FOLLOWING a deal worth more than $1 million with Vale in Brazil, Brisbane software company Oniqua Enterprise Analytics can now call the world’s three largest mining companies its customers.
The arrangement to supply Oniqua’s spare parts inventory management software adds Vale to a long list of clients in the mining, oil and gas industries, including BHP Billiton, Rio Tinto, ConocoPhillips, BP and Anglo Coal.
CEO Andy Hill (pictured), says the deal is significant because it cements Oniqua’s position with the world’s top multinationals, while bringing greater access to the Brazilian market.
I think for us it’s a really significant deal for a number of reasons. Firstly because Vale is a high profile organisation in Brazil and we have the opportunity to grow there, but secondly, for us it’s nice that we have the first, second and third biggest mining companies in the world,” says the Oniqua co-founder.
“It’s also important because Vale is an Oracle user so it’s good that this shows our analytics can be complementary to that system.”
Hill says exporting is of paramount importance to the company as it makes more than half its revenues abroad, in deals ranging from hundreds of thousands to several millions of dollars.
“We have two models of arrangements. The first is that we sell the licence upfront and that’s quite a large deal, or we act as a service provider with a monthly fee,” he says.
“With Vale we took some of their data and analysed it for them to quantify the benefits we could deliver, and after the analysis they went ahead and purchased the licence from us.
“Vale may have hundreds of millions of dollars in funds tied up in inventory but at the same time, if they’re missing a spare part the downtime in terms of cost can be $100,000 per day, so what we provide is an intelligent analysis of the balance of cost against risk for these asset intensive organisations.”
Hill expects turnover of around $10 million for this year as the company celebrates its 20th anniversary, with growth expected in FY11.
“Typically we do around four large deals a year and a number of smaller deals,” he says.
The company has offices in Brisbane, Melbourne, Johannesburg and Denver, as well as a partner in Bali, but Hill doesn’t plan to open up an office in Rio de Janeiro even if it is ‘tempting’.
“For countries like Brazil it’s important to have partners who understand the local culture, who have the relationships and can help on the language side,” he says.
“The focus this year will be to increase the level of annuity streams through smaller contracts.
“In 2009 we had actually very high margins which were driven by large enterprise deals, which came in to drive a lot of profits, but we have large sales cycles.
“What we’re doing this year is setting up our business so that our fixed costs are covered by predictable revenue streams.”
Like many Brisbane-based exporters Hill is concerned about the high $AUD, but for different reasons as the company prices in $USD and produces its product in Australia.
“When we opened up our US operations in 2002 the dollar was between 55 and 60 cents, but now it’s close to parity – before we were getting about AUD$2 for every US$1,” he says.
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