Department in 2001, Endace has emerged as a world leader in the network monitoring market. It is a burgeoning market, says Mr Riley, driven by the growing need for service level performance monitoring, financial network analysis, more rigorous regulatory compliance and government security requirements.

“Our flexibility and speed in designing new products to support increasingly high bandwidth networks has been crucial to our success,” says Mr Riley. “Our rapidly growing engineering team in Hamilton is not only keeping pace with existing customer needs, they produce intellectual property that is opening doors to future opportunities. By building this centre of excellence in network monitoring in politically neutral New Zealand, we have been able to address customers in many countries.”

Until recently Endace provided DAG cards as a key component of a network monitoring solution but over the past year it has focused on moving up the value chain to delivering the entire solution - a card, hardware and software that the client can plug in and turn on. The NinjaProbe appliance family gives the company access to a worldwide market for network and security monitoring, judged to be worth US$1 billion, ten times the size of the market for the monitoring cards alone.
Mr Riley says Endace has had a global outlook from the outset.

“We have never shirked away from going global. We’ve never been afraid to get on a plane, to hire people overseas or set up entities overseas. We’ve embraced it. Our focus since day one has been on building a positive cash flow and being a profitable business. Our approach is to create innovative products that people want to buy and sell them widely throughout our target markets to construct winning deals.”

In 2005 to raise money to fund its international expansion, Endace became the first New Zealand company to list on the London Stock Exchange’s Alternative Investment Market. Mr Riley says it has subsequently proved its value to shareholders through consistent profitability.

Endace products are sold in over 30 countries. North America is its biggest market, twice as big as Europe, which in turn is twice as big as Asia, though moving forward Mr Riley expects that geographical balance to even out.

“Our direct sales team is vital for continued growth of the company and reflects the need to get inside a customer’s business, to anticipate and build what they will require in the future.”

He says distance from its markets is a challenge the firm overcomes by treating the world as a global village.

“We have a world class product house in New Zealand, sales and marketing teams around the world that take our products to the market, manufacturing in Singapore close to the supply chain and contract manufacturing in Malaysia. It is a very scalable model that will allow us to take advantage of future opportunities.”
For those looking to emulate Endace’s success, Mr Riley advises that there’s an element of risk for any high growth, high tech start-up company, but also potentially a high return.

“The biggest risk of all is the high tech entrant who thinks he’s got a fantastic and unique product but has no idea whether or not there is a market for his product.  The streets are littered with great ideas but no market for them. Another risk is tailgating – if a competitor has a two-year lead on you, you’ll never catch up. Follow the money, not your dreams.”

To help retain its position as the market leader, Endace has spent a lot of effort this year on hiring new talent into its Auckland head office and Hamilton product development centre. It recently acquired US-based Applied Watch Technologies, a recognised developer of centralised management tools for open source software and a provider of managed security services. This brings the total number of employees worldwide to 98.

As well as the obvious financial rewards of exporting, Mr Riley says international success has opened up opportunities for staff to travel overseas and experience new cultures, and for promotion within the company.

“We work very hard to make sure all our employees understand what we are achieving and, as a world class company, what a great position we are in. Over the past year I think we’ve all become a bit prouder and a bit more bullish about where we fit into the global market.”

Contact: Libby Wilson, Manager, Group Development, Endace, phone 09 262 7620
email Libby.wilson@endace.com, www.endace.com