Just as the battle between smartphone giants Apple, Samsung and Google has been played out on a global stage, a microcosm of the rivalry has played out across the balance sheet of Melbourne-based app company Outware Mobile.
Eytan Lenko, one of three directors of the company, has watched as the Cupertino company created the smartphone market, the app market then tablet market, before seeing the combination of South Korea device maker and Silicon Valley search giant become a true competitor. Lenko says one of the stories of Outware Mobile’s 2012-13 financial year, when it recorded 201 percent growth, was “the rise of Android”.
“In 2009, we were just focused on the iPhone, then the iPad came out and we got our head around that, then Android was around but no one wanted to pay for apps.”
That has since changed in a big way, and so too has Outware Mobile fortunes. Lenko says that 2012-13 “was the year where Outware started accelerating its growth”.
The company was founded in 2009 by Lenko and fellow directors Danny Gorog and Gideon Kowadlo. They’re a mixed bunch. Lenko’s background is in software engineering, Gorog brings strong business acumen and Kowadlo has a PhD in artificial intelligence.
That first year, 2009, was like the wild west for mobile software development. The iPhone had just launched and everyone was joining the app gold rush. “We realised iPhones would be the next big area of IT. Would we design our own app and try to hit the jackpot or, more like in the mining boom, could we sell the shovels to the people mining the gold?
“We decided if we could build a company supplying the companies building the apps, there would be a big demand for those services.”
The team struck a rich vein when they landed their first gig to build a Spring Racing Carnival app for the Herald Sun. It went to number four in the App Store. Outware Mobile had arrived.
The next milestone was a much bigger gig. “We won the contract to build a Foxtel app for Telstra. It was very technically advanced. We did a great job, got it out on time and that opened up Telstra to us. We were the first dedicated app developer to work with Telstra.”
Next came an AFL app. “That is where the really high growth started for Outware,” says Lenko. “Once we had the big brands behind us, it became easier and easier.
“We had the AFL app out in the market mid 2012-13, and we had the Seek app on the App Store. Together they have been downloaded more than four million times.”
He adds that while Outware doesn’t have exact visibility on Apple downloads, “that is a conservative estimate”, adding that Seek and AFL are the two biggest Australian apps.
“In 2012-13, we brought everything in-house, including user interface and visual design. We built up our own dedicated QA testing team. We now have five project managers.” Outware Mobile now employs more than 60 now employs more than 60 full-time staff, making it one of the biggest app houses in the country, if not the largest. This growth comes with challenges, and staffing is one. “It is basically impossible to find really good, experienced mobile dev,” says Lenko. “There is a lot of demand and a lot of them become contractors. But we train people up; our interview process is around finding good dev. It might take 50–100 résumés to find one.” The flipside of this skills shortage is that Outware Mobile is in competition with the major software houses and enterprise integrators to attract talent. In these battles, the lure of mobile development often wins out.
“We have a few people from Accenture. We have a lot of grads who apply to us first before anyone else. If I said, ‘You can work on the AFL app or the Seek app that will be seen by two million people, or you can go and work on some big enterprise Web Sphere integration,’ which would you prefer?”
Lenko has seen Android’s importance rise sharply. “When we did the first version of the AFL app, we didn’t have any Android capabilities. We built the iOS version and they outsourced the Android development to Russia, which built a terrible version. We are rebuilding that right now.
“In 2012, we saw the need to build up our Android capabilities. Our Android team has grown from one person in the beginning to 10 or 12.”
He says that Outware really started seeing the demand for Android in mid-2012. “This has come through in our revenues. Android is now 30 percent of our revenue and we expect that to go to 50:50.”
What of that erstwhile challenger, Microsoft? “We haven’t seen much demand for Windows Phone. We have had conversations with them,” he says, adding that it “usually only happens if Nokia or Microsoft pay the client to build an app.”
Many IT solutions providers are trying to build a footprint in the mobile space, but Lenko is worried. “I think people really underestimate how difficult it is to build a good app. All of our developers are computer scientists or software engineers. You need a very high skills base to build quality apps. If you don’t have that, if it isn’t the DNA of our your company it will be very difficult.”
Eytan Lenko, Danny Gorog, Gideon Kowadlo
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