UPDATE: A more in-depth Herald piece looking at the implications of Telecom's shift in mobile strategy and my cHerald comment piece here. The Sunday Star Times business editor Tim Hunter explains the mobile roaming revenue Telecom can expect to tap into when it has a foot in the GSM/UMTS camp.

Juha's scoop gives some interesting details of Telecom's decision to spend $300 - $400 million on a GSM/UMTS network, confirming rumours that Telecom has been looking to extricate itself from CDMA.

I blogged about it in detail my Herald blog early this morning. So far, no official confirmation of the leak from Telecom and its shares are not on a trading halt, which is unusual given a development that is so material to Telecom's business has been revealed. There'll be lots of angles to this story. For instance:
- What will it mean for the newly flush New Zealand Communications which is set to build a GSM network itself? Maybe it's a good thing as it will open up GSM roaming options.
- What about TelstrsClear? Will it exit the 029 arrangement with Vodafone in favour of some wholesale deal with Telecom?
- What about the hybrid network model Juha talks of, where CDMA is kept for high-speed data. How will this work for customers? Will they need dual-mode handsets to talk and use data? Will
EV-DO be restructed to PC data cards?
- What will Telecom do with its Hutchison 3G partnership? How will it leverage H3G services over here?

A few comments via the Herald:

From Keith:
Interesting comments about Telecom going GSM. I have been a Telecom mobile customer since 1989. I take a bit of an exception to your comment about CDMA being a bad choice. I have found call clarity and connections generally to be better with 025/027. In the early days 025/027 was far superior. Admittedly that may have changed in more recent times. Equally, my reading of the mobile data situation was that the Telecom products have offered better speed. Perhaps the only bad part of the decision is that the rest of the world went with a different standard. Had they gone CDMA then Telecom's choice would have looked inspired!

As for a better selection of handsets. So what! It may be important for geeks and fashionistas but the rest of us get by with the Telecom selection (currently I have a Treo 600). I also have a work 021, a very nice and expensive Nokia, which I like. As for the Motorola RAZR phones, my previous experience with Motorola phones and modems including cable modems is that they are hopelessly unreliable. This was confirmed very recently when the boss "upgraded" to a Motorola RAZR which managed to die just prior to his overseas trip. I wouldn't touch Motorola gear, no matter how nice it looks. I've also managed to persuade my kids to avoid it as well.

Telecom didn't really have much choice by the looks of it, but for most of us it comes down to price and service, not technology.

Of course, with number portability maybe none of it matters. Not that the networks are saying much about that. Where is it at?

From Mark:
Interesting story on Telecom NZ move to GSM. I left NZ in April 1996 and went to work in Vietnam, where GSM mobile phone connections outnumber landlines by a considerable amount. I quickly realised (as you do when you work outside NZ) that a good proportion of the rest of the world also used it, and on my first trip back six weeks later gave my 027 phone to my wife and have been a Vodafone customer ever since. Interestingly, at the same time a good friend of mine owned (and still does) a Telecom franchise in New Plymouth and had no qualms telling me that CDMA would take over the world and texting would never take off. I could never convince him at the time that I thought Telecoms was a poor choice and that the rest of the world was moving in a different direction. I now own a triband Smartphone and use it in the US, Europe, the Middle East and SE Asia, roaming all of the time on Vodafone. It even worked in Brazil!

From Olga:
Your article is interesting but to share another aspect with you, as it happens Vodafone are erecting a tower & base outside my house today. This is despite my cries to Auckland City and Vodafone to move over it over the road where there are no houses.

So possibly this explains their hard stance with me.
There are bigger more powerful reasons, e.g. Telecom using the same facilities? Who cares about the safety (traffic concerns as base box obscures road & frequencies of units etc) of people when theres more profit to be made. Maybe the next time we read the glowing reports in the business section of the papers, you can highlight that the real price is being paid by a handful of affected people sacrificed for the sake of profit. What do you think??


Here's the deal: New Zealand rolls out digital TV, claiming that being years behind the rest of the world in doing so means we'll do it better, learn from the mistakes of others.

So our Freeview consortium goes and accredits only two suppliers of satellite receivers, to the outrage of set-top box importers who want their own various boxes accredited. One of those "official" suppliers, Zinwell, then delivers dodgy, faulty set-top boxes to the New Zealand public. How exactly did boxes causing serious radio frequency interference get C-tick certified? Bizarre. This is Zinwell's business, it sells set-top boxes around the world. What's its quality control processes like if it can't handle something that basic?

Next Electronics, which acts as the service agent for the Zinwell boxes, put the below press release out last night, the first official acknowledgement from it and Zinwell that there is an issue with the Freeview receivers:

Zinwell ZMX-7500 Freeview Digital Receiver

Since the launch of Freeview on 2nd May and the retail sale of a significant number of Zinwell set-top-boxes we have had a 4.0% warranty return rate.

In introducing any new broadcasting technology into a country minor interference and or interface problems can be experienced due to varying standards of TV and audio systems’ interconnections.

Prior to the launch of the service both Zinwell and Freeview tested many units over an extended period and did not find the faults which have subsequently come to light.

These minor manufacturing defects have been investigated and will all be rectified shortly.

We are pleased to say that the experience of most installers with the Zinwell unit has been positive and they have had no problems installing them.

A new shipment of the product has arrived in NZ and will be used to replace units for customers who are experiencing any faults. This will be done on a case-by-case by basis by NEXT Electronics.

The warranty process is as follows:

    1. Warranty card in each box
    2. 12 months warranty
    3. Total replacement
    4. Contact NEXT Electronics on 0800 GO NEXT (0800 466 398)




My Herald on Sunday column (not online yet but published below)

It’s taken six years to find out, but the zookeepers at Henry Doorly Zoo in Nebraska finally know how the female hammerhead shark that was in their care managed to get pregnant on her own.

Scientists revealed last week that DNA profiling showed the shark’s baby contained no paternal DNA. That means no dad and the first recorded example of a shark reproducing on its own.

(Graphic: Phil Welch Herald on Sunday)

Such an occurrence is known as parthenogenesis, virtually translated from Greek as “virgin birth” and is reasonably common in nature. A number of species are able to reproduce without fertilization by a male. Several species of insects, bony fish, reptiles like the whiptail gecko and the Komodo dragon can reproduce asexually.

It is virtually unknown in mammals however in 2004 a team at the Tokyo University of Agriculture, were able to produce a mouse that was the daughter of two females.

Kaguya the mouse, as she became known, was created from the genetic material of two egg cells – not a male sperm in sight. Scientists have baulked at the idea of applying the method to humans. There’s no guarantee it would work anyway as Kaguya was pretty much a fluke, the only success in hundreds of delicate attempts to reconstruct eggs. But the experiment has proven valuable in researching fertility techniques for normal conception in female humans.

While parthenogenesis helps several species reproduce, it doesn’t allow for as great genetic diversity as when a male impregnates a female.

Bees are a good example of this. While the queen bee is the only bee that gives birth, replenishing the entire population of the hive, female bees will often resort to laying their own eggs if their queen happens to die. This is a “non-viable” version of parthenogenesis, because the female worker bees can only produce male “drone” bees which in turn can only mate with the queen. With no queen in the hive, the population starts to die off.

It is for this reason that confirmation of parthenogenesis in the hammer head shark has been met with dismay from some quarters. For many scientists, it’s a sign that the world shark population is adapting to meet its own population shortage, one caused by over-fishing. Female sharks may be resorting to parthenogenesis when they can’t find a mate. If more of this is to happen, the genetic diversity of sharks will be diluted, lessening the species’ ability to adapt to environmental changes.

That’s a bad thing given the importance of sharks to the marine food chain. At least now we know what got the hammerhead pregnant and can start to look at whether the same process is happening among sharks in the wild. Such research is essential. It’s the only way we can really gauge the impact on procreation the world’s environmental changes are having.



This story I wrote for the Herald this week about problems with one of the Freeview satellite receivers sparked a big email response. Interestingly, the email isn't really coming from consumers who are having problems with the new Zinwell set-top box. It is coming from people in the industry who actually want to sell and install the box but fear a backlash because they know it is faulty. Usually the tech industry covers things up until consumers get so annoyed with dodgy products that they go to the press, then you have try and extract the truth from the industry while it scrambles to fix the problem, while playing it down to the media. I like the inversion of things in this case. Take the letter below that was written by an installer to the managing director of Zinwell.

Also included is another email which claims the radio frequency interference is "just the tip of the ice berg". I'm interested in hearing the experiences of consumers who have been early into Freeview. Anyone bought the Zinwell box? Any problem encountered?

UPDATE: Sam has written to me saying:
I had your NZ Herald article pointed out to me by a friend who I'd been discussing my Zinwell set top box decoder issues with. I picked mine up from Harvey Norman a few weeks back - I think it was the weekend they became available. It picks up 3 and C4 with no issues, but I haven't been able to get 1 or 2. I went back to Harvey Norman today and they said that Freeview are going to be pushing out an update over the air in the next few days which should address some of the problems. Hopefully that'll get me (and others) working - dunno ... I'll see what happens I guess.

Dear Peter -- I write to ask if you were aware of all the problems with the Freeview
platform. As someone involved I can tell you that there have been a lot of mistakes
and the "scene" at the moment is deathly quiet.

Below is a copy of an Email I sent yest to the CEO of Zinwell Aust. They are having
major problems but the real story is that we have cracked it all -
completely - offered a solution for a cost and have had zero response. Things are
not good. Was wondering if you had any new info or would like to discuss the
problems further.

Yours sincerely .....

TO: Whaddon Selby-Adams

Dear Whaddon - I am compelled to write and ask if you have any idea of the damage
currently being done to the name "Zinwell."? Daily, we are almost beseiged by
frustrated Techs unable to get boxes to function correctly and swearing to never try
a Zinwell product again. Same goes for store managers. I understand you are
continuing with software updates but, as at 3pm, boxes were not functioning
Late this afternoon I had a call from a frustrated lawyer without 3, 4 etc. He
quoted the Fair Trading Act and wanted to know why a recall had not been announced.

This is affecting all of us in the industry and I hear comments like "Freeview is a
I fear the damage done to the Zinwell name is almost irretrievable with NEXT running
a very HOT second, but there is an immediate solution. As you know, we can tell you
precisely how to fix all known issues and I would strongly, strenuously urge you to
phone Alf and negotiate something with him. He has my total backing and support.

An immediate solution could recover lost ground handled the right way and, be done
before Hills have boxes for sale late this week.

I cannot stress how urgent all this from the view out here in the field. It is
compromising the whole initiation of the Freeview platform.

Check all the sales figures! The cheap Chinese boxes with a poor picture will take

This is a time when immediate action is needed before the Press get hold of what is
happening. Questions are being asked.

I urge you to contact Alf.

I hate writing this ---------- Yours sincerely

Dear Peter,
I read your article on the Zinwell box and I feel that you have been
hoodwinked by Freeview and Zinwell.

The problems that you have pointed out are only the tip of the iceberg.
There has been two major problems since the launch date 2nd May, and they

1. The receiver will not tune into transponder freq 12456 which is the
Canwest/National Radio carrier. Next Electronics (Zinwell Distributor) has
been telling installers, retailers and customers that it is a transmission
problem, that is a load of bunkum. Every other receiver on the market is
working fine, even on so called Old Sky dishes. There is no issue with dish
alignment as you have been lead to believe.
2. There is also a problem with picture freezing which can only be remedied
by disconnecting the power from the box for thirty seconds and they will
tell you that it is a result of the remote buttons being pushed too fast,
another load of rubbish as they will freeze up without going anywhere near
the remote. With some customers it is regularly happening every half hour or

The RF problem is one of the minor problems that are not mentioned above.
the frustrating part of it all is the denial from Next Electronics and
Zinwell. They have continued to allow these boxes to be sold knowing that
there are many problems with the box.

A full product recall is still not out of the question as I firmly believe
that they have not got any further in a result from when the problems were
discovered. They need to stop selling the boxes immediately, they are just a
very inferior product.

I am an experienced installer of many years and like others in the industry
will not attend a job where it involves a Zinwell box.

They need to take ownership of the problem and sort it out.


Evan from Auctionitis sent me the following email in response to my Webwalk column about Trade Me's lack of an API. This discussion has been going on at www.rowansimpson.com. Rowan has just left Trade Me to join on a part time basis, accounting software start-up Xero.

It won't come as any surprise at all that I would fall into the camp of those that think an API would be a useful thing for TradeMe to provide. Some thoughts that I feel are relevent to the idea follow.

The point a number of people made in various guises about providing an API for your sellers is important. Providing an API so sellers can use a tool, or tie their own software to Trademe allows them to reap the efficiency of a user interface optimised towards selling and how they want to do things and away from the standard browser interface which while ubiquitous is a terrible data entry tool. It also reduces the barrier to entry that the current labour intensive model raises for existing businesses that want to use TradeMe as a genuine alternative to their existing sales channels. An API binds these people and businesses more tightly to TradeMe.

As to the dynamic nature of the changes on TradeMe, my assessment would be that the majority of these changes are at the presentation layer rather than the data layer, although I'm open to correction on this point. Even the most basic API would be insulated from these changes in the majority of cases, as the API would bypass the presentation layer. This would probably have the neat side-effect of reducing bandwith thereby indirectly benfitting the other users,most especially the buyers - the real TradeMe audience. When data changes occur it is a simple matter of communication.

If you control the API, you also have the option to impose standards and conditions on it's use - you gain more control not less. eBay allow endorsement of third party products after a QA review - what better way to ensure the quality of what third parties do and therefore the experience of your users ?

There are also unexpected benefits that can accrue from the use of an API might, for example, in the case of Auctionitis the number of pictures stored on the Trademe servers was reduced by (in some cases) a factor of 10. In a couple of cases sellers storing 4,000 or 5,000 pictures on the TradeMe servers reduced that number to 400 or 500. This came about because we provided a mechanism to assist sellers in not having to load the same picture over and over again each time an auction was loaded. They saved bandwidth, they loaded more product, TradeMe reduced storage. It's likely that the reduction was minimal in the scheme of things, but it demonstrates what might happen.

It's pretty reasonable to look for a return on the effort, but the most obvious return would be the number of listings that established businesses could/might throw Trademe's way - especially businesses that currently DON'T sell on TradeMe. At the moment, third party tool makers are largely confined to trying to capture existing TradeMe sellers who understand the effort involved in listing items and are looking for a more efficient system. They largely accept the risk of using an unofficial interface because they are able to quantify it against the effort and expense of entering data through a browser.

Imagine if those third parties were actively recruiting businesses to sell on TradeMe - effectively a free saes force extolling the benefits of TradeMe.

Most of the technical questions are easily answered or solved; I think it's more a case of TradeMe seeing the benefits that could accrue for TradeMe and going after them.


Here's my Weekend Herald interview with Malcolm Dick, the telecoms industry veteran who founded CallPlus. Dick is a real pioneer in the local telecoms industry. His understated style has also won him a lot of respect. He's managed to beat Telecom over the head on many occasions without it coming across as grandstanding. That sort of thing was left to his estranged wife Annette Presley and was more her style. I hope Dick's WiMax plans come off because we need an alternative access provider in this country and it doesn't look like anyone has the appetite for laying fibre to the home.



UPDATE: News just through that Mike Patton has canceled his Auckland gig due to an "unforeseen scheduling conflict". What a disappointment. Tickets will be refunded but it doesn't look like Peeping Tom are going to set a new date for a gig at a later date. That's a great shame, I was looking forward to that gig. Still, Tomahawk is more my cup of tea and I like the sound of the forthcoming album Anonymous Patton talks of in the interview. I hope that band does make it down here later this year. Tour info at www.ipecac.com.

Here's my Herald interview with Mike Patton who, while best known as the former front man of Faith No More, has a massive body of music outside of the FNM sphere. He still has the best voice in rock, despite his best efforts to shred it on his Fantomas records. If you're a Faith No More fan looking to delve into Patton's other work, here's five albums that will get you started:

Mit Gas (2003) - Tomahawk: The second album from Tomahawk, Patton's hard rock/metal collaboration with Duane Denison (ex-The Jesus Lizard) John Stanier (ex-Helmet) and Kevin Rutmanis (Melvins). It's aggressive and dark but intelligent hard rock. The opening track Birdsong is unnerving. Full of Patton's cinematic mash-ups, sound effects and with some great guitar and drum work, one of his best post-FNM efforts.

California (1999) - Mr Bungle: Patton's last recording with his Mr Bungle band mates is my favourite. Every musical style imaginable is crammed onto this eclectic, innovative record, which manages to build nicely on previous Bungle efforts like Disco Volante while keeping things fresh. Patton's voice is fantastic and with song tiltes like The Airconditioned Nightmare (a tip of the hat to Henry Miller) and Retrovertigo, you can't lose.

The Director's Cut (2001) - Fantomas: Patton's take on classic movie scores from the likes of
Cape Fear, Der Golum and Rosemary's Baby. A slick, subversive collection of covers that have forever changed my impression of the original music. Henry: Portrait of a Serial Killer is spine tingling, while Twin Peaks: Fire Walk With Me is one of my favourite Patton tracks full stop. Intelligent arrangements and interpretations form start to finish.

General Patton vs. The X-ecutioners (2005) : Patton teams up with New York hip hop trio the X-ecutioners on this schizophrenic collection of war-themed songs. Sampling heavily from numerous films, Patton's hard rock meets the X-ecutioners hip hop beats with interesting results. The 22 songs are short and energetic. A departure from Patton's previous more instrument-driven work, but strangely catchy and as creative as anything he's done.

Romances (2004) - Kaada Patton: A bunch of quiet, delicate tracks featuring Patton's lyrics and soundscapes inspired by classical compositions by the likes of Chopin and Brahms. Some lovely atmospheric moments even if Romances seems stuck in one gear for the length of the album. Has shades of Sigur Ros throughout thanks to Patton's high-pitched, effeminate singing.


After all the noisy experimental albums and genre-bending collaborations, Mike Patton should know his place in the world.

That place, you’d think, would not be in the opening act slot for dinosaur rockers The Who, which Patton’s latest act Peeping Tom supported during a US tour last year.

The former Faith No More front man and his cohorts were booed off the stage at several Who gigs.

“Who listens to the Who?” asks Patton, in explanation. The cross-over audience, it seems, wasn’t there.

“I mean, when you’re opening, it never really ever works. It’s like going to war in some sense,” he says down the phone from San Francisco, where General Patton as he’s known in another musical incarnation, is trying to figure out what Peeping Tom members will accompany him on his own headline tour down under.

If the Who tie-up seems as ill-matched as Faith No More’s fraught tour with Guns and Roses in the early nineties, it also shows Patton’s unwillingness to be put in one box musically.

Peeping Tom is about as mainstream as Patton has gone since the FNM days, but the music, if more accessible than his other current projects, reflects the diverse range of collaborators on the album – hip hop star Kool Keith through to Massive Attack, rapper Razhel and hip hop producer Dan “the AutomatorNakamura among them.

“A lot of people think it should be top 40, a lot think its bullshit. I really can’t be too concerned,” says Patton.

“I’m glad anybody likes it [but] it’s nice to be thought off even in a negative way.”

A tribute to Michael Powell’s 1960 psychological thriller of the same name, Peeping Tom

is a seedy, noirish affair, as musically diverse as Faith No More’s experimental masterpiece Angel Dust.

“This is my version of pop music,” says Patton who hadn’t even met some of his Peeping Tom collaborators prior to sending them demo tracks in the mail. He simply contacted their agents or asked music industry friends to put him in touch.

That started back in 2000. Peeping Tom for years was a virtual album created by a virtual band, with Patton pulling together the samples between recording sessions and tours for his key projects, experimental group Fantomas and the electronic-tinged hard rock outfit Tomahawk.

It’s a style of music making Patton, a versatile musician and programmer, has long been comfortable with.

“It’s nothing new really. You want to work with as many people who share your vision. I don’t think it is ground breaking,” he says.

He didn’t get his dream Peeping Tom guest line-up – there’ll be another chance at that with Peeping Tom 2 which is already in the works. But the man known for breaking up his thrash metal live performances with Britney Spears and Karen Carpenter covers, again reached out to his softer musical sensibilities.

Such was the case with silky-voiced songstress Norah Jones, who took a real risk entering Patton’s musical lair, given the lyrics he penned for her Peeping Tom track.

“What makes you think you’re my only lover? The truth kinda hurts don’t it motherf**ker,” she whispers on Sucker.

The risqué lyrics have attracted much attention for the pop singer-songwriter, but the brief track is one of the less impressive on Peeping Tom, which is at its best on the electro-pop rock of Don’t Even Trip and Mojo.

The music video for the latter feature’s Patton’s friend Danny DeVito slouched in front of a TV set watching late night infomercials, one of which features Kiwi model, Rachel Hunter.

“The director pulled her in,” says Patton of Hunter’s appearance in the music video. He has no idea who she is, so I give him some background on Glenfield’s greatest export.

“Congratulations!” he shouts down the line with all the mock enthusiasm he can muster.

Where Patton’s inspiration for Peeping Tom comes from is hard to tell. He admits that musically, he lives in his own “own little universe”.

It’s a phrase he has used in several interviews. While you can interweave tracks from Patton’s now defunct side project Mr Bungle with Faith No More and Tomahawk songs to uniform effect, it’s hard to know what’s at the centre of Patton’s creative universe – and what inspires his more unusual Fantomas and solo voice projects.

“In terms of the over all concept… I take it as it comes,” is all he will say.

After numerous Peeping Tom gigs, he’s even unsure of who is listening to the album. “It’s hard to tell whether they’re meat heads or hipsters.”

If Patton was mischievously hoping to find himself in the Top 40 with Peeping Tom, which was released a full year ago, he’ll have been disappointed. It hovered around the 100 mark on the Billboard albums chart though the single Mojo briefly claimed fortieth spot on the Billboard rock chart.

Still, the album has been the biggest commercial success so far for Patton’s independent music label Ipecac, which since 1999 has developed an impressive roster of quirky and experimental artists and cut through the big label red tape for Patton’s numerous projects and collaborations.

Patton will follow up his tour down under with the release in July of Anonymous, the highly anticipated new album from Tomahawk, Patton’s collaboration with Duane Denison and John Stanier.

“The album is basically Duane’s baby. He had the idea of doing original arrangements of native American public domain material,” says Patton.

Six Litanies for Heliogabalus, a new collaboration with the prolific avant-garde instrumentalist John Zorn was released in March.

“It’s some of his best work,” says Patton, who is squeezing in two short European tours prior to bringing Peeping Tom down here. One is with experimental Austrian musician Christian Fennesz, the other Mondo Cane, features “Italian golden-era pop tunes” re-arranged by Patton with chorus singers and orchestra.

“I took them and arranged them and put them into my language,” says Patton.

Touring Peeping Tom is a logistical nightmare.

“The people involved?” Patton sighs.

“It’s very hard to guess. The band has varied every single time on tour. Everything with Peeping Tom is kind of a guessing game. It’s constantly exhilarating, but also exhausting.” Don’t expect Norah to appear.

While the musical collaborations continue at a furious pace, Patton seems as laid back and unwilling to take himself or the world too seriously as he’s ever been throughout his varied musical career.

An unedited interview with MTV filmed in 1992 during the making of Angel Dust is doing the rounds on YouTube and shows a bored looking Patton cracking jokes and eating junk food as his band mate Roddy Bottum tries to coax the right sound out of his keyboard. You wouldn’t think one of the most influential rock albums of the nineties came out of those sessions.

If he has repeatedly come across in the press as dismissive of his achievements with Faith No More, Patton says it’s because he was always uncomfortable being the focus of the media’s attention.

“The Faith No More stuff isn’t about me. It was a band. Maybe that’s where a lot of journalists got the wrong idea,” says Patton.

“You don’t just pluck a song off a tree and put vocals on it. It takes a lot of work to put this shit to life.”

While he’s showing no signs of shaking his workaholic music making habits, Patton, a 20 year resident of San Francisco, wants to keeps expanding his musical universe – but spend more time at home.

“I’m a little tired of traveling the world, jaded as that may sound.”



I've just started blogging for the Herald which is a great development as it gives me the chance to update the tech section with local content during the day without us having to rely totally on wire stories from the agencies. We really want to make the Herald Tech section a better resource for those interested in technology. The blog is aimed at a general audience - those who wouldn't really visit Geekzone, but want to keep abreast of general developments in IT and telecoms.

There's RSS available and room for comments. It's early days and the blog is sort of in soft launch as we tweak it according to the needs of readers and the people updating it every day. It's quite strange feeding blog postings into the newspaper editorial system rather than posting straight to the web as I do here. That's something I'll have to get my head around, but it's great to have that layer of editorial integrity in place.

So check it out! I'll still be updating Griffin's Gadgets regularly so keep an eye out here too...


A story I wrote in today's Herald about the Computer Society's decision not to join ICT-NZ, the body hoping to represent the IT industry. The formation of ICT-NZ has been fraught with problems and delay, but Garth Biggs, who is currently heading the organisation, says progress has been made and is likely to be launched soon.

Just as well, we need a unified voice for the IT industry since ITANZ decided to shut up shop and do nothing for its members.

It looks like ICT-NZ missed out on getting any funding in Budget 07 which means they'll have to struggle along on contributions from members and its founding partners. That will ahrdly allow them to kick things off with a bang, but maybe the Government will chip in later down the track, if it liked what it sees in ICT-NZ.



Here's my Webwalk column from the Herald about the lack of interest the NZ telco industry and politicians have expressed in Telecom's alternative plan to structurally separate its business division to avoid a more complex and intrusive form of regulation.

The main sticking point with Telecom's competitors is that the telco's proposal falls outside the scope of current legislation and would therefore require a change to legislation, which could take a year or more. If Telecom had proposed a structural separation plan a couple of years ago, we could today be looking at a separate "Netco" organisation opening for business and willing to treat Telecom the same as any other customer in the market.



My Tomorrow's World column from the Herald on Sunday about the Encyclopedia of Life project.

It's a project the great species collectors of history, from Pliny the elder to Darwin to globetrotting microbiologist Craig Venter, would well appreciate.

It's one big book that documents every known living species of plant and animal in the world, some 1.8 million species - a map of life as we know it (read on).



The revamped version of Google Analytics has gone live and the deeper level of detail it gives you when it comes to website statistics is pretty amazing.

The interface has had a decent overhaul, a mch richer look and a better layout. Most importantly, you can view sets of data you never had access to below - check out this report on the screen reolution of monitors people use to view this blog.

It's staggering detail, you'd have had to pay serious money for a suite of analysis tools like this a few years ago. Analytics also lets you set goals for your website and tracks how close you are coming to achieving them. If your goal, for instance is to get most visitors to click through to the purchase order page of your website, Analytics will track how successful you are at getting people there. A great resource and a worthy improvement on Google Analytics version one.



An interesting mix of winners in last night's NetGuide Web Awards.

The full list of winners is on Scoop. I'm glad the Herald picked up the award for best website relaunch, but it missed out in the big award to Stuff, which won best media website (probably deservedly, just) and best homepage (undeservedly so, seeing as they've hived off much of the useful stuff to Trademe).

Trademe has a smattering of wins, including not surprisingly, best trading website, and was a finalist all over the place, but lost out in the People's Choice award to Smilecity.co.nz.

Slingshot was, I think, a surprise win as best ISP. Publicaddress.net deservedly picked up best blog award and TVNZ's OnDemand video streaming service won it the best high-bandwidth website award.

Good to see GPstore.co.nz, the gaming website, picking up best retailer (Ferrit and Ascent were the finalists). GPStore is a great website and the Gameplanet site backs it up well with a good community forum.

Overall, the awards show the diversification of the NZ interweb in some categories (social networking, trading, employment), but its immaturity in others (online shopping).


I was lucky enough to yesterday sit in on a lunchtime SmartNet seminar led by motivational speaker and sports psychologist John Shackleton, a Brit who now lives in the Bombay Hills. I'm always skeptical of these sorts of motivational speeches having seen plenty of them around the world on various business trips.

But John's session was actually really good. At 52, John is a competitive swimmer and one of the five fastest swimmers in the world in his class. But it's obvious that he deeply regrets the fact he never made it as an international competitor when he was in his prime. John always seemed to come fifth, and there are never any medals for fifth. He's been trying to figure out the answers to suucess in sports, work and life ever since.

John showed a great video of a Chinese swimmer at the 2000 Sydney paralympics who had no arms, but was competing against other swimmers who had arms but other disabilities. The swimmer was leading the field but missed out on the gold medal because his competitors were able to touch the wall a fraction of a second ahead of them. They, after all, had arms, whereas the Chinese swimmer had to hit his head against the wall of the pool to finish the race.

John suggests we constantly attribute the success of leaders in their fields to natural talent.
"Natural talent is an excuse used by those of us no prepared to do what is necessary", says John.
As he points out, the armless Chinese swimmer was not gifted with natural talent, he just worked work towards his goal of winning a Paralympics medal.

Instead, says John, most successful people, like the world class swimmers "who follow the black line up and down every day for four or five hours", just work really hard to achieve their goals.

Anyway, John injected a little humour into his session when he psycho-analysed the New Zealand woman who complains that "all the decent men in New Zealand are either taken or they're gay".

I've heard this line of argument many times myself so I was interested what John would have to say. What he did say makes perfect sense. The job of the brain, argues John, is "to find the evidence to prove what you think is correct".

Therefore, if a woman believes all the good men are taken or gay, she won't see them. All she will see are the men her brain tells her are bastards. So, start out with a negative perception and that perception will only be reinforced. He got us to complete an exercise which proved his point.

The key to success, says John is to like yourself and to have good self esteem. Goals and results are irrelevant unless you start from that foundation. If you don't, you enter the downward spiral.

"When we don't like ourselves, the world seems to be against us. When the world's against us, we fail," says John.

While we're on the subject of things inspirational, consider the case of the two blind sailors who are currently circumnavigating the globe.

After becoming the first blind sailors to cross the Pacific, Scott and Pam, the American blind racing team yesterday set off for Sydney:

"On May 10, 2007 (weather permitting) we will depart New Zealand to start our 2007 cruising season. As mentioned in earlier updates, we will be sailing back to the South Pacific, then working our way northwest through Indonesia. Our current intention is to wait out the Indian Ocean cyclone season in Thailand."

A nice local element to this epic voyage is that Christchurch company Humanware is providing a braille keyboard-based communications system that will allow the pair to access speech synthesized GPS information so they can plot their course.

Here's some information on the Humanware gear the sailros are using:

VoiceNote mPower QT

The VoiceNote mPower is used onboard for navigation through speech synthesized GPS and many it also provides many organizational tasks


  • Computer style keyboard
  • Speech output only
  • One key touch access to the main menu and on line help
  • Two key touch volume, speed and pitch control
  • Weight: 0.75kgs/1.65lbs
  • Dimensions: 25cm x 15cm x 4cm/9.9” x 5.9” x 1.6”

Color PocketViewer

The PocketViewer is used onboard for reading various writing information, but it is especially useful for reading charts


Designed to be truly portable, the PocketViewer's robust design ensures the product goes wherever you do. PocketViewer's superb full color picture quality allows you to read maps, view photographs, illustrations and three dimensional objects. Its built-in writing stand adds increased flexibility making it possible for you to sign checks and write up brief meeting notes. Enhanced contrast modes (white/black or black/white) can be selected for clear and easy reading.

PocketViewer's features include:

  • Full color display
  • High contrast display modes (black/white and white/black)
  • 7x magnification range
  • Retractable writing stand
  • Built-in rechargable battery
  • Extended battery life, 2 hours continuous use
  • Reduced recharge time, 3 hours
  • Battery status indicator
  • Sleep mode
  • Compact viewing are 4" x 3"
  • Portable robust design 6.5" x 3.6" x 1.4"/166mm x 90mm x 35mm
  • Weight 0.7lbs/300 grams
  • Includes AC adaptor and carry case

The PocketViewer's portable design allows you to:

  • Look at details and price labels in shops
  • Sign checks and credit card payments
  • Choose tapes and CD's
  • Read instructions on packets, recipes and bottles
  • Check lottery results, television and radio programs
  • Browse through magazines and read books while traveling.


Here's an interview in the Herald I did with National deputy leader Bill English in which he fleshes out National's view on Government investing in broadband infrastructure. He said National was looking at the Australian Labor Party's proposal to spend up to AU$4.7 billion on a national fibre network for the country if it comes to pwoer next year. But he's skeptical of such investments, which makes it unlikely that National would support and Government buy-back of Telecom's network if it was put on the block.
National has a lot of work to do to come up with some credible policies in the area of telecoms and IT, but at least they're finally talking about the issues.

Some additional views from Bill English:

On Government subsidisation of broadband infrastructure

“There’s a growing expectation among the public that they’re going to have access to higher quality broadband. It’s obvious there are parts of the country where that’s uneconomic for investors. It’s not clear the extent of that problem.”

On the Government’s proposal for operational separation of Telecom

“It has to be done in a way that doesn’t stop the evolution of technology.”

“It should be consumer driven, not producer or investor driven.”

“Too much of the talk about broadband is driven by the people who want to sell the technology. It’s still unclear what the average household is willing to pay for broadband. The killer applications are not obvious.”

“We don’t want to see public investment competing with private investment.”

“There’s no lack of fibre in our big cities and no lack of people trying to do it another way, like electricity lines companies who have the expertise to sling fibre through their networks. They’ve got piles of cash.”

“We want to signal to those communities at the end of the network we’re not going to abandon them.”

“It shows the difficulty Government gets into when it tries to make business decisions as opposed to regulatory decisions.”

“That big issue, which has been a big issue for six or seven years, has been cleared off the table. Now the issue is whether enough people have access to this new infrastructure.”

“Telecom is signaling correctly on behalf of its shareholders that it can’t wait around.”

“The Government and its officials may not have the understanding of the dynamics of investment that’s required.”

“We don’t mind the debate about it, as long as it doesn’t drag on.”

“Lobbying has no risk, investing has huge risk.”

“What’s going to matter is whether the regulatory regime gets the balance right between risks and return, in a way that makes investment worthwhile.”

On the Government’s digital strategy:

“I think it’s a bit overblown. The basics are straightforward. How does a Government get the rules right for this market?”

“[The digital strategy is] not a replacement of dealing with those tough issues and the one before the Government now is a pretty tough one.”

On National’s low-key approach to telecoms policy.

“Sounding off about it doesn’t always earn much, particularly when the issues have got so technical. “

“We’re signaling that is has increasingly become another infrastructure issue. That means the Government is going to have to pay attention to who has got it (Telecom’s network).”

On attracting more IT multinationals to base operations here:

“We’re a bit skeptical of bolt-on and buy-in businesses. The track record is that if they can’t get good roots down, they don’t hang around.”

On the local IT industry:

“It’s a tough industry, it’s competitive, it’s risky and New Zealand capital has tended to stay away from it.”

“The problem is access to local capital. They end up sourcing so much of their capital from overseas, it’s a natural progression that their ownership goes overseas.”

“I don’t think [the IT sector] should be looking to the Government to leverage other people’s capital into their business. If you’re perceived as risky, maybe investors are right. Maybe it’s pretty risky.”

“The Government is more inclined to some strategy to fix a problem. We’re a bit more inclined to pay attention to the basics. There’s a lot of capital sitting around in New Zealand.”

“[IT entrepreneurs] would regard the current issue around Telecom as probably the most critical issue.”

On listed IT stocks:

“I don’t think there’s any doubt there’s going to be a lot more IT capital on the market. In ten years it’s going to look almost completely different.

“There’ll be more and more [IT listings] as the market adjusts to the new economy.”

On setting the regulatory framework for telecoms:

We don’t have a role in it, but we hope to after 2008.



Two web applications which I use on a regular basis have been officially revamped and relaunched - Windows Live Hotmail and Google Analytics. The first is the classic free web mail programme which, according to Microsoft has around 280 million users. The latter is a great set of free tools that let you monitor the traffic to a website, so that you can learn more about your visitors and the type of content that's proving tobe attractive.

I didn't participate in the Windows Live Mail beta, but have seen plenty of demos of the new layout which gives the online application the Outlook work over. Inline instant messaging and 2GB of storage sounds good to me. There's a good outline of the new features on ZDNet. Unfortuntely, the upgrade doesn't appear to be on offer yet for my classic Hotmail account. I presume existing Hotmail users outside the US may have to wait for the upgrade. This was certainly the case when Microsoft bumped up the storage allowance with Hotmail to 1GB - the lag between the US getting the increase and our part of the world was considerable.

Trying to upgrade through MSN I get the following message:

Sorry, but it looks like you won't be able to participate in Windows Live Hotmail at this time.
This might be because:
Your account is with one of our partners and has additional features that Windows Live Hotmail doesn’t support yet
Windows Live Hotmail isn’t available in your area at this time
You have a parentally controlled account
Your Windows Live ID indicates you're under 13

As an aside, here's an interview I did in 2002 with Sabeer "Mr Hotmail" Bhatia, the founder of Hotmail, which he sold to Microsoft and made a killing on. He's a super star in India!

The new Google Analytics interface looks much more user-friendly and sophisticated, according to the demo on the website. There's an interesting news story on its development here, where Google Analytics boss Brett Crosby reveals the thinking behind the revamp:

"Server logs have made their way from the machine room to the boardroom. Web site usage data isn't just for IT administrators; it has become critical business intelligence."

But again, some of us are going to have to wait to gain access to it. The Google Analytics FAQ reads:

Many accounts already have access to the new version. If your account does not yet have access, you won't have to wait long. Over the next several weeks, we will be migrating all existing Analytics accounts to the new Google Analytics interface. You will be notified by email once your account has been migrated. For a minimum of one month, you will have access to both the original interface and the new interface. During the migration, you should experience no interruption in service and you'll be able to see all of your data regardless of which interface you use. For a sneak peek at the new Google Analytics, take a look at the following resources:

Flash demo: http://www.google.com/analytics/media/report_tour/feature_tour.html

Features page: http://www.google.com/analytics/features.html

Google Analytics blog: http://analytics.blogspot.com

I guess it would be churlish to complain when both services are delivered to millions of people for free. I look forward to checking out both applications in detail when my accounts are upgraded.



The Convergence 07 conference was held at Te Papa museum in Wellington yesterday and explored some interesting issues, such as the state of the broadband market and the role wireless technolgies like mesh Wi-Fi and WiMax have to play in improving broadband access.

I was looking forward to the closing panel discussion featuring communications minister David Cunliffe, but was dismayed to find that he had to pull out at the last minute. What was even worse was that the event's host, Clemenger's Michael Greig tapped me at the last minute to take Cunliffe's place! I did my best to try and sound coherent, but others on the panel such as Wellington entrepreneur Rod Drury did a very good job of articulating the pressing issues. Many interesting things came out of yesterday's conference. Here are a few things that caught my interest:


- Steve Simms (former head of Reaach Wireless) could be onto a winner with his new venture Tomizone, which allows people to use their broadband connection and a wi-fi router to become a wireless hotspot reseller, delivering wireless access to neighbours, customers or visitors.

I was initially skeptical of the venture, which offers wireless access at US$3 a day of which the wireless hotspot owner receives 50 per cent of the revenue. Weekly deals are offered from the equivalent of US$15. Tomizone handles all the billing and account management for the service and accrues your cut of the revenue, which can be removed to your bank account once you've hit US$30 in revenue.

The currency is in US dollars because Simms is going global with Tomizone, which needs to gain critical mass quickly to be really effective. The more I think about it, the better Tomizone sounds as a best-efforts network based on standardised technology that offers a far cheaper alternative to current commercial hotsopt ventures. I still have plenty of questions: for instance, what liability do hotstop operators have for the content going through their connections? How will Tomizone manage the quality of its network of hotspot resellers?

Bruce Simpson at Aardvark has some interesting views on Tomizone - namely that the business model would be a hell of a lot more compelling if Tomizone's aim was to become a VoIP telephony network.

Simms responds to Bruce's comments on the Tomizone blog:

"In Bruce's article, he mentions that the real money is in Mobile VoIP using Wi-Fi as the coverage mechanism. Although in theory this will work nicely, the reality is quite a bit different when you look at the scarcity of the ubiquitous interconnected Wi-Fi network."

Who knows if the model will take off. Tomizone has Stephen Tindall's backing and D-link is onboard as a hardware partner, even shipping routers with Tomizone's firmware installed. I'll certainly be watching Tomizone's progress closely.


Alcatel Lucent's Mike Iandolo was at odds with the local proponents of Wi-Fi networks over the viability of Wi-Fi for delivering widespread network connectivity. Iandolo's argument boils down to this:
- Because Wi-Fi relies on licence-free spectrum, it's quality of service cannot be managed and the customer experience therefore cannot match those of 3G mobile broadband services.
-The mobile network is better at delivering reliable, fast wireless data services that Wi-Fi networks and that the cost differential between the technologies is not as great as one would expect.
- Wi-Fi services are only sustainable when they operate in tandem with a supporting business model eg: Starbucks offering free or cheap wi-fi to get people through the door and encourage them to linger and buy more coffee and cake.

The alternative view, as articulated by the likes of Martyn Levy at RoamAD and Steve Simms asserts that:

- Mobile broadband services are prohibitively expensive and people are willing to settle for best-efforts Wi-Fi services to receive more affordable internet connectivity.
- Wi-Fi mesh networks can be used to cover large areas effectively and reliably much more cheaply than using moble-based architectures.
- The proliferation of Wi-Fi equipment means Wi-Fi is one of the most commonly accepted standards and has been cheaply integrated into a wide range of computers, phones and consumer electronics, giving it an edge on mobile-based services.


I've just finished watching the final of 22 episodes of the US TV series Prison Break (season 2) which I've been working my way through over the last two weeks.

Prison Break is a very clever show, well constructed, an exciting premise and by and large, pretty good writing and character development. Season 1 was well paced and the claustrophic setting of the prison added to the tension.

But watching Season 2 in such a condensed period of time really showed up to me the weaknesses in the series, the repetition of similar scenes, the padding out on either side of the ad breaks, the formulaic nature of the show's construction.

Suspending a good measure of disbelief is essential to enjoying any drama, but as the pursuit of the Fox River eight drags on in Prison Break, the less convincing the cat and mouse chase becomes. In particular, the clues to the escape plan, interpreted from the tattoos covering Scofield's body are incredibly contrived and beg the question: if Scofeild was so smart after all, why didn't he just memorise the details of the post-escape plan, rather than leaving clues all over the place for FBI agent Alex Muhone to follow? I know, there'd be no story, no tension if he had, but after the fifth or sixth time Muhone points his finger at the map in triumph and rushes out of the office having broken another part of Scofield's code, exasperation sets in.

Series 2 seemed to be at its best in the early episodes as the various convicts go on the run and spread out across the country. The psychopathic Teabag character is he most intriguing of the main characters and gets the best lines and the deepest character development. Muhone is similarly well drawn and the slide of this obviously brilliant agent into murderous corruption is probably the most interesting character arc in the series, far more interesting than those of the two main characters Michael Scofield and his brother Lincoln Burrows.

Season 2 would have been better told in 13 tightly written episodes. The final episode suggests a third season will focus on several of the main characters incarcarated in Panama. There's enough there for a compelling continuation of the story but the creators would be foolish to try and pad out 22 episodes again. I'd go for 13, or 7.

It's important in TV to know when to wrap a concept up. Ricky Jervais was shrewd in limiting the runs of his TV sitcoms The Office and Extras to six or seven episodes. On the other hand, the creators of 24 have managed through good writing and pacing, to sustain a high-energy drama much longer than its high-concept premise would ever have suggested.

The writers of Lost, with such a success show on their hands, have been given the near impossible task of successfully extending the life of what was likely initially intended to be a one or two season show. Now Lost, which I've already lost interest in due to the dramatic slump of the current season, will be extended to 2009 - 2010. It should have already ended.

When I was completing my MA in screenwriting I had to write a proposal for a 13 episode TV drama. The process was incredibly difficult. A series that long requires a lot of meticulously constructed plot. In terms of local drama, few hour-long showers ever extend to more than 13 episodes. The trend in fact, is towards seven episode series which, given the dwindling attention spans of TV viewers and the other entertainment option available to them these days, is often as much of a commitment as an audience is willing to make.

Good TV drama is difficult to make, so its understandable that producers want to increase the lifespan of the shows that take off. But TV drama for the future, in my view, lies in six or seven episode series that maybe extend for three or four seasons maximum. The result would be a greater variety of shows that are ultimately more rewarding to watch.



My feature article published in The Business magazine yesterday about Rod Drury's new venture Xero, which is offering accounting services delivered via the internet ala the Salesforce.com and Peachtree models...

by Peter Griffin

In the world of the software start-up, especially one aiming squarely at the fast-changing internet, two months is a long time.

When The Business in late February visits the central Wellington office of Xero, the new venture of IT entrepreneur Rod Drury, the floor of the ornate building looks bare, too big for its tenant.

Two months later, it’s slightly crowded and there’s a sense of urgency in the air that was previously lacking.

The software geeks sit together at tables shaped into a big U. One developer has installed a car racing seat for greater comfort.

Behind Drury’s desk, above a large unused fireplace, is an inspiring photo of a space-walking astronaut hovering hundreds of kilometres above Cook Strait.

Drury has made clear his ambitions for Xero – to build a web-based accounting software service that becomes one of the key players in the market internationally.

“If you think of a business that we really can go global in, accounting delivered over the web is something we can credibly do,” he says.

The last two months have been a whirlwind of software development and personnel recruitment for Xero, which was initially funded with $1.5 million from Drury, his partner Wellington accountant Hamish Edwards and several employees.

Xero’s release has been tightly controlled with the number of customers using the system rising from 30 to 100. A wider public release is looming and Drury says the fact that Xero is internet-based has allowed the developers to constantly tweak it without disrupting early customers.

“We’re improving and re-releasing the product every couple of weeks now, listening to feedback,” says Drury, who last year sold his email storage company Aftermail to US software maker Quest for US$45 million.

The software developers were brought onboard early with Drury just recently assembling his executive team. He poached Air New Zealand chief information officer Alastair Grigg to become his chief operating officer.

Grigg says past “adventures in venture land” have prepared him for start-up life, but that his two year stint managing a 200-strong IT team at Air New Zealand has given him skills that will be needed when Xero gets bigger and goes global.

An unusual hire came in the form of Olympic triathlon gold medal winner Hamish Carter, who retired from racing in March to join Xero as relationship manager.

Anthony Bishop, formerly managing director of the local arm of software maker SAS Institute, joined last month as Xero’s head of global sales. Former National Business Review reporter Kate McLaughlin left journalism to become Xero’s marketing manager.

The Xero board has also taken shape with the addition of Trademe founder Sam Morgan, who Drury has had a close working relationship with as a member of the Trademe advisory board. Morgan is also a shareholder in Xero. Guy Haddleton, a Minnesota-based kiwi expat who sold his business planning software company Adaytum in 2002 for US$160 million, has also been recruited to the board.

“The strategy was to get to a hundred customers to validate that the software works,” says Drury.

“Now we have to build up the operational expertise.”

Then the focus will be sales, sales, sales.

Xero has not unveiled publicly any revenue targets as it is in a “quiet period” before releasing the prospectus that will seek to entice investors into its stock exchange listing planned for later this year.

Xero is subscription-based, so a sole trader can sign up to receive a two user licence for $56.20 a month. A licence for an unlimited number of users costs $112.50 a month.

Alone, the software is designed to make book keeping easier for one-man shops and it isn’t necessary that the accountant uses Xero as the data held within the system can be exported to Microsoft Excel and Adobe PDF documents.

It’s perhaps best imagined as bringing the Google philosophy to accounting – using a simple web browser to deliver simple tools that do the basics of accounting and mine your data for better quality information.

“We really bring accounting back to a small amount of work every day,” says Drury.

“We know cash flow is a daily thing. Being able to do a small amount of work each day and stop that big four hour catch up every third Sunday night is key.”

If making accounting software simpler and more flexible for the business owner is one of Xero’s goals, introducing the concept of the “virtual CFO” is another.

“It enables more people to be actively involved in doing things with the information within Xero, which means the business owner doesn’t have to do it all any more,” says Edwards, who was Afermail’s chief financial officer before the Quest acquisition.

“They can involve their book keeper or accountant to do more.”

In effect, you give your accountant, staff or external consultants log-ins to your Xero account so they can instantly see, via the internet, the financial position of your business.

But are businesses ready to open the books to that extent?

“They’re happier to open things up to their stakeholders and get them involved,” says Edwards.

The idea is also to have employees also tapping into Xero to help them better do their jobs.

“How can we get employees to do more while at the same time keeping sensitive information away from different users?” Edwards says was one of the key questions the development team asked itself when designing Xero. He claims they’ve answered it.

“That’s not a function MYOB currently provides,” he adds.

MYOB – Mind Your Own Business, is the Australian-listed king of the market for small and medium-sized business accounting software in the region. It turned over AU$182 million last year and has tens of thousands of local customers who use off the shelf packages such as the $249 MYOB BusinessBasics to manage their accounting.

It’s new managing director, Matthew Lynch, a former logistics manager for freight company UPS, says Xero is “in good company” among the numerous players competing with MYOB for a slice of the market.

MYOB’s success has been built on providing what our customers need. Offering it online is just another way of doing it,” says Lynch.

If Xero and MYOB fundamentally do the same things, the way they go about doing so is philosophically different. While Xero’s services are entirely web based, MYOB’s are centred on the software packages loaded onto its customers computers.

Asked to outline what MYOB is doing in the internet space, Lynch refers to “training and support programmes” rather than core accounting functions.

MYOB currently enjoys strong use among accountants.

“It’s an Australian product but a lot of it was written in New Zealand, particularly the general ledger product,” says Judy Knighton, a spokeswoman for the Institute of Chartered Accountants which has 29,000 members.

Quicken and BankLink are other major competitors Xero will face, says Knighton.

Xero and the institute share common ground in one key area.

“The way of the future for our members is the virtual CFO model, where it’s not just a matter of doing the books,” says Knighton.

“The bottom line for accountants, is how will [Xero] make them more efficient?”

Wellington accountant Peter Isaac, who writes a technology column for the institutes Chartered Accountants Journal, questions whether Xero really brings anything new to accounting software.

“This is a reprise of the [application service provider] fervour which peaked just before the dot com bust,” says Isaac.

“Rod is going for the SMEs and this is exactly where so much cheap and packaged software already exists.”

Businesses, says Isaac, would likely struggle with the security implications of having all their sensitive financial data held on the computer servers of an external provider.

“You would have to look at the possibility of unwanted elements infiltrating the software.”

Overall, he believes small and medium-sized businesses are reasonably well served by accounting packages but that “enterprise grade” systems for large businesses, particularly in enterprise resource planning, are still too expensive.

Isaac was keen to see what Drury’s differentiating factor would be.

“After Aftermail he may have some archiving [technique] that he intends to build in. This would be the big selling point. But again it may be countered by web security matters.”

Drury for his part says Xero grew out his frustration with accounting software packages. He believes other entrepreneurs share that frustration, which may lead them to Xero.

“We’ve built the accounting system we’ve always wanted.”