The Melbourne-based company believes the time is now ripe for a concerted crack at the American market on the back of the hefty drop in the value of the Australian dollar, and its price-led contract win just several months ago with US social media news portal AllDay.
Base2Services CEO and co-founder Arthur Marinis says the cheaper Australian dollar (30% drop) played a part in the decision by AllDay – the company’s first American customer - to contract it to assist with transition of its business to the cloud.
“With AllDay, they were impressed with what we offered but it was hard to prove our value beforehand because they were our first US customer. So, the low Australian dollar helped in winning them over. The price there automatically drops. The US pays about 30% less because of the exchange rate,” explains Marinis.
AllDay needed help expanding the scope of its cloud infrastructure, as well as creating a more effective way to automate application processes, and Marinis says the base2Services automation streamlines deployments, to sustain the high levels of follower engagement.
According to Marinis, a more robust cloud presence allows the “exciting young media outlet” to more effectively deliver timely news from social media influencers to their readers and, he says, base2 will help AllDay achieve massive growth while preserving customer experience.
"AllDay was proficient with the AWS platform and they were doing lots of things right already. They came to us to position themselves for further growth."
As Marinis says, the AllDay DevOps contract is a big breakthrough for the company in its first significant foray into the US market with its DevOps as a Service offerings leveraging their AWS partnership. But, clearly it’s just the beginning and Marinis and the team at the Melbourne-based company have lofty goals for more success in the world’s most competitive IT marketplace.
Work is already underway on the business plan to take a well-considered, strategic approach to the market at a time when the Australian dollar gives base2 a price advantage over local US competitors.
In putting that plan together, base2 has taken advantage of modest but useful financial support available through the Victorian Government’s Business Victoria for companies looking to expand into new markets, and has also solicited the services of its accounting firm, Crowe Horwath.
And, it’s already been decided that base2 will go after and target funded startups in the US. “We will really focus on those companies quite heavily,” Marinis says.
“Culturally it (US market) fits, especially in IT, and the fact is that they also use a lot more shared services than we do here, so we believe it’s going to be a natural fit.”
Marinis is confident of breaking into the US market in a substantial way in the first 12-months and beyond. “We certainly now have a price advantage which when you combine nine years cloud experience means we can deliver more at a lower price point. The lower price on its own is not enough for a start up”.
Marinis explained “these businesses know we are working with their business. They need to go fast and the best way to do that is to build a team that goes fast, at the best price. The business is the real important part, price is still secondary.”
“For these businesses having base2 as part of the team in start-ups and using automation to accelerate deployments is about slashing the time to market more than cost cutting”
“We expect at least 10 new customers in the 2015 financial year and post that we expect a significant ramp up and would expect to have secured 20 customers by the end of the 2016 financial year.”
Buoyed by the price advantage afforded by the lower Australian dollar, and confidence in base2’s devops and cloud transition offerings, Marinis says, “I believe the startups targeted will be a logical reach for us.”
The upcoming entry into the US market is a far cry from 2005 when the domestic Australian market was base2’s sole focus as a leading DevOps early adopter.
And, while Cloud Transition was the main service provided by base2 in those early days, there was a shift to a big focus on DevOps in 2010, and “we have invested heavily in DevOps as a Service R&D and been working on that ever since,” says Marinis.
Cloud transition still remains a big part, but devops as a Service is a core part of the package of services. “Cloud ops come as part of our devops. We don’t do it separately and customers who don’t fit the devops model we tend to advise them to look somewhere else,” Marinis explains.
The move to establish a presence in the US market is seen by Marinis as a strategic one and comes off the back of recent solid growth in the Australian market.
“The third quarter of last financial year was huge. Very busy and securing a lot of deals,” Marinis says.
“The fourth was a lot slower but towards the end of the quarter there was quite a bit more activity so we are expecting a lot of growth this financial year.
“Last year (2015 FY) our business grew by 100% and we expect it to grow by 200% this year (2016FY). There’s a lot more activity from the enterprise businesses at the top end of the market, and we are seeing a lot more adoption in the mid-tier market too.”
So, with the winds of success in the Australian market in its sails, the cheaper Aussie dollar giving it a competitive price advantage, and the AllDay contract wrapped up, base2Services now turns its focus to the US market and targeting of cost-conscious but well-funded startups.