Industry 'sprats' find rough seas no bar to growth
Amid a sea of high-tech gloom - retrenched technology professionals facing months on the bench and vendors including IBM and Dimension Data culling local headcounts - a clutch of smaller players say the future has never looked brighter.
Lower overheads, cheaper prices and niche offerings in areas of burgeoning demand have resulted in some small players doubling and trebling in size, as their larger rivals languish.
The founder of Melbourne business intelligence and information management consultancy Infoready, Tristan Sternson, says he is having a very good year. A former Accenture consultant, he struck out in 2008 and now heads a national consultancy of 100 staff, which turns over $15 million annually.
Low overheads and high utilisation rates - staff are deployed on billable projects 90 per cent of the time - mean the business has been profitable from the start.
Infoready doubled its headcount in the past year and has recently won hefty chunks of work with Energex, IAG and QSuper; big-name clients that might once have been chary about working with small fry.
The buzz around big data has helped open doors at the top end of town, Sternson says: "Data is the new oil - so corporate resistance [to small suppliers] is less.
"We're growing in a market that's growing significantly at the same time."
Infrastructure management, security consulting and bespoke software house Kiandra IT reports a similar upswing. Founded in 1995, the firm has upped its headcount by 25 per cent in the past year and now employs 66 staff in Melbourne and Perth. Turnover for 2013 will be about $13 million.
Kiandra managing director Cameron Brookes expects 35 per cent growth in the next 18 months, on the back of recent wins with the likes of Tennis Australia, Mercer and Credit Corp.
Clients have become noticeably more willing to use smaller companies for specific projects and requirements, Brookes believes.
"As IT matures, smaller players are getting a bit more of that opportunity," he says.
It's a similar story at Brennan IT where numbers are up 25 per cent in the past year, bringing the firm's headcount to 250. Turnover for 2013 is expected to hit $70 million.
Brennan founder David Stevens says he has vacancies for an additional 20 staff, courtesy of a surge in demand for cloud and managed services.
Brennan had seen "very strong growth across product lines that are in the theme of keeping costs down and simplifying systems", Stevens says.
Alan Hansell, an analyst at Intelligent Business Research Services, believes well-managed niche firms, particularly those that are specialising in data security and cloud integration, are enjoying some time in the sun.
"They typically have a tailored approach to the client's problems, reasonable pricing and are able to accommodate changes to the project's resourcing and scope with the minimum of fuss," Hansell says.
By contrast, multinationals have found it hard to compete with the sprats on pricing and availability of skilled specialists.
"They are also often guilty of overselling themselves and relying on inflexible methodologies aimed at minimising their risks, instead of maximising client outcomes," Hansell says.