Learn NetStar's secret to success

Ian Yates: Oliver, tell me, what's the big deal with NetStar's way of operating? There's something to do with selling network management remotely. You know, we all know about software as a service, but you're selling management remotely.

Oliver Descouderes: Correct, yes. So we, I guess, got into software as a service before it became the kind of trendy topic it's become. NetStar is a systems integrator and also a managed services provider and about eight/nine years ago we first started selling Cisco products and services and we started building a network management capability to go along with the products and we started building that really back then on a software service model where we build infrastructure in our North Ryde head office and deliver the network management services across a web-based platform to our customers.

IY: I'm pretty sure that not everybody's heard about that, although you must have had some success because the company's doing pretty well.

OD: Yes. I think - I'm sure everyone's heard of organisations like salesforce.com and Oracle on Demand are a couple of the kind of favourites of the software as a service space. There's no-one else I can think of that's really delivering networking management to the enterprise market using a similar model. When you think about it, it makes a lot of sense.

IY: And the fact that you're using network management software remotely, doesn't affect you, I suppose? You'd think it might, but then again once upon a time we would have thought that remote CRM wouldn't work, but it seems to work fine.

OD: It does, yeah. I mean obviously it requires a link back to its customer, which can be, you know, a VPN or a dedicated link, but really it makes a lot of sense in terms of cutting out a lot of the complexity. A lot of management systems fail because it can be a three to six months or even longer, implementation cycle, and there's a lot of complexity involved in building a network management system at an enterprise level. So what we've tried to do is simplify that, take all the technology away from each individual customer and build it into a centralised facility.

IY: So they're basically then just presented with a working console which can see all the management agents? They're now just staring at the console, which could be anywhere. looking into their network?

OD: Absolutely right. So in most cases you're taking away the agents, you're taking away all the on-site servers and all the software and what we're really doing is saying to them 'You can log in from anywhere in the world using any kind of standard browser and look at your network and how it's operating in real-time'.

IY: And primarily you say your company had an expertise in Cisco, so do you mostly focus on giving them a look at their Cisco kit, or can they have any kit they like?

OD: That's a very interesting question. So I guess there's two ways to answer that. The monitoring platform itself is based on, for those who are more technical, probably most people are more technical than me, there's an SNMP-based monitoring platform, so we monitor pretty much anything out there, whether it's Nortel, Cisco, Alcatel, whatever it might be - as a Cisco focussed SI integrator our people skills are all around Cisco. So we're really focussed on monitoring the major Cisco networks as a full service, but we can provide a monitoring platform, like, say, OpenView to pretty much any vendor out there.

IY: So I guess if your client was using Nortel or something like that, they've probably got their own support expertise to do that, but that doesn't mean they couldn't use your remote management software to watch all those boxes and see what's going on.

OD: Absolutely right. So we've got some - I hesitate to mention this word given that we're a Cisco partner, but we have a joint venture with China Telecom in China where they've replicated our software as a service model within China and they're using that to monitor predominantly Huawei equipment which, as I mentioned, is not a nice word around these parts.

IY: Of course, that's the new cut price networking vendor from China.

OD: Correct, yes.

IY: Who are having significant inroads in some major accounts, but, of course, yes, we all know Cisco's much, much better.

OD: Absolutely right. That's correct, but in China, we're very capable of monitoring that. Obviously we've got no skills in Huawei, but China Telecom has then taken their skill sets using IT technology to provide that service. So it's quite adaptable from that perspective.

IY: I should just get a bit of a background here for readers. Is this software that your company has written, or have you just adapted an existing popular network management portal?

OD: It's pretty much what we've written, so it's all NetStar IP. It's a combination of software based on Microsoft .Net that we've written combined with specific open source monitoring tools that we've integrated into that framework. So there's probably about a million lines of code-plus that we've written. The developer's given up counting. It's been eight years of development, so there's a lot of IP that holds it together, but we do look at the best of open source to do specific management monitoring tasks. But we don't want to rewrite for no reason.

Three or four years ago I would have answered the question a bit differently and said 'Oh, yeah, we use different commercial applications'. We found that very few of them are designed to work in what we call a multi-tenant service provider environment, so the commercial software is great to manage an enterprise...certainly I'm not suggesting enterprise software is not up to scratch, but when it comes to managing 100-plus enterprises from the one management centre and doing in a way that's replicable or scaleable, off-the-shelf software just isn't designed for that.

IY: So basically the stuff that's off the shelf is going to fit fine if you're just going to run a partiuclar enterprise and control your own network, but what you want to do is to be able to have anybody hook in, fire it up, connect up and you need it to be really flexible, so that's why you had to do your own coding?

OD: Yes, spot-on, yes. To be able to scale to where we've done and hopefully a lot beyond where we are now, we've got to have a way we could add 100 more customers with everyone looking at the same screen and not going 'Oh, no, we need six heads and six monitors to be able to manage all this'.

IY: Now that you've done that big contract there with the Chinese guys, are you looking at doing similar things overseas because I imagine what you're doing there, they're not just buying a hook into your code, they've got a copy of the code and they've licensed it and they're doing their own thing, aren't they?

OD: Yeah, as scary as it sounds, selling a licence to China, that's correct.

IY: Well, at least you got paid for the first copy.

OD: Yeah, but not much. So we've got a number of different models. With China Telecom it's a kind of first model where we've basically licensed effectively. It's a revenue sharing agreement where they've built their own facility. We also work with organisations like SingTel out of Singapore and PCCW out of Hong Kong where they re-brand our service, but still really deliver it through NetStar, but it looks like, and feels like other applications at, say, SingTel.

IY: Okay, but it's still your back end?

OD: Correct. There are two different models. To be honest, we're really exploring that kind of market, coming from an enterprise background, we're really exploring what's the most effective for us and increasing our market share. Obviously there are a lot of different partnership models that are all feasible.

IY: It may well be that your own company wouldn't be able to handle small business clients very well because of where you come from and what your expertise is, but you may find a channel partner out there who is a small business network management whiz-kid who'd love to be able to flog your thing as their own with the back end.

OD: Yeah, that's a great example because SME has huge growth and we'd love to tap into it, but we're just not designed, at least at the moment, to be able to service lots of small organisations. You know, the product itself can do it. So you can definitely get someone who says 'Look, I've got a thousand small customers. My sales model's geared for that. How can I take your software and build in for a managed service?' Definitely.

IY: What else is NetStar doing in the network management? I mean, you do on-site stuff as well as this remote, software as a service management, I presume.

OD: Yeah correct. So our history is as a systems integrator. I guess convergent, unified communications, IP telephony, whatever words Cisco's given it this quarter, is really where we're seeing a huge amount of interesting growth and there's a lot of new products in that space that always keeps us busy. So probably security then unified communication is second for NetStar growth areas in terms of technology.

IY: Beyond your network management skills?

OD: Correct, yeah, but they also drive - I guess once you start selling the product, we need to be able to manage it, provide relevance to the customer managing it, so the security in particular has seen a huge amount of change and, I guess, the increasing maturity of that market means that as new products come out and new technologies come out in the security space, we need to also adapt and develop new technologies to monitor and manage those. So there's been a lot of thought and investment in how do we improve or how do we get the right security and voice over IP management capabilities to market. It's not enough any more to say 'Yeah, we can see if your gadget has gone down'. It's all about the application being delivered as a service, 'My call's dropped out. Why's it happened? I have got a million alerts on my screen - Can you tell me what's going on?' So the bar keeps getting set higher and higher I guess but using new technology.

IY: Now for anybody who really thinks that this is a good idea that NetStar's onto, is your company privately held or can they rush out and buy shares on the stock market?

OD: Unfortunately, no, they can't rush out to buy shares yet. We don't quite know what's happening. We're primarily owned by private equity, Allen & Buckeridge and Berry Private Equity are our major shareholders, and so depending on how the market goes and how many of your readers go out there and buy our products, whether we're a private sale or an IPO listing at some point in the future is yet tobe determined.

IY: Okay. So everybody else is trying to get themselves on the radar of the private equity funds, but NetStar went the other way around; they started that way.

OD: Correct, yeah. They've been on the rollercoaster ride for - you know, for the private equity fund with N