One bite at a time — Exporter Magazine

Fast becoming a big fish swimming in the world’s global markets, Mako Networks is a Kiwi exporter that has demonstrated extraordinary focus and patience. And it’s paying off.If you’re looking for further proof that New Zealand’s exporters punch way above their weight – then you need look no further than Mako Networks.This cloud-based network management and security company specialising in card fraud risk reduction competes directly with some of the world’s largest companies in the technology industry, which have enormous capital reserves at their disposal. Mako’s competitors in the global pond had massive head starts in building reputation and profile with customers. Gaining mindshare while working against such large-scale marketing machines has proved to be one of the biggest challenges for this relative newcomer.“Fortunately, we have the technological strength of our solution to rely upon to convince potential customers of the value in our solution,” says Mako Networks CEO Bill Farmer. “We also have a unique PCI DSS Level 1 certification, which many competitors simply cannot attain due to the way their systems are designed.”Not surprisingly, it’s Mako’s technology that’s clinching the deals all over the world. So how did this amazing technology come about?Mako Networks was founded in 2000 by Chris Massam and Simon Gamble, two former Xtra employees who saw an opportunity to help businesses manage their security and firewalls back when businesses were just starting to transition off dial-up and onto broadband.The system they created with the help of a third partner, Dennis Monks, allowed for many devices to independently seek and connect with a central management system located elsewhere on the Internet. This technology is still the basis for the Mako System as it operates today, and is protected by patents in six countries.In 2003 Bill Farmer joined Mako Networks as CEO, and remains responsible for the company and its global operations today.“Mako is fortunate to have developed a patented technology that allows it to be rapidly and infinitely scalable, while still affording a high degree of security, all using the public Internet,” explains Farmer. “Under our system, Mako endpoints deployed around the world ‘phone home’ to a Central Management System (CMS) every two minutes to exchange information and receive updates. This way, no matter where a device is located, it knows to report in about the current status of its network and Internet connection, report any issues, and check to see if there are any configuration or software updates to apply.“Mako units can be sent to customers pre-configured, and as soon as they connect to the Internet they can communicate with the CMS.”Mako is the only network management company in the world that connects customers directly to the Internet with a PCI DSS certification. The company is certified annually as a Level 1 service provider – the highest security clearance attainable for protecting credit card data.“While other companies may claim to be PCI compliant, Mako is the only solution on the market today that possesses such a comprehensive end-to-end certification,” says Farmer.

Soft landings

Mako elected to utilise the Kiwi Landing Pad (KLP) for its 2012 launch into North America.The KLP is extremely helpful in satisfying some of the visa requirements for companies entering the US, explains Farmer. “For example, US law requires that you maintain a place of business in the US for six months before being granted a work visa; however, you’re not permitted to actually conduct any business during this time. The KLP allowed us to rent office space that satisfied these requirements, without having to pay US market rates for a space that went unused.”Mako was also keen to work alongside other Kiwi companies that had already made the transition into the US.“The KLP team has been exceptionally helpful, not only in providing a suitable working environment, but also with candid advice, sharing contacts in the Silicon Valley and San Francisco area, and with networking and social activities.”Closer to home, the Australian market is a significant opportunity for growth, with its need for anti-fraud countermeasures. The country has been particularly hard-hit by credit card fraud incidents in recent times. An agreement with Australia-based IP Solutions International (IPSI) to bring Mako’s unique credit card security solutions across the Tasman demonstrates how well the Kiwi company is positioned to solve a growing problem for businesses worldwide.Mako’s system is designed specifically for SMBs and what are classified as ‘Level 4’ merchants: those that process less than one million card transactions per year. These merchants represent the vast majority of businesses in Australasia. Mako’s solution will be sold in Australia by IPSI as ‘merchantsecure’, and will stop most types of card fraud in its tracks at card-present merchant locations – that is, where a card is physically swiped through a terminal.

Export lessons

The move into the North American market hasn’t been without its lessons. One of the most powerful is the length of the sales cycle, which can vary dramatically between countries.“In New Zealand we have a strong customer base and a fairly short sales cycle. But in the US, despite the many similarities in the market, the sales cycle is at least four times longer,” explains Farmer. “That’s a combination of the business climate, where companies are much larger than in New Zealand; the larger number of stakeholders needed to authorize any contracts; and the scope of the deals Mako is involved in. Where a large deployment in New Zealand might be 1,000 customer locations, in the US it’s 10,000. Deals that size require larger, more in-depth field trials, laboratory testing, and occasionally complex discussions with our partners.“The most valuable lessons therefore have been patience and appropriate resourcing. Just because a deal is taking much longer to close does not necessarily reflect a lack of enthusiasm for your solution,” says Farmer.Mako has had “exceptional support” from NZTE and the Ministry of Business, Innovation and Employment. “Along our journey, we’ve also received direct support in the form of a $4.2 million R&D funding grant, as well as valuable business counsel and support in market entries,” says Farmer. “In particular, NZTE in Singapore and the Philippines were instrumental in assisting with our market research and evaluation, and making the proper business contacts within the local IT community.” 

Way forward

For now, Mako’s most immediate focus is capitalising on the many opportunities it faces. Over the past year its sales pipeline has increased tenfold. “We must execute on that pipeline,” says Farmer. “Around the world, Mako has been establishing partnerships with many organisations keen to employ our unique technology to help fight the growing threat of credit card fraud.“With our unique technology and PCI DSS certification, we are particularly well suited to make a dent in the problem.”

Mako’s milestones

• 2000 – Mako Networks founded.• 2003 – Mako creates its first proprietary network appliance: the Mako 1030.• 2003 – First commercial deployment of the modern Mako System.• 2005 – The Ministry of Health begins a comprehensive overhaul of its IT systems, commencing the Connected Health initiative to securely link health care providers and patient records in a central repository. It selects the Mako System as the primary connection method.• 2005 – Telecom adopts the Mako System for use as its SecureME service.• 2010 – Mako Networks becomes the first network management company in the world to meet the Payment Card Industry Data SecurityStandards (PCI DSS).

• 2012 – Mako opens US office in San Francisco.

Publishing Information

Magazine Issue 

Exporter Magazine May/June 2013 issue 28