Traditional phones are dying a thousand deaths and Vadacom is helping to bury them further with its technology

The office phones are dying a thousand deaths, heading for the graveyards big time. Even call centres with its hundreds of round-the-clock workers can run completely without the traditional brick-and-mortar phone sets sitting on desks. And one little Kiwi company is carving quite a nice slice of the telephony market, vowing the bigs boys who aren't usually its target market.

Vadacom has cemented a comfy position in this big shift towards the “phoneless” age – sending voice over the internet or mobile technology. The Takapuna-based Vadacom's technology is used in some 300 New Zealand companies. Its clients include Xero, Colmar Brunton, Glidepath and the Controller and Auditor-General.

The jewel in Vadacom’s crown at the moment is its Buddy™ technology. Buddy is a cloud-based PBX (system for line switching) system which enables companies deploying this technology to chuck out their desk phones completely if they choose to. 

Vadacom is a neat little technology development company founded by techy Igor Portugal and Scott Keon. The former is a scientist, the latter a PBX sales person with 16 years of PBX industry experience. Portugal has also previously co-founded Asterisk Ltd, New Zealand's first Linux specialist company, which has been sold to Gen-i.

Along came Aaron Ridgway who has successfully developed a few companies, one being a cloud-based call centre company Datasquirt which he has sold in 2011 to a California-based call operator company, LiveOps, for US$12.5 million. Prior to that, Ridgway led Datasquirt’s initial public offer on the Australian Stock Exchange in 2007, raising $10m, to fund its global expansion. In 2011, Datasquirt won Best Call Centre Technology in the UK.

Ridgway also founded and grew New Zealand’s independently-owned Vodafone mobile dealership, First Mobile Takapuna. He was awarded the New Zealand Young Entrepreneur award in 2007.

It is a case of Ridgway spotting an exciting piece of technology, adding strategy, vision and cash to a small company with a proven technology that has had steady growth over the years.

The nine-year old Vadacom had been chugging along, growing through the traditional sales channels, until current CEO Ridgway, invested in the company together with his business partner Lindsay Phillips.

The company is also a Callaghan Fund recipient. It currently spends about 35% of its revenue on research and development.

Ridgway is looking to help Vadacom double or even triple the growth it has achieved over the last nine years with plans for future funding. In the immediate term, based on the recent $1 million investments injected into Vadacom, he is confident a compounded 50-100% year-on-year growth is within reach.

Aaron Ridgway: "We are able to offer Rolls Royce solutions for Toyota Corolla prices."

The company has 14 employees, about 10 of them developers but numbers are “growing by the week”, Ridgway says.

It is about to sign on a major user in the New Zealand market, and working on its first European client. Europe is not on its strategic target market list at the moment, but there has been a few enquiries from telcos keen to resell Vadacom’s technology to their clients.

“We keep getting enquiries from the UK and Europe because people can’t find anything in the market quite like ours,” he says.

Vadacom also has a great headstart against bigger global competitors in the technology as it has been working on developing and deploying its cloud-based technology way longer than most of its large competitors.

What’s more, Vadacom’s telephony system has the distinct quality of being cost efficient for small- and medium-sized businesses with between 5 and 500 users. The ironic thing is big companies want to use the company’s technology as well.

An example is Xero, which has been using the company’s system to scale up its telephone system as it grows.

Ridgway says: “We have taken the most important developments in telephony technology and upgraded it to deliver it as one seamless technology. It is the best of its breed – companies using our technology enjoy all the PBX functions without the need for a desk phone, so there is no need for capital expenditure for physical phones.”

Legacy technology

Growth of ultra fast broadband is a huge catalyst for companies shifting to cloud-based telephony systems. “Lots of businesses in New Zealand are still using legacy technologies. The shift from legacy PBX to cloud-based system is just beginning. There is still so much in the market that is yet to be ripped out and replaced,” Ridgway says.

Using Vadacom’s Buddy technology staff can see who’s available and transfer calls from their mobile, tablet or desktop. Its technology enables various features to be deployed to mobile phones, on iPhone or Android-based systems. What this means is, a call centre person might not need to be glued behind a phone head-set, answering calls but can manage using a mobile  phone.

It is a solution perfect for smaller businesses who don’t have huge budgets to deploying costly telephony solutions, Ridgway says. This is especially so for smaller call centre operators trying to appeal to bigger corporations.

A Rolls Royce for Toyota price?

“We are able to offer Rolls Royce solutions for Toyota Corolla prices. Bigger companies are willing to pay, to take the risks of adapting our solutions.”

Competitors find it harder to be nimble like Vadacom. “Big companies (operating in the same space) can’t scale back for medium-sized companies. There is a huge market still for elegant solutions, such as ours. Competitors are still basically offering basic solutions,” he says.

The company’s technology has caught the idea of CIO Review which has shortlisted the company’s contact centre technology to be the top 50 globally.

Ridgway has strategic plans for Vadacom and plans to at some stage hop over to the US to secure further funding to extend Vadacom’s growth. It is difficult, he says, to raise money from New Zealand - the small market makes it a relatively expensive place to raise capital. "If you go to the US or UK, there are more people, with more money, and they do know us and like us."

But first, the immediate aim is to grow Vadacom’s revenue to the $10 million to $20m range, before aiming higher.

He prefers to take measured steps. “It is a case of spoon feeding the baby first before chucking a buffet at it. It is all about us delivering a measurable performance, on a bite-size chunk of money,” he says.