Page 1






March 2014







Stewart Rendall





CONTENTS Domain The fifth edition of Value Proposition looks at the Defence, Safety and Security Sectors.


Selling Surveillance

We hear from three Commercialisation Australia participants, Snap Network Surveillance, iCetana and Sentient Vision Systems about their innovations in the industry


How Big Business can help Support Australian Security Innovation

Entrepreneur and IBM Smart Camp Executive Michael Stevens-Jones on the role of big business


Bang for Buck

Case Manager Nigel Hennessy shares his advice on selling to the defence industry.

Adding Value


For Those in Peril of Plunging into the Sea...


The Network Herding Sheep and Transforming Legal Services We talk to entrepreneur Stewart Rendall

Research Infrastructure


Being at the Leading Edge Drives Technology Transfer

One Atmosphere’s post-crash emergency buoyancy system

11 12

Milestone Achievements

Government Assistance


Streamlining EFT

Putting and Check on CV Fraud

We check in on Perth Company CV Check Southern Payment Systems and EFTlab Pty Ltd making a name for themselves in the electronic payment industry

DSTO’s role in defence industry innovation


The Balance of Biosecurity Protection


Unlocking Industry Opportunities


The Department of Agriculture’s role in international trade The Defence Materiel Organisation


Stitching up Simulations

About Commercialisation Australia


Comfort + Effectiveness = Compliance



ImmersaView sews up a gap in the market Workers breath easier thanks to PAFtec Australia Pty Ltd

Search for Security

Perimeter Security Industries using fibre optics to detect intruders


Using Omnipresence to Protect your People

Going Global


And... 2014 Australian Technologies Competition Open for Business A competition for our most promising innovative small businesses

15, 24 Case Manager Profiles 39 Chris Burnett, Murray Rankin, Nigel Hennessy

CriticalArc’s “external nervous system”

Partnering for Profit

Case Manager Chris Farquhar tells us of his experience in getting into the US market


Value Proposition is published by Commercialisation Australia. Contact

Commercialisation Australia Department of Industry GPO Box 9839, Canberra ACT 2601


Editor Designer

Sue Bushell Diane Wilson



THE CEO Welcome to the fifth issue of Value Proposition. In this edition our Domain focus is the Defence, Safety and Security sectors. In the 1980s ICT buyers around the world used to cite the mantra, with varying degrees of sarcasm: “No one ever got fired for buying IBM.” The implication was that no matter how innovative its competitor’s products were, or how superior the competing features and benefits, IBM, as industry leader, was the safe and hence preferred option. Start-ups with big ambitions of making their mark in the Defence and Security sectors often feel trapped in the same paradigm. Having founded two companies in this space, I can well and truly empathise! As some of the many fascinating case studies in this issue highlight, selling to the Defence and Security sectors is far more challenging, and typically takes years longer, than many start-ups would like to imagine. For instance, Sentient Vision Systems General Manager Stewart Day tells Value Proposition in this issue: “When the customers you are aiming at are largely government or Defence-driven, the process of winning contracts is very slow… The whole process is very expensive and time-consuming and managing the company cash flow remains critical whilst you wait for interest to turn into real orders.” “Australian start-ups tend to underestimate the investment they need to penetrate these markets,” iCetana CEO Gary Pennefather observes in the same article. “You need at least $5-10 million to penetrate the US security market; that is how much you are going to have to spend to get traction in the marketplace. We also need to partner, because these organisations are not going to buy from a tiny company in Perth.” The challenge for most start-ups targeting the sector is to find a way to keep afloat during the often years-long sales cycle. Getting your foot in the door, particularly in the Defence Industries, can be the toughest test of all. As our newest Case Manager Murray Rankin points out in this issue, decision makers in the sector quite rightly display an “understandable paranoia”

about the external companies and people with whom they opt to deal. Companies looking to target these markets must first find a way to get themselves heard – itself no easy task in a sector where whom you have done business with before, rather than what you are offering now, can be the primary criterion. As Rankin points out, the simple fact is that like the IT decision makers of old, Defence and Security decision-makers value innovation and price less than they value top notch security credentials and trustworthiness. Establishing such credentials, therefore, becomes the pivotal challenge. This issue also includes an article by the Defence Materiel Organisation (DMO) outlining the range of ways that DMO is working with suppliers expanding their opportunities to do business with the Australian Defence Organisation. In two insightful pieces we feature an interview with Expert Network member Stewart Rendall, a man who says running a business is in his DNA and who offers his own valuable lessons on what it takes to build a successful start-up; and then we hear from Case Manager Nigel Hennessy, a veteran with extensive experience working with, and selling to, the Defence intelligence sector, as he offers his top ten tips on how to succeed in this space. Finally, we have our regular Milestones section demonstrating the progress being made by so many of our portfolio companies and a range of other interesting case studies taking us on a journey through the ups and downs of business building in these sectors. Enjoy!

Doron Ben-Meir CEO, Commercialisation Australia



DOMAIN: Defence, Safety & Security

Selling Surveillance

taking disruptive technologies to the world Like many Australian start-ups, three Commercialisation Australia Participants with world-beating video surveillance technologies have discovered the hard way that technical superiority can only take you so far.

While their challenges differ in detail, iCetana Pty Ltd, Snap Network Surveillance Pty Ltd and Sentient Vision Systems Pty Ltd are all making their mark on the global stage. They all agree that in taking on the world, going it alone won’t always cut it; that success demands energy, passion, and commitment; and that a certain degree of luck can be a big help. They all confirm that particularly when you are vying for Defence and Government contracts, surviving the long haul to commercial success means finding ways to stay viable during painfully protracted lead times, and a willingness to partner with much bigger players. “When the customers you are aiming at are largely government or Defence-driven, the process of winning contracts is very slow,” says Sentient General Manager Stewart Day. “There are many hurdles to building support across defence primes, program offices and end users before getting your capability evaluated and written into tenders and programs. The whole process is very expensive and time-consuming and managing the company cash flow remains critical whilst you wait for interest to turn into real orders.” “Australian start-ups tend to underestimate the investment they need to penetrate these markets,” says iCetana CEO Gary Pennefather. “You need at least $5-10 million to penetrate the US security market; that is how much you are going to have to spend to get traction in the marketplace. We also need to partner, because these organisations are not going to buy from a company in Perth.


“They might spend $10 million on an installation so they need companies of a scale that can support that, so we partner with those companies that are already their trusted suppliers. And at that level, when those customers are spending they are not just buying our gear, they are buying a complete system and spending millions of dollars, so the procurement process is very slow. They want to test, do some pilots, then they want to go to tender. So it takes a while and you need partners who can stay the distance. “Internally, we tend to value our experience and technical knowledge, but in dealing with a Honeywell or a large Defence provider, you really need a superior level of passion and energy to cut through and get their attention,” says Snap Network Surveillance Managing Director Con James Kittos. “That has been one of the key lessons for the company: we had all the technical experience: all the technical know-how, but we had to find the energy reserves and the passion needed to cut through the delays that come with working with these giants.” The good news for all three is that Commercialisation Australia assistance, and the advice and networks of their Case Managers, have played a key role in setting them on the path to commercial success.


Such systems, operating in airports, transportation hubs, retail centres and major public facilities, typically comprise hundreds or even thousands of network cameras. Snap’s products make it easier to track incidents effectively from camera to camera; and to produce or share evidence from such incidents. The solution integrates hundreds of separate cameras into powerful, easily managed networks. The technology automatically learns the network relationships between all the cameras on a network, increasing the effectiveness of video pursuit and instant evidence collection, while reducing risks and delivering major cost savings.

Snap Network Surveillance Established in 2009 as a spin out from the University of Adelaide, Snap’s unique technology enhances existing commercial Video Management Systems (VMS) to improve the effectiveness and efficiency of existing or new large-scale network video surveillance installations.

Once the Snap Network Intelligence server has determined the camera relationships, the information is used within the Snap Force Multiplier user interface to provide video surveillance operators with video pursuit: a fast and effective means of tracking a target from camera to camera through a large network. Snap’s instant evidence feature can automatically produce a composite video of multi-camera action for a target of interest, representing a step change in the efficiency of an important task that is currently a time-consuming and inaccurate process. Together, the increased effectiveness of video pursuit and the increased efficiency of instant evidence collection deliver the customer both risk reduction and cost savings worth multiple hundreds of thousands of dollars per year. “It took many man-years of development in the University to come up with this technology,” Kittos says, “and of course, they came up with the algorithms – the technology that identifies the overlaps – but not a solution. Our company was born to spin out the technology in 2008. “We spent several years translating the core technology into something that was useful to an end user, and then once we had the concept we applied for the grant to prove this concept and to appoint a CEO. We wouldn’t be here today without Commercialisation Australia; of that I have no doubt at all,” Kittos says. With the help of Commercialisation Australia, Snap has been working with Honeywell – a major provider of video surveillance solutions around the world – to commercialise the technology into the Honeywell environment.

Snap’s Commercialisation Australia Proof of Concept project helped achieve the product and business process integration needed to integrate Snap’s core software into Honeywell’s Digital Video Manager (DVM) system, and to bring that integrated product to market. Snap recognises that in the video surveillance space, collaboration with integrators, distributors and technology partners is currently the primary path to market. As a $38 billion global provider of integrated technology solutions, Honeywell fits this bill perfectly. “Honeywell released their version of the security surveillance software which supports our platform in August, and we’re currently working with two high profile Honeywell clients who are piloting the application,” Kittos says. While the project to integrate with DVM had been highly successful, Kittos says the Snap team initially had no idea how challenging partnering with a major multinational could be for a small Australian start-up. “We didn’t realise how hard it is to herd an elephant. So you know you pick an elephant as your first strategic partner, and by Golly, you become very subservient to them pretty quickly. “To meet the challenge we worked hard to get good executive sponsorships in Honeywell so that we had at least a couple of key executives there flying our flag; and that has worked very well.” Kittos says with the entire process taking so long, one key challenge the firm has faced is managing the expectations of its investors. “I could write a book about managing investors and managing expectations, but the key there is transparency: you can’t spin a story to investors. You have to bring them along on the journey with you. What they don’t like is surprises, or being misled or being encouraged to think that progress has gone further than it actually has. And I think we have done that well, because our investors have come along the journey with us, and continue to support us, and continue to add equity into the company.”

For more information go to www.snapsurveillance.com



iCetana A spinout of the Institute for Multisensor Processing & Content Analysis (IMPCA) at Curtin University in Perth, Western Australia, iCetana has developed a video analytics application that detects anomalous events in CCTV video surveillance systems.

The software is based on a patented technique that can process highly complex movement behaviours such as those seen in public spaces. It automatically learns the normal motion patterns of people, vehicles and objects in a scene by monitoring the video feed of that scene over a period of time and building up a mapped out profile. Once the system learns what is normal it then issues alerts on events that are unexpected or abnormal. In urban surveillance environments it can detect fights, road violations, trespassing and crimes including robbery and vandalism which traditional analytics systems have either been unable to detect or have only been able to detect after substantial programming. “A lot of people in the security video analytics field have been trying to identify objects that are in a camera view, and most of them have gone about it the same way,” Pennefather says. “Our guys, who are right up there in terms of world research, came up with a superior solution.” Having completed a successful Early Stage Commercialisation project with Commercialisation Australia, iCetana has been installed at customer sites in Australia, India, Europe, North and Central America. The company has achieved this through partnerships

Sentient Vision Systems Port Melbournebased Sentient Vision Systems is commercialising Kestrel Maritime, the first software solution to automatically detect small objects such as people and small boats in the water.

Processing real time electro-optical (EO) and infrared (IR) full motion video from manned and unmanned aircraft, the software automatically alerts operators to objects of interest, and thus assists them in maritime Intelligence, Surveillance and Reconnaissance (ISR) missions, including Search and Rescue. Kestrel Maritime evolved from Sentient’s Kestrel Land MTI, a software solution that automatically detects movement on the ground by analysing real time airborne full motion video. The maritime solution requires different computer vision processing algorithms to the land solution, to allow it to detect objects in the sea. Day says Sentient developed Kestrel Maritime to a demonstrator level before seeking assistance from Commercialisation Australia to take the technology through a Proof of Concept with real world customers, and to make it ready for market. “The maritime problem is quite different to the land problem.” Day says, “On land you are looking for small moving targets against terrain that is not changing whereas with maritime, because the surface that you’re looking at is continually moving, you are looking for small objects that are exceptions to that environment.


with leading global video management system vendors. It now has prize reference sites and case studies at two Australian Universities, a major metropolitan market place, a state owned public transport authority, and a major shopping mall in the Middle East. The company has so far taken in around $2.5 million in capital from investors, to add to the $890,000 it received from Commercialisation Australia. “One of the important strategic things we did was to partner with some of the major players in the industry; we didn’t just go out and try to find those big customers ourselves,” Pennefather says. “So we targeted some of the larger players worldwide, and got them to introduce us to their customers, and it was through those introductions that we got those reference sites. What it meant was as we were rolling out these reference sites and proving it for their customers, they were first-hand seeing how the technology worked. “As a result, this is a technology that they understand; that their own customers say works and are writing reference case studies for, and

“A prime example for the use of Kestrel Maritime is the search and rescue scenario, where somebody has fallen overboard. Trying to find that person is very difficult, simply because of the size of the ocean. You’re trying to discriminate that person with their life jacket against the surface of the ocean, which is also impacted by environmental conditions such as white caps, clouds and sun glare. “When applying for Commercialisation Australia’s assistance we already had the land side covered, and we had customer prospects interested in the maritime solution. They weren’t ready to commit to help us complete the development, but we were confident that once we could do that that they would be very interested in the final product. So from a business perspective, we could clearly see the opportunity; we just needed assistance to help us do the final development to prove the technology,” Day says. That confidence has now been validated: Sentient has established a growing number of customers and partners ranging from manufacturers of air vehicles and payloads to integrators, government, defence and civil organisations involved in ISR missions around the world, including the Australian Army, Royal Australian Air Force, Canadian Defence, Insitu Inc and CarteNav Solutions.


which they are now introducing to their wider sales force. That’s our distribution strategy moving forward and it’s on the back of that that the investors are ponying up the money, because they see that we have essentially proven it to the people that will eventually take us to market and grow the distribution.

Instead you have to go along with them to customers and help them sell the solution, but then you have to deliver the solution for them.”

For more information go to www.icetana.com

“It takes a while and you need partners who can stay the distance.” Pennefather says it would be a mistake to imagine you could just partner with a major player, hand over your product, and leave the rest to them. “In reality, particularly when you’re starting off, you have to do the work yourself and accept that really those partners are effectively - at least in the early few years - more of an introduction mechanism than anything else. They will help get you in front of their customers, they will support you, but you still have to do all the work. “When you start off, even if you are very successful, you are probably going to be a small blip on their revenue equation, and therefore there is a limit to how much their sales force is going to push your product independently.

Day says a major challenge in proving the concept was gaining access to real video footage for use in development and testing – something which would have been far too expensive for Sentient to generate on its own. “Not only is it challenging to get representative video yourself, much of the footage held by government and military organisations is actually quite sensitive and has generally not been available to us. Fortunately we were able to obtain video from a number of Navy, Coast Guard and maritime rescue organisations, but it was quite difficult as a small Australian company, even with all the support we could get, to convince them to spend some time helping us. “While the Commercialisation Australia grant has helped to give us credibility locally, our main focus is overseas, primarily around the US market. “We find that is a very challenging and expensive exercise,” Day says. “It relies on a lot of face to face contact, there are many security restrictions on communications with foreign companies and in some cases unless you are physically located in the US you can’t even talk to certain people. “Ultimately we are aiming for the technology to be built into every sensor and system that our partners and customers provide which will

support widespread inclusion in contracts and programs of record from Defence and government end users,” he says.

For more information go to www.sentientvision.com



DOMAIN: Defence, Safety & Security

for those in peril of plunging into the sea...

One Atmosphere crash test at HMAS Stirling. [Image courtesy of One Atmosphere]



It was, points out One Atmosphere Managing Director Tim Lyons, the fourth helicopter crash in the North Sea in the last four years alone, which together have cost 20 lives. Similar tragedies have also caused deaths in the Southern Hemisphere, of course, including the loss of an Australian Army Blackhawk helicopter which crashed on 29 November 2006 while attempting to land on HMAS Kanimbla’s aft flight deck, claiming the lives of two of the ten crewmembers. While many helicopters are already fitted with permanent emergency flotation systems, such systems have proved manifestly inadequate. For one thing, the weight of these systems severely impact aircraft performance, reducing payload and endurance. For another, the pilot must remain in control of the aircraft to conduct a controlled landing and in most cases manually activate the flotation equipment prior to impacting with the water. At any rate, in a crash situation, standard flotation devices tend to rupture or sheer on impact making them ineffective in providing positive buoyancy to the helicopter and preventing them from sinking, significantly hampering escape and survivability. Fortunately Lyons, an ex-Navy clearance diving officer who is highly trained in ‘blowing things up’, disarming mines and bombs, and later working as a Navy diving representative for the submarine rescue community, has an inspired solution. His Pegasus ABS is a light weight ‘bolt on/bolt off’ post-crash emergency buoyancy system which is so ingenious that in October 2013 it was declared winner of Australia’s most prestigious defence innovation award. Already proven through the Defence Science and Technology Organisation’s Capability Technology Demonstrator program, the Pegasus is soon expected to be tailored specifically for the Defence Department’s Fleet of Tiger Armed Recognisance Helicopters (ARH).

In August 2013, four people were killed when a Super Puma helicopter plunged, without warning, into the icy waters of the North Sea. Investigators later determined that as the helicopter’s nose pitched up, its airspeed dropped dramatically. While crew belatedly recognized the danger, the reduced performance and low altitude meant that “impact with the sea was unavoidable.”

The company is now working towards further integration into the Australian Defence Force and the Civil Aviation industry and is progressing Pegasus towards achieving Australian Defence Force (ADF) and Civil Aviation Safety Authority (CASA) Air Worthiness Certification. “At the end of our next Defence program, not only will Pegasus be a safety/capability option for the Australian Defence Force, but also a lot of other nations, because the Tiger helicopter is very similar (in terms of physical attributes) to the Apache helicopter, which is the attack helicopter the US and British use,” Lyons says. “Essentially both helicopters have bomb rack units under stub wings where they connect specific military equipment, so the system, which simply clicks onto an Australian Tiger, should be able to just as easily click onto an American Apache. “Once the Pegasus system is ADF Air Certified, and in service for the Tiger helicopters, transitioning this system into service for other ADF helicopters should be a fairly seamless process - a process



Australia’s Tiger Armed Recognisance Helicopter is currently the foremost focus for One Atmosphere’s Pegasus post-crash emergency buoyancy system. [Image courtesy of One Atmosphere]

that will address specific aircraft type aspects. The MHR-90 helicopter which is operated by both Army and Navy will be deployed from the Royal Australian Navy’s Landing Helicopter Dock (LHD) ships. The benefits and value for money of transitioning Pegasus to the MRH-90 as a bolton/bolt-off system is significant. Additionally the Australian Navy is in the process of procuring new Seahawk helicopters, an Anti-submarine helicopter designed to be operated from warships such as the ANZAC frigates. The benefits of Pegasus could also be extended to the new Seahawk fleet as an integratable post-crash buoyancy system, especially noting that this type of helicopter is designed specifically for the marine environment,” Lyons says.

Ditch and crash The first true ditch and crash system, which can operate at impacts of up to 20gs in submerged and subsea conditions, the Pegasus can keep the aircraft floating and in a favourable orientation for escape indefinitely in most situations, reducing vulnerability, and increasing personnel survivability and asset recovery. It relies on an innovative – and top secret – gas supply system to inflate the lightweight, emergency buoyancy system, comprising specially designed and manufactured

buoyancy bags. The Pegasus has the capability to return an aircraft to the surface from a depth of up to 10-metres. One Atmosphere has successfully completed a Commercialisation Australia Proof of Concept project and the Pegasus project has also met all Target Performance Measures as contracted for the Australian Defence Force. Lyons says the Commercialisation Australia grant helped keep the company afloat during the lengthy proof of concept phase and will help it achieve air worthiness certification. “In terms of commercialisation of the Pegasus, we are a bit of an oddball, in the sense that for most products, you prove the concept and then you are more or less ready to go,” Lyons says. “In our case, because we are initially focussing on aircraft, proving the concept is the first step, and the second step is the air worthiness certification. “The big thing about the Commercialisation Australia grant is that it has allowed us to progress the prototype to the point where pretty much anyone who is interested in this space can see that it works, whether it’s on a Tiger ARH helicopter or a civilian helicopter taking people out to oil rigs. They can see that it is a true postcrash emergency buoyancy system which


is also very lightweight. “The Commercialisation Australia grant has also allowed us to look at putting it onto other helicopters with different airframe attributes. Additionally, the Experienced Executives component has allowed us to more actively engage with Defence, which has enabled us to progress to the next level within an industry that can be difficult to navigate. And since it takes so long to complete this kind of work, support from Commercialisation Australia is proving to be invaluable,” he says. Lyons says as an ex-military officer, he founded his company with little knowledge and experience in knowing how to run a business, how to deal with other organisations, how to commercialise a product or what to do about protecting IP. “I guess what I have learnt is that not only do you need to be adaptable, you have to be like a sponge, and soak up as much as you can as quickly as possible. Commercialisation Australia and our Case Manager have been a huge help in this regard,” he says.

For more information go to www.oneatmosphere.com.au


milestone Achievements

The latest news from some of the companies and researchers participating in Commercialisation Australia.

Admedus’s CardioCel Cleared for Sale in the US

Proteomics International achieves validation milestone

In February, Australian healthcare company Admedus announced it had received FDA clearance to market CardioCel® in the US. CardioCel® is the group’s lead regenerative tissue product to repair and treat a range of cardiovascular and vascular defects. The Company will now look to complement its existing product launch in Europe with preparation for initial sales in the US.

In November drug discovery company Proteomics International announced it had completed an important validation step in the discovery of protein biomarkers for diabetic kidney disease.

The company says CardioCel® is intended for use in the US in pericardial closure and for the repair of cardiac and vascular defects in both adults and paediatrics.

Proteomics International managing director Richard Lipscombe said there was excellent correlation between the new mass spectrometry platform and the traditional gold standard test and the outcomes were a key step towards commercialisation.

“This is a significant milestone for the Company as we expand into global markets and further develop our range of regenerative tissue products for commercialisation and sale,” said Mr Lee Rodne, CEO of Admedus Ltd.

Admedus is able to sell CardioCel® in both Europe and the US and will pursue market approvals in Asia and other jurisdictions. The company recently raised $10.4 million through a rights issue as it ramps up commercialisation of its CardioCel cardiovascular patch. The offer for one new share for every five shares held was taken up by around 2700 shareholders, or about 70 per cent of eligible investors. Allied Healthcare offered the new shares at the issue price of $0.05.


Of 13 provisional plasma protein biomarkers, seven were validated at high stringency using the company’s mass spectrometry technique.

He said the company’s approach could also be used to create tests for other medical conditions.


Liquid Management wins award Liquid Management Group won the ANZ Made in Brisbane Award for HighGrowth Business Start-Up at the recent Lord Mayor’s Business Awards 2013. Liquid Management Group Pty Ltd has developed a collaborative publishing platform for small to medium publishers and authors. This cloud-based platform will provide a simple, fast and economical way to create, manage, and produce digital publications for mobile services. Commercialisation Australia support is being used to assist Liquid Management Group commercialise the publishing platform and achieve sales both in Australia and overseas.


Eureka moment for Scanalyse Curtin spin-off company Scanalyse has taken out the 2013 Rio Tinto Eureka Prize for Commercialisation of Innovation, for its MillMapper and CrusherMapper technology. Scanalyse was established from Curtin research into the use of laser scanning technology to monitor wear and tear in giant rock crushers and grinding mills. The company was acquired earlier in 2013 by Finnish mining giant Outotec, in recognition of the technology’s immense potential in the global market. “Scanalyse illustrates a successful path from research to implementation,” says Frank Howarth, the Director of the Australian Museum, which hosts the awards.

www.outotec.com CONTINUED ON PAGE 13


“CardioCel® is an important addition to the surgeon’s armoury in the treatment of congenital heart disease, as well as for the repair of heart valves and other cardiac defects” he said.

The research team developed the panel of biomarkers after taking 508 samples from patients with diabetic kidney disease and healthy controls at Years 0, 2 and 4.



DOMAIN: Defence, Safety & Security

putting a check on

cV Fraud Towards the end of 2004 Steve Carolan was eager to start a new venture. Carolan had spent time working in the Customs Service, acquiring in-depth knowledge of screening systems and profiling, before opening two successful businesses. Drawing on his depth of experience, Carolan’s approach was both methodical and farsighted. He gave himself six months to develop a business plan and drew on his business network to put together a team of like-minded individuals. Together they took a close look at the emerging technologies in their preferred market space and made their own evaluation of where that technology would and should be in a decade’s time.

“What we saw were potential competitors all around the world who were simply following each other and delivering almost zero innovation,” Carolan says. “My team saw different things: we saw where this could go and what the real need was, and spent a lot of time talking to customers and other people to work out exactly what we could do. Commercialisation Australia came in and helped us with our Proof of Concept, and their support helped us to achieve an enormous amount, which was great.” His company, WA based CVCheck Pty Ltd (www.cvcheck.biz), has been building systems to address that vision ever since. Now CVCheck has a fair chance of becoming the preferred global leader in personal and background checks for individuals and organisations, and of achieving at least one third market share across Australia and New Zealand within the next three years. “We truly believe that is possible, because of the way we’re running our business,” Carolan says. “We think that the model that we’re implementing, where every individual owns their

information and is able to share it, will let us achieve those goals.” What Carolan had realised is that when it comes to personal screening and verification services, the time and cost associated with undertaking CV, tenancy and other checks is a major headache for both individuals and organisations alike. The rising incidence and cost of identity fraud and misrepresentation were already igniting the need for a fast, cost effective and easily accessible personal screening service.

The problems Carolan planned to address through CVCheck are considerable and unrelenting. Studies by the Australian Attorney-General’s office have found that one in six Australians have, or know somebody that has, been a victim of identity fraud. In the United States alone, more than 10 million residents have their identities used fraudulently each year, creating losses totalling more than US$20 billion. There is also considerable fraud and theft associated with the massive growth in online dating services - often conducted by sophisticated gangs and organised crime - which not only carry a financial, but often an emotional cost. For instance, in 2012 the Australian Competition and Consumer Commission received 2,440 complaints reporting a total loss of $23.5 million and, presumably, considerable heartache. Then there is qualification fraud - a global problem which sees fake qualifications being used to secure positions. This has


an impact on organisations all around the world, including the White House. It also affects specialist industries including dentistry and medicine, engineering, business management, science and law. The cost of that kind of fraud to an employer can be anywhere from 50 to 100 per cent of an annual salary. By applying the team’s knowledge and forward thinking, CVCheck’s unique technology is taking personal screening and verification services to a whole new level.

Offering one of the most technologically advanced screening systems in Australia, CVCheck’s online screening system is fully automated and totally secure, making it not only fast but also accurate and easy to use. Developed with the help of a $250,000 Proof of Concept grant from Commercialisation Australia, the secure online service provides more than 500 different types of checks across more than 70 countries, and - courtesy of CVCheck’s Link® technology - allows individuals to securely share their information with anyone, anywhere, anytime. The company, which has now completed two successful capital raisings, is already providing a full range of screening and verification services to a wide range of industries, and these clients span across most sectors of the economy in many of Australia’s leading companies. “It has taken a few years to get it going and to get permissions, because we plug directly into the national police name


Image courtesy of Saron Education

Innovation award for Saron In October Saron Education, trading as SEQTA Software, won the WA Innovator of the Year, Growth Category award. Managed by the WA Department of Commerce, the Awards recognise and reward the best innovators and entrepreneurs in the state.

match databases and the like,” Carolan says. “We started via WA Police and it’s only this year that we have been given direct access across a whole range of information sources. Now our services stretch to 500 checks across 70 countries.

“Attracting talented people is a challenge – they are already in demand. What brought them to us is that they can all see the vision. It’s exciting being in a company that’s going places and where every day new things are happening and new companies are signing up.” Carolan says Case Manager, Chris Farquhar, proved a great resource as the company was moving towards commercialisation. “He has been of great assistance; he is a good sounding board,” he says. “He’s got many years of business experience and it’s good to be able to bounce ideas around with someone who is not emotionally involved in the project. “He is also very well connected and has been able to introduce us to a few people and he is always there when we need him. “We really appreciate the help we have had from Commercialisation Australia. I think it’s a tremendous thing that Commercialisation Australia is doing. The support has really made a difference to us and we appreciate it,” he says.

For more information go to www.cvcheck.biz

Trial success for Advanced Braking In October the City of Swan in Western Australia reported on the success of a six month trial of Advanced Braking Technology’s SIBS® braking system as applied to two waste collection vehicles in use by the City. The trial has been so successful the City is investigating the possibility of extending the use of the SIBS® across other vehicles in the City fleet. City Mayor Charlie Zannino issued a media release to declare the six month trial a success. “The trial included fitting two City waste and recycling vehicles with the Sealed Integrated Braking System (SIBS®) from Advanced Braking Technology with the aim of improving the safety and lifespan, and hence operating costs, of the truck brakes,” he said. “While the prime advantages are the significantly lower brake wear and improved safety, the testing has highlighted a number of other benefits with the new SIBS® system, notably more control and confidence in the braking system. “There’s also the added bonus of no brake squeak, which is always a welcome relief for both drivers and residents.”


progress as well as view student notices and receive messages and much more. SEQTA Coneqt is a web-based application giving teachers an easy to use vehicle for the delivery of course work, learning resources and other key information to students and parents via the internet.


New appointment and investment for Nexvet BioPharma In October Nexvet BioPharma Pty Ltd announced the appointment of one of the world’s most senior animal health clinical research managers, Dr Colin Giles, to the Nexvet family. Boasting more than 30 years’ experience as a veterinary clinician, researcher and industry leader, Dr Giles is the former Vice President for Veterinary Medicine Pharmaceuticals R&D for Pfizer Animal Health (now Zoetis, the world’s largest animal health company). He joins the Nexvet team as Vice-President of Clinical and Regulatory Affairs. In the same month Nexvet announced it had secured $7 million from new and existing investors in Australia and abroad. “The work we have done to deliver our vision of transforming animal medicine is attracting a lot of attention, and the fact that this capital raising was oversubscribed is testament to the enthusiasm of our investors,” said Dr Mark Heffernan, CEO of Nexvet. Nexvet has a novel, safe and effective therapeutic platform of biologic drugs to treat companion animals including dogs, cats and horses. The Commercialisation Australia-funded project involved the employment of an Experienced Executive as well as funding to implement product development, commercialisation and partnering liaisons.



“We also spent a lot of time hiring the right people,” he says. “For a company at our stage of development we have an amazing team of people. The quality of our people is extraordinary and when you have that you can make great things happen.

Traditional methods of parentteacher-student communications are based on face-to-face communication styles. Saron has developed the SEQTA product suite comprising Teachers Assistant and Coneqt, which enhance communication between parents, students and teachers by providing an interactive web-based mode of communication. SEQTA Coneqt will provide transportability of school work between home and school by enabling students to access information such as their timetable, lesson information, and assessment





Alliances for BuildingIQ

In December BuildingIQ, a leading energy management software company, and The S4 Group announced the successful incorporation of their technologies to identify unique energy savings for a commercial office space in Cambridge, Massachusetts. The S4 Open BACnet-N2 Router provided the enabling technology that tapped into the existing Metasys® N2 legacy system, while BuildingIQ’s Predictive Energy OptimizationTM software extracted key data on the efficiency of the building’s operations. As a result, the two companies were able to reduce operation costs and seamlessly integrate HVAC energy optimization in a commercial building with older infrastructure.

OMB launched, first client capital raising exceeds expectations In October the Australian Securities Exchange (ASX) launched its new bookbuilding facility, ASX BookBuild, from Commercialisation Australia Participant On-Market Bookbuilds. ASX states the patented process will more efficiently price and allocate private placements and initial public offerings (IPOs). Within five days of launching, WAM Capital Ltd used the ASX BookBuild facility to raise capital and significantly exceeded expectations. WAM Capital Ltd announced a $14.8m placement to meet its DRP shortfall. The placement was lead managed by Taylor Collison and offered to all professional and sophisticated investors. It was oversubscribed by 67%, and WAM Capital Ltd increased the size of the offering to $24.7m.

The facility was used a fe successfully raised $10.85 Stockbroking as the lead

In mid-December, U&D C to use the ASX BookBuild capital raising of between of $0.50.

ASX BookBuild will enable demand from the entire m Along with improved corp brings the principles of fa which govern secondary raising capital.


The incorporation of the S4 Open BACnet-N2 Router and BuildingIQ’s cloudbased solution was completed within just one hour, without interruption or modification of ongoing performance. Prior to implementation of these solutions, the building management system’s local system integrator would need to manually make adjustments to the system’s hardware. Now that the system is using BACnet communications, the building automation industry’s primary open standard with S4, BuildingIQ’s cloud-based solution is able to make real-time adjustments to building controls to maximize efficiency during heating and cooling operations. The installation was achieved with zero impact to occupant comfort and has reduced labor costs by eliminating the need for manual modifications to the system. In November the company announced it has partnered with Johnson Controls to bring its applications onto the new Panoptix™ platform. Using Panoptix, Johnson Controls’ customers will be able to access BuildingIQ to automatically reduce energy consumption and costs while improving the operational efficiency of a building and facility managers.


First commercial contract for Sun Mining Services In November Sun Mining Services Pty Ltd was awarded its first commercial contract, after a drilling and explosives contractor engaged the company to provide its Wala product to a rail cutting project. The six month contract is expected to consume 1,200 tonnes of product, and generate revenue exceeding $1 million. The contract was secured on the basis of very successful testing made possible by Commercialisation Australia support.

Ai-Media Makes UK Acquisition, and Joins University of Melbourne and Nesta for UK Teacher Improvement Project In November Ai-Media announced it had acquired Bee Communications in the UK to assist in the commercialisation of the Ai-Live solution. A new education technology project, led by the University of Melbourne's Graduate School of Education with industry partner Ai-Media and UK innovation champion Nesta, was also announced in November. The initiative will help improve teaching quality by providing teachers with transcripts to better analyse their lessons and build their performance. The technology will be trialled in eight English primary schools from January to September 2014, with £366,030 (A$625,300) in funding from the UK’s Education Endowment Foundation (EEF).

Sun Mining Services has developed an innovative blasting technology which is safer and more cost effective and addresses the issue of toxic post blast fumes.

The project will use Ai-Media’s Ai-Live speech to text technology to capture teachers’ spoken lessons in real time. After every lesson, teachers will receive a full transcript of their lesson along with visual indicators for high level improvements. Participating teachers will also receive extensive professional development and support throughout.




Plaudits for Sh

ShopReply (formerl the first time on TV introduced in a mor Viewers were able t presenter’s outfits d

The company also s TEN as partners and technology in comm in November. Bauer Magazine and will b featuring ShopReply partnership.

Bauer and ShopRep Australian merchan merchants activated Ralph Lauren, The I partners now have the ShopReply platf



ew weeks later by LNG Limited who 5m via a placement with Foster manager.

Coal Limited was the first company d Facility for an IPO, with a targeted n $50m to $125m at an offer price

e companies to access investor market when issuing new securities. porate governance, the facility airness, transparency & efficiency, trading, to the primary market for


chris burnett Tell us a bit about yourself; including what you think makes you suited for a role as a Commercialisation Australia Case Manager?

Image courtesy of On-Market Bookbuilds


ly BuyReply) was featured for V in November, with the service rning program on Channel 11. to text or tweet to buy the directly off screen.

ply will be activating up to 100 nts as part of the roll out. Australian d on the platform include Glue Store, Iconic, Seafolly and others. Media access to more than 500 brands on tform.



After completing my MBA, I started my own management consultancy practice, but four years later in 1994 I bought and became CEO of my first “product” business, a small wireless communications company based near Silverstone race circuit in England. After growing it quickly and raising venture capital along the way the business was over ten times bigger and sold four years later. Since then I’ve had a helter skelter ride, and have been the CEO or chairman of eleven other high tech growth businesses along the way. My wife and I decided to move our family including three young children to

Since deliberately coming out of the “fast lane” for a breather at the end of 2011 I’ve been advising technology businesses on various commercial matters, especially how to get their innovations to market, and also mentoring executives who appreciate the wisdom of “grey hair” – or in my case “almost no hair”… When the Case Manager opportunity with Commercialisation Australia came along I jumped at it, and I now spend really fulfilling days working with optimistic entrepreneurs helping them to take potentially world-beating ideas to the global marketplace.


signed up Bauer Media and Network d began rolling out the ShopReply mercial trials with these companies r Media is trialling ShopReply in OK be extending the trial by six months, y in additional titles as part of the

I grew up in a small village in the English countryside and spent my teenage years when not at school working all hours on a farm and alongside my brothers in our grandad’s butchery business, where I realised pretty quickly that I wasn’t cut out for a life of manual labour. After “getting away” and studying electronics engineering at university I joined the Marconi Company and spent eight years in design, then project management roles in defence electronics. The big turning point in my life that came next was winning a scholarship to live and study in Switzerland at IMD, one of the world’s top business schools.

Australia in 2003 and I ran a softwareas-a-service business in Adelaide before “settling” (a relative term) in Brisbane in late 2005. Whilst in Australia I’ve raised well over $20m of venture capital and travelled to 25 countries whilst involved in the building of various growth businesses here. I also picked up a law degree along the way, so now I find I can exercise both sides of my brain to help keep the Alzheimer’s at bay!

Specific areas of focus for my own businesses have been electronics, telecoms, defence, software, IT and light manufacturing. In my consulting work I have worked in many market sectors, and since being with Commercialisation Australia I’ve looked at over 80 Stage 1 applications and worked directly with twelve Commercialisation Australia participants in Queensland so far.



DOMAIN: Defence, Safety & Security



Two Australian start-ups who identified major holes in the technologies underpinning the electronic payment industry are starting to make major inroads into this highly competitive market. Both have found that it takes more than just a great product to make your mark in the payment industry. And both have found Commercialisation Australia support essential to their burgeoning success in the market.

“We have to be ready for market as soon as possible,” says Southern Payment Systems (SPS) Director Grant Bissett. “Our limited resources, the highly competitive landscape, and many other factors make the timing very important.

“It is really hard to build a name in the industry because it is all about security and trust, so we needed to build brand and we had to prove that we were professionals,” says Veronika Bilkova, CEO of EFTlab Pty Ltd.

“The purpose of our Proof of Concept project was to run a pilot program with our financial service partners so that they could see the system in action with real business flowing through it for several months before the full commercial release,” Bissett says. “Six months might not mean a thing to many of the organisations we work with from the financial services world, but to a small technology start-up six months is a big deal. Commercialisation Australia's assistance has allowed us to get the product through that pilot and to a full commercial launch far quicker than we could have otherwise.”

“You can have the best software ever, but you will still face the challenge of proving it really works and of finding that first customer who will be brave enough to use such software in a payment processing system. The grant has been excellent in letting us attract customers worldwide. We became Visa and Mastercard vendors, which is very expensive: we couldn't have afforded that without having the grant, and it is strong validation of our product,” Bilkova says.



Southern Payment Systems With financial and advisory support from Commercialisation Australia, SPS completed a highly successful pilot program for Pin Payments – a contemporary online payment platform that helps Australian small businesses to effectively participate in the global economy – in May 2013. The Proof of Concept project gave the company the confidence it needed to publicly launch the Pin Payments platform, Bissett says. “At a deeper level, SPS was able to validate the various technical elements of the platform and the performance and operation of our partners. More recently, SPS has incrementally added dedicated capacity within the business to focus on business development and partnering opportunities.

“The grant from Commercialisation Australia provided a much needed financial foundation to enable the business to achieve successful outcomes from its Proof of Concept pilot.” Australia’s first all-in-one online payment system, Pin Payments offers multi-currency online credit card acceptance, with features previously available only to companies based in Europe and North America. It allows Australian businesses

and individuals to instantly and securely process domestic, international and recurring credit card payments online, providing a cost effective alternative to smaller companies unable to get merchant accounts for on-line trade. In a boon to small business in particular, it will enable Australia to participate without disadvantage in the growth of global online business. Pin Payments arose because Bissett and co-founder and director Dominic Pym, who have both been working in the technology space for around 20 years, came up against the same payment problem over and over again. “The problem that we noticed was that Australian offerings to allow small and new businesses to get paid on the Internet were significantly inferior

to what was available in other parts of the world, particularly the US and UK,” Bissett says. “A lot of small businesses who were trading online wanted to sell in their customer's currency, but if they couldn’t do that, they wanted to sell in US dollars because that is the de facto standard for e-commerce transactions. The problem they faced was that for an Australian business to sell in US dollars meant having a foreign currency credit card facility, and having to manage a foreign exchange process: a foreign currency account, and the cost and complexity of doing that until now has been out of reach of small businesses and new businesses. “Our payment platform was designed for developers with the deliberate intention of opening up the

EFTlab Pty Ltd The electronic payments industry is growing rapidly, driven by innovations in technology such as mobile payments and highly dynamic business environments. The most pressing challenge the industry faces is responding to changes fast enough to satisfy customers without impacting accuracy, security and reliability. To address the need for a new generation of testing tools for this dynamic environment, Bilkova has been working on a solution since 2011. Between them, Bilkova, (who cut her teeth in the payment industry in Budapest, Hungary, before moving first to London, then to Queensland), and her colleagues were able to draw on more than 50 years of combined industry experience to develop their solution.

“We found out there was a major gap in the payment industry market because all the software provided, especially for testing, was really old school, heavy weight, very expensive, and very hard to use and configure,” she says. ‘So first we developed some freeware tools which we made available to download, and then we started with the simulator, our main commercial product. It now contains five modules, each addressing a

different purpose, according to the needs of different customers,” she says.

tions to cover a full set of tests for each type of payment system.

The outcome is EFTlab's Babylon Payments Simulator (BP-Sim), designed to help modern dynamic electronic payments businesses deliver reliable innovative solutions to the market faster. BP-Sim comprehensively tests payment systems, supporting industry leading transaction throughput while being flexible, easy to use and reasonably priced.

“We keep developing the software because each company has different transaction formats and needs different kinds of modules,” Bilkova says. “So we designed that software to be very flexible, so that we can add anything they need in a matter of days. This is a big difference between us and our competitors, who tend to have really heavyweight architecture which is difficult to customise. We also have the advantage of having recognised and supported the growing use of Linux and Unix in the payment industry.”

Now sold worldwide from EFTlab offices in the US, Europe and Australia, and with customers including First National Bank of South Africa, Imperial Bank of Kenya and US company Smart Business Technology, BP-Sim provides a continuous feed of transac-

Bilkova, for whom English is a second language, says when she first decided to apply for a Commercialisa-



e-commerce market for smaller Australian businesses.” SPS’s first-mover advantage has been validated and endorsed by its strong strategic partnerships with some of Australia’s largest financial institutions, including NAB, KPMG and Perpetual. “We have processed millions of dollars in sales and have thousands of Australian businesses using our platform to sell locally and overseas. The transaction processing is growing steadily, and for us, because our revenue model is so closely tied to our customer's revenue, that processing volume is something that we keep an eye on - it is a very simple indicator of our growth. “So the unit economics of each account, each transaction, are extremely healthy, and now we just need some time to grow the product,” Bissett says.

tion Australia grant she was inundated with advice from people urging her to seek professional help to write her application. “It was advice I chose to ignore, because we were struggling with the budget at the time, and had no customers, so I took a chance and completed the application myself,” she says. “In the end, to my surprise and delight, that turned out to be the right decision. If you know a lot about your project, I really don’t think you have to spend thousands of dollars to apply for a grant. Yes, it is hard work, but the application form is really well thought out and asks the right questions. I can't imagine paying a consultant to ask me the same questions as the application,” she says.

He says the development has the endorsement of NAB, which has been very supportive of the work done to date. “For example we implemented a delayed settlement system for our merchants, so when our merchants make a sale, we can configure the time that it takes for the funds to come from the customer's credit card into the merchant's bank.

After successfully commercialising and selling a range of software products for advanced simulation markets such as aeronautics and defence, a light dawned for the brains behind ImmersaView Pty Ltd.

“What this demonstrates is the opportunity for smaller, more nimble teams to deliver,” he says. “A small start-up like us has far greater agility to address those sorts of problems than the bank does. I think they're excited about that, and I think that helps them build some confidence in us, and generally the NAB are very supportive of what we are doing.”

For more information go to www.pin.net.au

“Certainly finding the time to complete the application wasn't easy, but on the other hand, it was a great opportunity to refine our business model and business plan,” she says. “The ongoing feedback gained from Case Manager Chris Burnett has been really useful throughout the whole project,” she says.

For more information go to www. eftlab.com.au


With projectors plummeting in price and the images they project becoming much brighter, and with graphics cards generating far more power, why not embed the technology to stitch multiple screens together on a graphics card? The need was clear: both ImmersaView’s Warp® and SimVisuals® software products had proved their worth in using the host PC to make images project onto a curved screen. While both were already facilitating advanced simulation activities in markets such as aeronautics and defence, a gap still remained in the technology used to record what happens during a simulation exercise. “If you wanted to stitch multiple projectors together, to create an immersive screen or an immersive environment, you need to use multiple projectors. Matching those projectors together to create an immersive environment require specialised electronics in the projectors in order to make everything seamless. What we saw was that we could take our geometry correction and edge blending capabilities, which make the image seamless, but do that on the graphics card. That way we could work with any projection technology, as opposed to only certain high-end makes and models of projectors. Using software, we were able to remove expensive electronics hardware, opening up the application areas for immersive projection displays and reach a global market.


DOMAIN: Defence, Safety & Security

stitching up


Image courtesy of ImmersaView Pty

“After several years of developing and working with extremely high resolution displays, we noticed there was a major barrier when trying to undertake high-resolution real-time data sharing. Previously, it was only possible in a local environment, and required copper video cables, floor boxes, connectors and converters, and video matrix switches.” “For instance, with simulated exercises often involving 50 or more participants, one of our Defence customers was looking for a more advanced way to capture and record the PC-based activity of all users participating in simulated exercise,” says ImmersaView Director Dr Andy Boud. “Yet the limitations of existing hardware technologies meant they could only capture three video streams simultaneously.” And so was born ImmersaView’s solution, VADAAR (Video, Audio, Data for After Action Review), an innovative software tool that can record, stream and review high definition video over existing computer networks to anywhere in the world. As the desire for high resolution, real-time data in areas like Defence, Aerospace, Energy and Medical grows; the demand to share high quality data is becoming

paramount. VADAAR can transparently capture and stream what is happening on a user’s PC, including video, audio, data and metadata such as GPS positional data. The technology is designed to act as a framework for video, audio and data transmission, and can be used for complex applications such as flight simulators, medical simulations, within training organisations, and for sophisticated visual group communication.

locations the answer to a prayer. It found being able to present complex, threedimensional data onto a large, immersive curved screen display enabled collaboration between Geologists and improved the decision making process.

Killer Application

The commanding officer was able to be fully immersed in the simulated environment. Troop movements could be easily visualized with a high level of realism. The immersive visual experience during their simulation and training exercises were enhanced by seamless integration with the real-time application.

“By having that inspiration we have been able to deliver what is almost a killer application for some of our customers, including Boeing Defence, Boeing Commercial Airlines, Thales, ConocoPhillips, London Fire Brigade, and London Ambulance Services,” Boud says. “What these customers have in common is that they have got many, many sources of input data that they want to be able to manage and distribute, but they want to do that in a very flexible way, and also to record that information so that they can later analyse why decisions were made. “VADAAR records the entire simulation and streams it in real time. It can also record multiple sources at once and bring them together in one place, synchronizing data and making it possible to effectively monitor how different aspects of your simulation interact with each other.”

VADAAR in Action The effectiveness of the technology was on full display after a world leader in high value mineral exploration and mining recently commissioned three ImmersaView curved screen immersive display systems for their new global exploration and collaborative facility. Needing to make high value, highly complex decisions based upon limited information, the customer found being able to visualize this information and make informed decisions across often remote

Likewise the Australian Defence Force (ADF) recently completed mission rehearsal and training exercises for troop deployments.

Boud says the funding from Commercialisation Australia had helped the company scale its business by taking on extra employees in order to get to market faster. “At the moment we have a market edge and a technology edge, but as with all technology, that window of opportunity is relatively small, so the quicker we get it to market, the better we can leverage our ability and products to get to market,” he says. “Case Manager Keith Steele has also helped us realise the importance of getting out there with our product sooner. We are now engaging with resellers and building our reseller and channel partners so we can actually get to market much quicker. “We’re building our UK operations, and we will be looking to do the same in the United States. We are working hard to increase our market presence to become a leading player in that audio visual market,” Boud says.

For more information go to www.immersaview.com



DOMAIN: Defence, Safety & Security

Comfort + effectiveness

=compliance When it comes to personal respiratory protection in the workplace, the fact is people will wear their masks continuously if they are comfortable and have mobility, explains PAFtec Australia Pty Ltd CEO Dr Alex Birrell.

The equation is perfectly straightforward: if the mask is uncomfortable or impedes the wearer’s work operations, most workers will ‘sneak’ an opportunity to take it off even for the briefest of moments to seek relief. Unfortunately that moment could impact that person’s short or long term health and in some cases their life span. Respiratory protection is a significant workplace issue, with well documented studies clearly showing the health implications of chronic exposure to dust, silica, infectious pathogens, asbestos, heavy metals and other work place gases or materials. Exposure, through poor respiratory protection programs or low compliance, can result in absenteeism, debilitating chronic illnesses and mortality with social and financial impact to employees, their family and companies. “While there are many respiratory protection choices in the market, most forms of respirator devices used remain relatively basic (such as disposable masks) and offer wearers compromises on either comfort or mobility,” Birrell notes. “Many products haven’t really changed in 20 years. The main categories of respirator are negative pressure masks (disposables and reusable masks which require the wearer to pull the air through the filter) and positive pressure masks (powered air purifying respirators which have a motor that pulls the air through the filter). Other categories include dedicated self-contained breathing apparatus (SCBA) used in high risk (immediately dangerous to life or health) or oxygen deficient environments. “Negative pressure masks are the most commonly worn masks and typically perform poorly unless correctly fitted and

worn tightly on the face to maintain the facial seal. Moisture, heat and CO2 build up can contribute to wearer fatigue and heat stress,” explains Birrell. “This is particularly so in jobs where employees are doing high exertion work in hot conditions over long periods of time. Other personal protective equipment (welding helmets and visors) and the ability to freely communicate can make negative pressure masks unsuitable choices,” she adds. PAFtec, an Australian company founded by a team of ex-ResMed engineers, has developed CleanSpace2®, a revolutionary, state-of-the-art personal powered respirator that is comfortable, offers high protection and is user friendly. The team has previously designed medical products from concept to manufacturing that are currently being used by millions of people around the world. CleanSpace2 builds on a combination of technologies found in today’s industrial respirators, medical respiratory devices and consumer electronics. The CleanSpace2® Powered Respirator features a microturbine toroidal motor using a lithium polymer battery and piezo electric pressure sensors and a proprietary algorithm that drives the breath responsive technology, AirSensit. The system can produce more than 200 litres of filtered air per minute, has an operating time of four to eight hours and can filter the air to 99.97% protection efficiency for particles of 0.3 micron and above (includes bacteria). The system comes with four sizes of soft silicone masks and weighs just 600g. “Our team has designed and commercialised a proprietary miniaturised motor


controlled by software system that uses pressure sensor to create positive air pressure within the mask, the same concept as a clean room. This means if the wearer does break the facial seal (by adjusting or talking), air rushes out rather than in, preventing contaminated air coming into the mask and being breathed in,” Birrell explains. “Our customers are telling us employees are finding CleanSpace2 is a significantly more comfortable and natural breathing experience reducing heat stress and eliminating mask fatigue and improving compliance, compared to their previously used disposables and reusable masks,” Birrell adds excitedly. Commercialisation Australia funding was the key to the commercialisation of the world’s most innovative industrial respirator from PAFtec. The Program funded CleanSpace2 with a broad gas filter range, which has opened up the large European and Japanese markets. CleanSpace2® is a uniquely low profile, light weight, powered air purifying respirator (PAPR) that combines the high protection of a powered respirator with the mobility of a negative pressure mask. The respirator is cushioned around the back of the neck, counter-balancing the silicone mask and provides the wearer with fresh, clean air, on demand as they breathe. This unique method of personal respiratory protection delivers significant benefits in terms of health, productivity and costs to industry. Birrell says the Commercialisation Australia project opened up these large export markets for PAFtec by supporting the business to achieve certification (CE Mark in the case of Europe) and overcome barriers to user adoption through trials in key industrial sectors. The Company now exports the respirators, masks and filters to over 15 countries through 50 distributors. Australian and export sales are in industries such as mining, manufacturing, pharmaceutical, energy, construction and agriculture. “Importantly, the intellectual property


2014 Australian Technologies Competition

that was created during the project has been protected as part of the Commercialisation Australia Grant and this has given the Company a sustainable competitive advantage in a highly competitive market,” Birrell outlines. The global patented technology and design has attracted several design and innovation awards including the Australian and Internal Good Design Awards, the prestigious British Industrial Safety Award for Innovation, the Preventica Innovation Award in France and was a finalist for Innovation of the Year at the IOSH Awards in UK (IOSH is the largest health and safety organisation in the world).

open for business Accelerating the growth of Australia’s best and brightest innovative small businesses

contestable project opportunities for Australian innovative small businesses identified to date, the Competition provides a platform for increased visibility and places participants on an accelerated path to development. BluGlass Limited, developer of breakthrough semiconductor technology, was the winner of the 2013 Competition. “BluGlass has benefited enormously from the Competition. Winning the top award has been a fantastic endorsement of our technology’s commercial and environmental potential amongst some top innovators in Australia”, BluGlass CEO Giles Bourne said today.

“As a high growth Australian technology company with advanced manufacturing and exports, the grant funding has given the business the necessary speed to market vital for our success,” notes Birrell. “It is challenging to run a lean business while maintaining 100% ownership of the IP, but it is crucial to the creation of strategic flexibility and returning value to shareholders. At the end of the day, the Australian market is an excellent test market for new technology as it leads the way in the safety sector. But the investment in major markets and export sales are the drivers for growth. This is the impact of the Commercialisation Australia Grant on our business. Funds to accelerate market entry and access experienced people have been fundamental to being able to sell in these large sophisticated markets,” Birrell explains. “Our Company and innovative technology needed credibility on the global stage, and the grant helped us to quickly build user confidence to engage large distribution partners. This is the safety industry which is highly regulated and where people rely on reputations and long term relationships. Commercialisation Australia allowed PAFtec to rapidly build credibility through certification, user trials and outstanding training support. At the end of the day, our vision is to provide a high level of personal respiratory protection to all employees no matter when or where they need it,” says Birrell.

For more information go to www.paftec.com

“Our team also gained a lot from the highly focused and valuable mentoring program. You don’t need to win the Competition to benefit from the exposure and mentoring that this opportunity provides. If you are a technology innovator, you must enter!”

ABOVE: BluGlass CEO Giles Bourne

In a market place full of new ideas, it can be hard for emerging companies to stand out from the crowd. An initiative of the Department of Industry led by the Supplier Advocate, Dr Marc Newson, the Australian Technologies Competition builds capability in Australia’s most promising innovative small businesses, connecting them with highly experienced mentors and introducing entrants to new investors and customers. Now in its fourth year, the Competition has been expanded to include innovative technologies from a multitude of sectors. With over $250 million in

Competition finalists undertake a two month mentoring and training program to develop a tailored business plan. A number of Commercialisation Australia’s experienced Case Managers are involved in mentoring the finalists. “The Competition provides entrants with the opportunity to learn from some of Australia’s brightest entrepreneurs and be exposed to invaluable opportunities for commercialisation and expansion, both domestically and internationally,” said Mr Doron Ben-Meir, CEO of Commercialisation Australia. The 2014 Australian Technologies Competition opens for entrants in March.

For more information on how you can participate go to: www.austechcomp.com



DOMAIN: Defence, Safety & Security

the balance of

biosecurity protection Australia is free of many of the world’s most damaging pests and diseases. Our reputation as a producer of clean, green and high quality food has provided Australian agricultural industries with a strong competitive advantage. Colin Hunter, First Assistant Secretary of Border Compliance Division Department of Agriculture

The Department of Agriculture has a critical role in opening up and maintaining international trade and market access opportunities for these industries. Our favourable biosecurity status enables access to new export markets and increases trade opportunities for many of our agricultural products. Managing Australia’s biosecurity system is a big job. Last year more than 30.9 million cargo items, 16 million passengers and 186 million mail items arrived in Australia from overseas. The department works to manage the biosecurity risk associated with the movement of people and goods across international borders to protect Australia’s environment, animal, plant and human health. The department has rigorous and highly effective import declaration, inspection and treatment requirements in place to reduce biosecurity risks. At the same time, the department continues to reflect on our border processes to ensure that we’re not hindering trade where it’s not necessary.

Part of managing our biosecurity system is about being a fair and responsible trading partner in the global economy. This can be a careful balancing act— managing risk to Australia’s domestic agricultural markets, our environment and the industries that rely on it, while also supporting our imports as well as export market opportunities and growth for Australian agribusiness. We don’t tip the balance arbitrarily. We use science to understand the risks and then develop policies and risk mitigation measures to reduce these risks to an appropriate level of protection. This contributes to a strong biosecurity system that supports the productivity of our agricultural sector and provides confidence to our trading partners. On the import side, one of our priorities is reducing ‘red tape’ for importers who consistently comply with import laws. These importers can expect to have goods released more quickly—16 times faster for sea cargo and 100 times faster for air cargo—than those who don’t comply.


In 2011–12, the median arrival-to-release time for compliant sea cargo was about 0.7 days, while non-compliant cargo averaged 11 days. Similarly the median arrival-to-release time for compliant air cargo was 1.2 hours which is more than 100 times faster than the time it took to process non-compliant cargo. Where the biosecurity risks are appropriately managed by the importer and their agents, businesses can expect to save time and money no matter which commodity they import. There are some imported commodities like food, plants and animals that have a higher risk profile and that warrant increased regulatory intervention. The estimated costs of a large foot and mouth diseases outbreak in Australia is more than $50 billion over 10 years. The department works with the industries importing these high risk commodities to ensure that their clearances can be done efficiently, while still managing the associated risks. For example, a fresh produce importer with appropriate


Cargo arriving at the Port of Brisbane Inspecting postal items

documentation demonstrating how they manage biosecurity risks outlined in Australia’s import conditions can expect quicker processing than one of their competitors who can’t show the same risk management measures. Understanding pest and disease risks and their potential impact on Australia’s environment and economic systems underpins our risk based approach. Developing a better understanding of people and their motivations for compliance is the essential next step in managing Australia’s biosecurity system. In partnership with the University of Melbourne’s Centre of Excellence for Biosecurity Risk Analysis (CEBRA), the department is looking at ways to achieve greater compliance through rewards and disincentives. The department is already using systems to assess an importer’s compliance history and apply reduced intervention for low-risk plant product imports such as green coffee beans, dried apricots, dried and fresh dates, and hulled sesame seeds. The next phase in the CEBRA project is to explore how an importer’s enthusiasm to meet Australia’s biosecurity requirements may be influenced by further potential incentives or disincentives. Outcomes are expected to enable the department to develop policies and procedures that will

[images courtesy of the Department of Agriculture]

influence good compliance behaviours into the future. The department also works with stakeholders to manage risks offshore. The department recently entered into a compliance agreement that recognises the cleaning and pre-inspection services of a Japanese company facilitating the movement of used-vehicle and parts exported from Japan to Australia. Under the agreement, pre-cleaned and inspected used-vehicles are subject to compliance monitoring upon arrival in Australia. But the level of intervention will progressively reduce provided the required standards are met. It will deliver significant efficiencies with the clearance of used cars arriving from Japan while managing the biosecurity risk associated with these items, such as mosquitoes and soil contamination.

cost-effective ways. The department’s operational scientists provide both scientific laboratory and field capability. Their role in surveillance detection and identification underpin response mechanisms for pest and disease risk mitigation. Programs such as pest and disease surveillance maximise Australia’s chances of responding to risks and incursions quickly so we can manage and contain the risk before it has serious and wide spread effects on Australia’s industries. The Department of Agriculture has a role in helping to facilitate trade, but it is a careful balance in ensuring that we are managing biosecurity risks in a time of increasing global trade and people’s movements across our borders.

The final, and perhaps most prominent tool the department uses to open trade but reduce biosecurity risks is sciencebased planning, operations and policy. We use scientific evidence to establish the level of risk involved with various pests and diseases, and to allocate our resources appropriately in line with this risk.

We will continue to work with industry and use integrated-science-andeconomics research and advice to encourage compliance through industry incentives and partnerships. We will also continue to look for opportunities to manage biosecurity risks offshore and use science-based evidence to strengthen our robust biosecurity system. Australia’s biosecurity system is everyone’s responsibility.

Sound science and good economics underpin the work of the Department of Agriculture and have allowed us to work in smarter, more targeted and

Find out more about Australia’s biosecurity system. Visit the Department of Agriculture’s website at www.daff.gov.au/biosecurity

valuePROPOSITION wheel spinning that goes on with prospect development; they had numerous procurement challenges through that period that required them to restart the process a couple of times. They were trying to replace technology and they had their own internal processes and challenges. We also had the market impacts and changing dynamics from September 11 2001. But there were also some gaps in our offering that they required but we didn't have, so we had to decide whether to invest in R&D to fix those, because they were potentially a big client.”



Without the assistance of a mentor, making that investment decision was a big call for Rankin and his business partner, which required a careful weighing of the risks against the potential rewards. “We didn't have the contract in, we didn't have the sale, but we made the commercial decisions that we were going to invest our limited resources into trying to fill the gap in the product so it was more attractive to the client,” he says.

murray rankin Leap of Faith

When it comes to selling into the Defence, Safety and Security sectors, says Commercialisation Australia’s newest Case Manager Murray Rankin, few people realise just how drawnout the sales cycle can be. It’s a lesson Rankin learnt the hard way after founding enterprise management software company The Distillery in 1997. For instance, his sales team had to exercise both sales cycle patience and persistence during 11 years of protracted negotiations with one State-based police force - in a dynamic and evolving market - before he had the satisfaction of seeing his Interquest Intelligence Server software go live there. The irony is that Rankin says had a program like Commercialisation Australia been around at the time, the sales cycle would likely have been shorter, and the company might have avoided some significant – and costly - mistakes. “One of my main motivations of becoming a Case Manager was that when I started out there was very little mentoring support available, and it is one of the things that I wished we had back then,” he says. “I was making decisions which were based

on good intent, that were well researched, but that lacked the benefit of experience. “For example initially we spent 18 months developing our core software engine; necessitating a normal fulltime day job and the Distillery night job. We didn't take any capital; we didn't do any fund-raising in those early days, because we wanted to retain as much equity as we could. In hindsight, all that did was slow us down. If we had raised capital earlier and had access to experienced mentors, we could have moved a lot quicker, and when you have got a limited window of opportunity to commercialise something, then you need to get in fast to get ahead of the game.”

“In the end, that decision paid off. It just goes to show that sometimes you just have to back yourself: you have got to make decisions, in a lot of cases, which are as commercially robust as they can be, but sometimes it takes a leap of faith. You don’t make those decisions blindly: you make them based on a whole summation of a number of factors: what's the relationship like with the client? Are they showing the right buy signals? “At the end of the day, the whole start-up cycle involves a big degree of luck, both good and bad. Some things fall by the wayside despite your best efforts. At other times you make a leap of faith and the cards fall your way. And I don't think that's exclusive to start-up world: any business is the same - even the Rio Tinto's and BHP's - things fall their way sometimes and not others. But whatever decisions you are facing, having access to experienced advisors can really help.”

Rankin points out that access to such contacts is even more critical in the security sector than in other spheres, since the nature of the sector necessitates a certain Rankin says while The Distillery did end up raising significant amounts of “understandable paranoia” about the capital down the track, had it done so external companies and people selected sooner the founders would have been to deal with. That means that decisionable to speed development, add addi- makers in the sector will always prefer to tional functionality, move faster down deal with their trusted networks, making cold-calling particularly futile. the sales track and get real market feedback sooner. The good news is that once you make it into such trusted networks you can expect “Why did it take so long from the to find the process of selling into the secinitial contact with that State Police force to the software going live? Sure, tor significantly easier. in the early days it was all about the



“Since their networks into other agencies, both domestically and internationally, are all based on trust, once you are inside, and you are dealing with the client and you are delivering and you've established trust, then they can deliver very powerful on-selling capability and introductory pathways to other prospects,” he says. “That's really important. It doesn't necessarily sidestep the procurement process, because it’s a government process, but it’s all about getting the initial introduction and then starting the selling cycle.”

Extensive Experience Rankin exited The Distillery in 2007, having grown the company as Chief Executive Officer from start-up to 130 staff globally with operations in Australia, the United States, the United Kingdom, New Zealand, Africa, India and Asia. Today, as well as being a Commercialisation Australia Case Manager, he is Managing Director of Rankin Securities Pty Ltd, which has been assisting public and private sector organisations both domestically and internationally since 1997.

The winner of numerous national business awards including the Telstra Small Business of The Year, Australian Information Industries Association (AIIA) iAward - Most Innovative Product, 17th in Deloitte’s TechFast50 and Emerging Exporter of the Year, and an Australia Day Medal for achievements in the national security and criminal intelligence sector, Rankin holds under and post-graduate qualifications in business, organisational psychology and entrepreneurship.

IPscape wins Frost & Sullivan and Deloitte Awards IPscape has won Frost and Sullivan’s Australia Cloud Contact Centre Vendor of the Year award and been announced a winner in Deloitte’s 2013 Technology Fast 50 program. IPscape’s CEO Simon Burke believes both awards provide independent recognition of IPscape’s growing leadership position in the public cloud market. “We are delighted that IPscape has been recognised yet again by Deloitte as one of Australia’s fastest growing companies,” Burke says. “In the Australian market we see an increasing demand from both SME and Enterprise businesses for public cloud solutions which is driven by a greater understanding of the benefits that can be delivered. For example in 2013 our deals included global brands like Publicis Loyalty. Publicis chose cloud over hosted because it reduced cost and gave them direct control over the management of

their contact centre – something that many companies have never experienced before.” IPscape says winning the Frost and Sullivan Cloud Contact Centre Vendor of the Year award also validates IPscape’s leadership position in the public cloud market. These annual awards recognise companies for demonstrating outstanding achievement and superior performance in areas such as leadership, technological innovation, customer service, and strategic product development. The Cloud Contact Centre Vendor award is a new category for Frost and Sullivan and one which recognises the increasing importance of public cloud in contact centre technology decisions.


b.box for Kids turns arty In December the award winning baby bottle developed by b.box for Kids Developments Pty Ltd was selected to be featured as part of the Melbourne Now art installation, which is on display at the National Gallery of Victoria until March 2014. Melbourne Now celebrates the latest art, architecture, design, performance and cultural practice to reflect the complex cultural landscape of creative Melbourne. A completed Commercialisation Australia Participant, the company developed a unique feeding system that integrates the formula dispenser into the bottle itself. The b.box essential baby bottle is more hygienic, faster, practical and space saving.


Rankin is also highly experienced in capital raising for ICT start-ups and early-growth stage companies. He has a keen interest in business planning and strategy development. He has a deep understanding of technology and its enabling application to organisational objectives and outcomes. “Commercialisation Australia can help with both mentoring and with introduction to the right people,” he says. “My aim is to be an effective deliverer of both.” Image courtesy of b.box for Kids Developments Pty Ltd


With extensive senior executive experience gained over a 30 year career, Rankin possesses significant information technology related business, strategy, governance and investment experience in a wide range of ICT enabled industries. He has an established track record in the conceptualisation, implementation, support and review of key business initiatives and technical strategies and the application of disruptive innovation.




Herding sheep

and tranSforming legal services

Fired with an ambition to run his own company by his 40th birthday, but just as determined to avoid putting the financial security of his family at risk, Stewart Rendall made a number of career moves in his early career which his colleagues could only describe as “weird.” A natural organiser who says running things is emblazoned on his DNA the way herding is imprinted in sheepdogs, Rendall – now an Expert Network Member - says he had no desire to become the next Bill Gates or Rupert Murdoch; he simply found the urge to run a business irresistible. “It is just something in my nature and it is pointless to fight,” he says. “It is why the first job I ever did after University, which was running airports in various parts of the world, was such a great job, because it allowed me to herd “sheep” onto planes and off of planes; it was a very obvious thing to do.” Rendall says he knew that going into business would be a risk whatever he did, but he wasn’t prepared to gamble, because he had commitments to meet. He also felt that building something from scratch during a period when venture capital funds were virtually non-existent in the Australian marketplace was too challenging to contemplate without first acquiring the necessary knowledge and experience. “The only way around that was to go out and actually take on roles for which I had to take a huge pay cut because I had no experience, with the objective of building skillsets,” he says.

“I took roles in sales and marketing, because I figured if you can’t sell the blessed thing it doesn’t matter how good you are or how good the product or service is, everything else can be irrelevant - from manufacturing to fulfilment; from support side to HR and Finance,” Rendall says. “To some people these looked like weird career moves, but from inside my head it was relatively straightforward. After working those roles I still needed to build confidence in my business skills, but at least I had the basics. In my own mind, had I not done that, starting my own business would have gone from risking to gambling.” While he wouldn’t necessarily recommend his approach to others, for Rendall the investment in building business competence has reaped rewards. Not only did he succeed in starting his first business by his 40th birthday, he has since created two others and achieved three turnarounds of companies previously agreed by all to be “basket cases.” (Turning around businesses is much harder than running your own, he says, because you have to negotiate decisions with a greater number of stakeholders). These days the founder and Managing Director of Sterian, an Australian-based


IT services and solutions company with clients in Europe, Asia, Australia and North America, Rendall has accumulated more than 30 years’ experience in leading companies; has extensive experience of selling to both the government and commercial markets; and has lived and worked in Europe, North America, and Asia. He speaks several languages and has recently presented a Masterclass in Global Marketing at ANU. He was appointed as an honorary Trade and Investment Ambassador for the Australian Capital Territory in 2011; and as well as being a Commercialisation Australia Expert Network member, is also an Advisor to several Australian Government Departments. Rendall assisted in the development of the ACT Government’s Selling to the US Public Sector Program and, since then, has developed a modular training program aimed at building the capabilities of ACT companies selling solutions and services to the US Public Sector market. From 2004 until 2010, he was MD of a Canberra-based developer of world-class InfoSec application software, hardware and related services to governments around the world. From 2010 he has


very fortunate in getting lots of opportunities with some incredibly talented people who could play that part. “And the final element is the user experience, because you can have the domain, you can have your technology environment, but if you don’t have a positive user experience, it isn’t going to happen,” he says. “So there is no pixie dust. There is the curve, there are the business models, and in most cases it comes down to simple common sense,” he says. And naturally, all of the above does not guarantee success, but rather significantly reduces unnecessary risks. Putting his own words into practice, he recently adopted and combined all of the above in the successful launch of chamberlains.online, where Sterian joined forces with one of Australia’s leading law firms, Chamberlains, to develop a true world’s first - online client access to a law firm’s legal precedents. This is truly transformational as it is the only true alternative to the traditional, and very expensive way of seeking documents and agreements from a law firm. Stewart Rendall

assisted several Australian companies in selling to the US government, particularly in the Defence sector.

No pixie dust Rendall says if there is one thing he has learnt during the course of his varied career; it is that there is no “pixie dust” that can transform a start-up into an automatic success. Even so, he believes, many business people could go much further if they avoided the trap of massively over-complicating something that should be relatively straightforward. “When I looked at the businesses in which I had been employed, I concluded that most were failing to take advantage of a real opportunity to simplify the business, to focus on the basic underlying foundation, and to avoid – to use a favourite phrase of mine – over-egging the custard,” he says. “It was really a case that people did over-complicate the commercialisation of technology, yet business is not that difficult if you build it a certain way. There are eight key issues that need to be considered in the commercialisation of technology – the ‘curve’ or better described as timing; the ‘need’

for a want; the necessity for behavioural change; opening the wallet; domain knowledge; technology expertise; user experience, and finally the business model. “Basically, a lot of it is about timing. There is a curve in every marketplace, and I have seen technologies that have been so far ahead of the curve that they have been brilliant, but they’re too early, and ones which have come along and simply ridden the curve. I have seen companies that have been too late to the curve, and I have seen companies that have had an average technological solution being in exactly in the right place at the right time. “So it is never enough to develop a brilliant piece of new technology: if you follow that path then you have to go and find a problem – far better to start with a need or even better an identified ‘want’. And that need has to be in a marketplace that is growing, and it has to be in a marketplace where people are prepared to change their current behaviour and spend or invest money. “Next you need to find a domain expert, which can be a potential client or a partner organisation, and after that you need a technology partner, and I have been

Rendall says after taking great pleasure in mentoring other businesses in the past it is his own particular brand of common sense which he is eager to offer to Commercialisation Australia Participants. “In those cases it is not as if what you say has a direct line to what the company then does, because the people you advise will take account of what you say, adjust it to suit their own needs and modify it to fit their own circumstances, before deciding whether to implement the advice,” he says. “So it is rare that there will be a direct line between anything you suggest and what is done; it is more that you become one of the causal factors in their future success. “And the brilliant aspect of that is that in most cases you never know whether they have actually taken your advice or not, but you’re doing it in the spirit of not wanting any money for your advice, and having no axe to grind. If you ignore what I suggest or raise, I am not going to be offended: I don’t want to use your company, and I never will. I don’t get paid for this, so I don’t say things to keep my job. I am simply providing frank and fearless suggestions, and answers to questions. I love it,” he says.



DOMAIN: Defence, Safety & Security

Join the expert network Small companies and people new to business often don’t know who to talk to and how to make the business connections necessary to develop their IP. Sometimes meeting the right person at the right time is the key to business success. That’s why Commercialisation Australia is building the Expert Network - to connect our most promising early stage entrepreneurs with the people who can really help. As a member of Commercialisation Australia’s Expert Network you will be the first to find out about some of the best and most innovative early stage businesses in Australia. Members of the Expert Network are free to work closely with exciting young companies, and take up investment opportunities or pursue ongoing business relationships. And being part of the Network will help you stay in touch with the latest technologies and business trends and provide opportunities for you to meet with other high calibre Network members. The Network is looking for seasoned entrepreneurs who are able to help new companies by sharing their own experience of commercialising new IP, experts in specific markets or technologies, and professional investors and strategic corporates who are interested in early stage opportunities. If you think the Expert Network is for you, go to our website and complete an expression of interest: www.commercialisationaustralia.gov.au/ ExpertNetwork

search for

security When it comes to anything to do with electronics, the best approach developers can take, says Perimeter Security Industries (PSI) CEO Ian Bergman, is to assume that everything will take longer, and ultimately prove to be far more challenging, than they could ever anticipate. Take the recent $3.8 million refit of Canberra’s ambulance fleet, he says, where the Canberra Times reported that serious ‘’teething problems’’, including spontaneous shutdowns and inaccurate blood pressure readings, didn’t become apparent until they were introduced across the fleet, despite a rigorous twomonth field testing phase. “The lesson developers should take from that is that you need to test your product at every level of up-scaling, because as soon as there’s any change in the environment an electronic product is operating in, then you can end up with some very strange occurrences. “You have to really understand that trials have to be conducted very carefully, and time must be allowed to test for every possible eventuality.” It is an approach that worked well for PSI as it developed the SecureMat®, a new and innovative approach to protecting the perimeters of businesses, factories, restricted premises and expensive equipment that needs to be stored onsite. The concept involves placing a mat on the ground inside a perimeter fence that can detect any


intruder standing, walking or running across the protected area. As fibre-optic cable within the mats is compressed by the pressure of the intruder(s) standing on it, the light continuously passing through the cable is disturbed and is registered as an alert by the electronics system. The unique combination of reliable detection of intruders with little or no false alarms, at an affordable price is completely new for the market. Other products suffer from prohibitive costs, repetitive false alarms or reliance on expensive human capital. The technology has been developed and patented by PSI and is now operating initial prototypes successfully in realworld environments including the Australian Parliament House in Canberra and at a water storage facility at Red Hill, Canberra. “Anyone stepping on the mat will trigger an alarm and if there is no-one walking on it, it is not triggered by false alarms – cats, possums or rats running across the mat won’t set it off,” Bergman says. He says the company decided to develop the technology about five


above: SecureMat being installed at Parliament House in Canberra; right: SecureMat under mulch [Images courtesy of PSI Pty Ltd]

years ago after testing a number of competing technologies and finding all of them inadequate. It began by testing the concept of sending light through a plastic fibre optic cable and monitoring disturbances. “The project was very technically challenging, with the biggest hurdle involving up-scaling it from a laboratory process into the real world, because the development of algorithms to process the disturbances was quite complex. The early algorithms worked, but wind and rain would cause problems, and it wasn’t very robust. So even though it would work in the laboratory when we put it into field trials, we found a lot of things were causing false alarms – even rabbits – and the early prototypes couldn’t be changed and required a lot of redesign. “The reason is that the outdoor environment is obviously quite challenging - the sun shines and disrupts photoelectric beams, or it doesn’t and there are shadows to contend with, birds flying around, the wind blowing and branches moving around interrupting passive infrared (PIR) beams, so all the existing products are bedevilled by these natural environmental issues.

“While we had the demonstration version of the SecureMat system operating very successfully around two to three years ago, we found that it was very expensive, it was very cumbersome with bulky components, affected by environmental ingress over time and it was very standalone and not able to work in conjunction with existing alarm panels.” Bergman says ultimately the company had to spend 15 months on a total redesign, including miniaturisation of the electronics and a much more “plug & play” approach to integration with target partners and clients existing security and monitoring infrastructure. While the work involved a great deal of effort, it has also come with a major pay off, he says. “In the new system the electronics are more robust, environmentally sealed and now reduced down to about the size of the end of a postage stamp, where they used to be about the size of a small briefcase. The SecureMats can also now connect up to any alarm panel, anywhere and in the most challenging indoor and outdoor environmental conditions.” “Ultimately we spent four years developing this product, with laboratory

testing and field trials all that time,” he says. “Our Commercialisation Australia grant has obviously been very important, and we also used the R&D Tax Concession, which was crucial to us.” Bergman says the company now has an enormous market ready to go, and is forging partnerships with a range of national companies including ADT, ARA Group and Southern Cross Protection. “This means our solution will become part of their solution, and the reason we are very comfortable with that approach is that these companies have got an existing client base, which is generally very unhappy with the existing service, because they get far too many false alarms that have a high callout response and human resource cost. In additions, it heightens the risk of the “crying wolf” syndrome through monitoring personnel desensitisation from continual false alarm. That means our partners really understand that we’re giving them something that can help solve a lot of their problems,” he says.

For more information go to www.perimetersecurity.com



DOMAIN: Defence, Safety & Security


big business can help support Australian security innovation By Michael Stevens-Jones Global Entrepreneur & SmartCamp Executive IBM A/NZ

A healthy innovation culture is critical to the current, and future, performance of any economy. But while this fact is recognised by most major enterprises today, business leaders – particularly those in Australia – must do more to engage with the startups that are poised to transform their markets. Partnerships between enterprises and entrepreneurs offer significant benefits for both sides: access to key decision-makers and new markets for entrepreneurs, visionary perspectives and investment opportunities for established firms. Developing and sustaining these partnerships – and capitalising on the innovation dividends which ensue – is essential to ensuring Australia’s competitiveness in a global digital economy.

Mutually-Beneficial Disruption Entrepreneurial communities are a major source of new innovations which power technological and economic development; they also often act as a barometer for the mainstream

Michael Stevens-Jones

products and services of the future. Yet the barriers to success are high – more than 75 per cent of start-ups fail – and growing rapidly as a result of increasingly global marketplaces of capital and knowledge. Australian start-ups have traditionally only had access to a relatively small pool of local funding; at the same time, entry into more established venture-capital markets in the US and Europe is an extremely competitive and often bureaucratic process. In addition, entrepreneurs tend to have deep expertise related to their “big idea”, but not in terms of other core skills like business development or sales and marketing. Highly promising ideas often fail simply due to a lack of industry connections or business-building experience.


Established enterprises have a responsibility to give these start-ups a leg up – not a charitable gesture, but as a highly strategic initiative which invigorates and complements their own organisations in the process. Many incumbent businesses have yet to embrace an agile, responsive approach to innovation, and failing to do so now is likely to significantly impede future profits and organisational viability. IBM’s latest research into Australia’s digital economy found, for example, that major enterprises which fail to digitally transform by 2018 will have little chance of competing with their more innovative and nimble peers – either being absorbed by them or collapsing entirely. Fostering the next generation of startups is a must for any major enterprise, even those which already have a culture


of ongoing innovation. IBM’s SmartCamp program makes up a core component of our Global Entrepreneur Program, consisting of short (1-2 day) “boot camp” events where start-ups work with IBM experts, venture capitalists, industry experts and academics to develop and pitch their business models. For participating start-ups, the biggest benefits are the in-roads into the enterprise technology ecosystem; this year’s Sydney event brought together judges hailing from some of Australia’s most successful venture capital firms, alongside access to IBM and third-party resources in IT, research, and business development. That means more chances of gaining funding, beta customers, and a commercially-successful product: in its three years of operation, IBM SmartCamps have helped participants raise more than $115 million in VC funding.

Unlocking innovation’s ROI It’s in technology enterprises’ best interests to enable grassroots innovation – including ideas which might otherwise be too ambitious or niche to become commercially viable on their own. Not all innovations will succeed, but fostering an ecosystem of innovation is an opportunity to help participants unlock the full potential of their core ideas by dissecting their business models, streamlining technology implementations, or conducting co-marketing campaigns with our own resources. We view these participants not as start-ups, but as future partners and collaborators whose offerings often supplement or improve on our own. In the case of the Australian start-up and Commercialisation Australia Participant QuintessenceLabs, which jointly won last year’s SmartCamp Asia-Pacific finals, access to enterprise-level connections and resources was critical to the viability of their product: a quantum data security solution designed for the government, security and large enterprise sectors. As a result, QuintessenceLabs has worked to not only refine its network, but to also expand its product portfolio and innovation. The firm is now working out of NASA’s Silicon-Valley research facility to further develop its solution, as well as continuing to collaborate with IBM

on joint platforms which incorporate its technology. The disruptive potential of start-ups can be viewed by incumbent enterprises as a source of fear when in reality, it should be treated as a competitive opportunity. By being involved with ground-breaking start-ups, enterprises can point out new directions and emerging trends to their clients, and justify these claims with tangible examples of product testing and capital investment. It also gives enterprises the chance to further enrich their own range of solutions or product portfolio; and open up new avenues for development which may not have initially been thought of. By partnering with start-ups, incumbent enterprises can catalyse new innovations within their own organisations, simply through exposure to the creative thinking and fresh approaches that entrepreneurs – often having to solve problems with little funding or resources at their disposal – bring to bear.

Kick-starting the knowledge economy As services, IP, and other “knowledge assets” come to occupy a growing proportion of Australia’s GDP, a healthy innovation ecosystem – spanning startups and larger businesses alike – will be essential to maintaining our competitive footing against other regional and global players. The digital economy of the future is also a knowledge economy: to maintain their market leadership, today’s enterprises must discard any insularity and broaden their relationships with start-ups, entrepreneurs, and others at the forefront of innovation. As today’s business leaders, we need to recognise that we don’t have every single answer for every single problem. But by partnering with innovators in a manner which pools the strengths of both entrepreneurs and enterprise, we can ensure the likelihood of new solutions for the future.

Vikram Sharma, Founder and CEO of QuintessenceLabs on the Australian IT landscape for defence start-ups “For advanced security start-ups like ours with major customers in the defence sector, it is critical to have support from industry and government to showcase the capabilities of your technology. The Australian government seed funding programs and other associations have been essential elements in developing frontier-of-science research into deployable technologies. However, in order to commercialise our technology and better understand our market, we needed to take the business to the next level. Collaborating with and receiving mentoring from industry experts has helped QuintessenceLabs to further innovate and accelerate growth. It was a natural for us to want to partner with a technology company like IBM given their long history in defence and security innovation – we have benefited greatly from this partnership.”




for profit

Chris Farquhar, Case Manager

When Case Manager Chris Farquhar set out to market a powerful enterprise solution 12 years ago, he and his partners found that having a great product wasn’t nearly enough. Getting the solution accepted by the very large enterprises it was designed to assist required partnering with an organisation with the muscle and standing to seal the deal.

In 2001, a business partner and I founded a start-up in Perth, intent on growing a global enterprise software business. While we were marketing a powerful enterprise solution, and even had some key clients including a major financial institution on board, it was already apparent that the Australian market was far too small to sustain us. Instead we would need to market our solution to very large enterprises, most of which were headquartered overseas. Considering that back in 2003/2004, the channels and opportunities for market entry into the US, EU and Asia for early stage Australian technology companies were limited; this was a necessity that posed some significant challenges. Even so, we were hopeful of achieving at least some degree of success. Our solution - derived from a key technology and the processes and practices of industrial plant floor control systems - was powerful and effective. Such systems collect thousands of data points in sub-second intervals to safely and automatically operate facilities such as oil and gas refineries, chemical processing plants, pharmaceutical production lines, and pulp and paper mills. Our software applied these principals to non-manufacturing segments such as finance, utilities, retail, security and defence.

It offered a potent value proposition: allowing users to correlate and display the real-time status of electronic infrastructures within critical facilities, data centres, IT and telecommunication; aggregate the data across thousands of devices into one system, and analyse these large data sets. The solution addressed major business headaches like performance bottlenecks, asset utilization and efficiency, correlation of power, IT and telecommunication usage and quality of service issues. This was an attractive proposition to our target customers, the very large enterprises and defence organisations where the sheer size of operations made accurate, real-time decision making in managing electronic infrastructure very difficult. However having a great product was one thing; getting it into the market was another proposition altogether. We were acutely aware that because of their size, our target customers around the world were disinclined to adopt early market technology and engage with smaller companies with limited track records. Many of the companies in these segments were also considering technology solutions capable of satisfying core infrastructure and operational requirements for the next 10+ years. In answer to this reality, we decided to seek international expansion through partnerships or distribution channels rather than establish offices in global locations and enter the market directly.


As a result, in 2004 we moved our corporate headquarters to the San Francisco Bay Area, on the back of a strategic investment by a US software company (that eventually acquired the business). The US Company, boasting a two-decade long operational history and global reputation, provided a very good fit as a key partner for the markets and requirements of our business. We were already using their technology as a critical part of our product offering. As part of the move, we hired a key executive to help lead operations in the US. Soon after the move, on the back of the traction already being gained in the Government sector by that US Company, we got our first major opportunity by way of an introduction into the US Department of Defense (DoD). The introduction provided by the US Company’s sales teams helped us achieve a series of engagements over a number of months, with their regionally based sales people representing our business’s interests when required. We also decided, with the support of our US partner, to hire a sales lead with a successful track record in running key DoD accounts for a leading network device manufacturer. This proved a smart move, making it easier for us to navigate the many diverse programs being operated by DoD and the entry points for our solution. Drawing


on his extensive experience in this area, the sales lead was able to clearly identify and understand not only the partnering opportunities available, but also the key influencers and decision makers we would need to reach, the procurement processes and the regulatory requirements. We found that having access to an established team as a key part of our business development activities, and being able to leverage the US Company’s brand and extended history, made a huge difference to our prospects. It took three years of hard work, including initial meetings, presentations and an extended trial of the software that included customising a solution, but we did eventually reach an agreement with a leading US defence contractor, and then engagement with a key division of the DoD. The investment and resources provided by the US Company proved to be a key element in our success, forged on a collaborative effort from our management, including key US hires, the US Company’s resources, and the product managers and technical engineers that were still primarily located in Australia.

Born in the USA The sheer scale of the project (ten times larger than the largest Australian contract we had) meant that final acceptance of terms and deployment of the software demanded considerable resources from both companies.

One unexpected aspect of engaging with DoD was the requirement that only US citizens be allowed to attend certain high-level meetings. Whilst this requirement was largely an issue during the early engagement phases, when meetings were spread across a number of areas in DoD, it did also cause difficulties during deployment, when we were introducing the software into highly secure facilities. And while our engagement with such a massive agency was expedited by the partnership and investment, it also required us to meet a host of stringent requirements. These included the ability to deliver on stringent warranty terms and to meet rigorous security and escrow requirements, making on-site resources available to liaise directly with the customer and then with engineers in Australia, and 24x7 support requirements. The latter was achieved by integrating support into a full service support infrastructure as was already delivered by the US company in their existing business. Ultimately, the engagement with the DoD proved to be very successful and beneficial, and led to further opportunities in DoD and also other security-focused areas. By 2005/2006 the business was operating as a wholly owned subsidiary and division of the US Company, focused on critical infrastructure, data centres and IT. The partnering approach was used

again to develop a specific solution for the US Company’s existing manufacturing and process industry customer base. The challenge was to find a balance between visibility of data throughout the enterprise and the critical security of the industrial process control network. By partnering with a leading network device manufacturer, including leading network security products, we were able to deliver an industrial security solution to customers across manufacturing, oil and gas and utilities. The solution provided a mechanism (software, hardware and procedures) to allow industrial facility information, such as production output, production performance, product quality data to be shared with enterprise level systems without compromising the facility’s security. The combined resources assisted in architecting the solution and leveraging the existing customer base. The security credentials of the device vendor, assisted in visibility and credibility of the solution in the market, driving market acceptance and adoption. The solution was deployed to key customers in the US, EU and China utilising the extensive marketing and business development resources of the network device manufacturer.



DOMAIN: Defence, Safety & Security

using omnipresence to

protect your On April 16, 2007, on the campus of the Virginia Polytechnic Institute in Blacksburg, Virginia, United States, senior student Seung-Hui Cho shot and killed 32 people and wounded 17 others in two separate handgun attacks two hours apart. Another six people were injured leaping from classroom windows. Cho then committed suicide.

Enter CriticalArc, with a solution which effectively operates like “an external nervous system,” gathering information collected by the sensory functions of smart devices to deliver real-time situational awareness to security staff.

air-traffic controllers, emergency services crews or troops on patrol. In everyday situations, situational awareness is just as critical for ordinary citizens during times of vulnerability. Whether it’s walking to their car in a darkened car park, working back late in the office when no-one else is about, or making their way home from night classes, most people find themselves feeling vulnerable at some time or another, he points out.

“In such critical situations you can either run, hide, or in the worst case scenario, you have to fight. Before you can decide which option is best, you need guidance based on your physical location. Other than ours, there are no systems capable of delivering that guidance.”

By enabling “Omnipresence,” (defined as the ability to be present everywhere simultaneously) CriticalArc’s SafeZone mobile alert system lets organisations manage critical situations more effectively and economically, dramatically changing the way people coordinate in real time to solve real problems.

“While sophisticated command-andcontrol systems exist to support air-traffic, emergency and military operations, until now there has been no holistic approach to gathering the situational awareness information necessary for managing safety in the general community,” Farrant says.

While Australian campuses thankfully tend to be vastly less threatening, security and safety of staff remains a

Farrant says situation awareness is the prime requirement of those charged with handling time-critical scenarios, be they

The Campus Safety system allows users feeling threatened or needing first aid or other assistance to send a location-

Amidst the widespread confusion and panic, says CriticalArc CEO Glenn Farrant, the most daunting issue facing security staff was their inability to get a window on what was happening inside the building. “They didn’t know whether it was one gunman, or many; they didn’t know where the shooter or shooters were, and they didn’t know how many students were at risk,” Farrant says.

prime issue for not only educational institutions around the world, but any organisation with responsibility for the wellbeing of large groups of people.



people based alert to all campus security. The responding team gets immediate situation awareness, enabling effective coordination and faster response to any incident alert.

Gap in the Market A privately funded Australian company based in Wollongong, NSW, CriticalArc was founded in 2011 by Farrant and CTO Jahmai Lay, both experts in mission critical security and surveillance systems. Farrant says the two began developing the SafeZone system after spotting a major gap in the fixed infrastructure security surveillance market. With existing players mainly focused on protecting property, rather than people, the two saw an opportunity to integrate mobile devices into such operations in order to solve problems in real time. “We saw customers looking to have mobile visibility into what’s happening around their sites and we saw that the big companies, with their big investments in these fixed infrastructure systems, (the security vendors, I am talking about here) weren’t making the move to creating mobile solutions,” he says.

“The focus was on property, and their business model was installing equipment on site and servicing that equipment. Once you begin to integrate a mobile solution, you have got to be connected to the Internet, you’re talking about cloud services, you’re probably talking about subscription models rather than a capital expenditure project type of model; it is a very different business model.” CriticalArc has already launched SafeZone at Curtin University, University of Wollongong and the University of Newcastle. Farrant says since the company also has its sights firmly fixed on the international market, the Commercialisation Australia grant has proved instrumental in helping identify the opportunities both within Australia and overseas. The market analysis, conducted with the assistance of Case Manager Pat Mooney, identified Australia and the UK as primary markets with SE Asia as a third target. Of the 15 prospects identified by the study, ten have turned into requests for a proposal after the CEO spent time in the UK market – a remarkable hit rate.

Joy Brown / Shutterstock.com

“We contacted UK Universities and then, off the back of that, in early 2013 I started travelling to the UK to follow up: to confirm the need for the product in the UK, confirm that conditions were similar to Australia and so on. “Now we are looking at closing our first sale into the UK,” he says. “The other thing we got from the grant was a great review of the IP landscape. We’ve raised capital this year and one of the things that the investors really appreciated was that the depth of the intellectual property review that was done gave them comfort that we had a good position that wouldn’t be challenged by patents. So clearance to operate was a very big factor in our investors’ minds. We wouldn’t have really done that had we not had the Skills & Knowledge grant, either,” Farrant said. “The grant also funded the assistance of a Trade Mark Attorney, who encouraged us to apply for a Trade Mark. We wouldn’t have gone to the expense otherwise, and that has turned out to be very valuable,” he said.

For more information go to www.criticalarc.com



DOMAIN: Defence, Safety & Security


TECHNOLOGY TRaNSFER Dr Alex Zelinsky Chief Defence Scientist, DSTO

The prime focus of research at the Defence Science and Technology Organisation (DSTO) is to keep Australia’s defence and national security capabilities at the leading edge. The transfer of DSTO research outcomes ensures that the technology transitions into equipment and resources for the Australian warfighter. In recent decades, Western nations have become increasingly averse to sending warfighters into battle without the best protection possible. It was this type of thinking that spurred the development of a highly successful DSTO development known as the ‘Off Axis Viewing Device’, essentially an extension to a rifle sight which allows soldiers to “look around corners” and engage targets. Success followed quickly with the commercialisation of the device which is now marketed worldwide by Swedish company Aimpoint, with royalties coming back to Australia and DSTO. This ‘around the corner’ capability has attracted sales of about $1 million in three years amid praise for its simplicity and the enhanced safety it delivers to warfighters. Robotics and automation technologies offer new ways of keeping warfighters out of harm’s way, for example, minimising their exposure to Improvised Explosive Devices (IED). DSTO research into remotely operated robotic systems in partnership with Deakin University has developed a novel technology which allows an operator to remotely ‘grasp’ a suspicious object, feel its weight, texture and other physical properties in real-time from a safe distance. The technology has been licensed to Deakin University for further development and commercialisation.

In this particular example the commercial arrangement has been motivated by the need to develop indigenous Australian capability in a dual-use technology area. DSTO receives no royalties, but has access to the technology for Defence use. Such arrangements underline DSTO’s approach to technology transfer – we are not driven by commercialisation revenues. Rather we pursue the technology transfer method that yields the best long-term outcome for Australian Defence. When Australian troops are operating in theatres of war the time taken to transition research into warfighting capability becomes more urgent. The best outcomes have been achieved when DSTO has worked closely with industry. A good example of collaborative partnerships yielding positive outcomes has been the Diggerworks initiative. Australian soldiers in Afghanistan reported difficulties with the weight of their body armour and the associated negative impact on operations. To find a quick solution the Diggerworks initiative started a collaboration between Army, DSTO, the Defence Materiel Organisation and Defence’s Capability Development Group. Diggerworks engaged with the Defence Materials Technology Centre (DMTC), a Defence-funded Cooperative Research Centre. DMTC brought together diverse expertise from its university and industry partners, including the CSIRO.


The result was that a high-performance body armour ensemble was delivered in quick time, with Bendigo-based SME, Australian Defence Apparel (ADA), manufacturing and supplying high-technology moulded ceramic armour for the Australian Defence Force (ADF). Experience with DMTC demonstrates the effectiveness of collaborative partnership arrangements – our preferred method to ensure that technology solutions incubated in the laboratory are fast-tracked into effective assets for the ADF. DSTO has an extensive track record of developing Defence capabilities jointly with industry for adoption worldwide. This includes the Nulka anti-ship missile decoy in partnership with BAE Systems Australia. With export revenues in excess of $1 billion, Nulka has been Australia’s most successful defence export. Other examples include composite bonded technology for repairing aircraft structures (marketed by Helitech Industries), the Australian Minesweeping System (another Australian export success marketed by Thales Australia), the Laser Airborne Depth Sounder for coastal surveys, and the Starlight computer security system, both marketed worldwide by Tenix, now BAE Systems Australia. The Defence Capability and Technology Demonstrator program, managed by DSTO, is another avenue for devel-


DSTO’s Off-Axis Viewing Device allows soldiers to engage with the enemy without exposing themselves. Marketed worldwide by Swedish company Aimpoint. [Image courtesy of DSTO]

oping innovative solutions for Defence challenges. The program provides funding for industry to develop technologies that can open up potential new markets for the private sector while supporting the development and sustainment of Australia’s defence industry base. Since the program began in 1997, DSTO has invested $263 million in 112 projects with half of the projects proposed by Australian small-to-medium enterprises. As part of its strategic planning process DSTO recently reviewed its business development and commercialisation function to seek improvements that could assist in accelerating the uptake of technology and knowledge into Defence capabilities. This has led to a comprehensive, long-term strategic approach aimed at enhancing external engagement, intellectual property management and technology transfer. DSTO continues to proactively seek external partners and commercialisation opportunities to help deliver its outcomes to the ADF. We maintain an Opportunity Pipeline supported with regular interactions with partners and peer organisations such as Commercialisation Australia. This includes hosting an innovation forum to bring together industry, universities and research organisations for generating innovative proposals for Defence.


valuePROPOSITION Image courtesy of DSTO

Image courtesy of Department of Defence

ABOVE LEFT: The haptic robot arm to be further developed and commercialised by Deakin University. ABOVE RIGHT: Nulka, the active missile decoy was conceived by DSTO and developed jointly with the US, now marketed by BAE Systems Australia.

DSTO is seeking to play a stronger leadership role in the Defence innovation system. Currently Defence runs a number of programs, such as the Capability and Technology Demonstrator Program and the Rapid Prototyping, Development and Evaluation Program, all aimed at developing solutions for defence capability. To improve the transition of innovative ideas between these programs as well as into fielded capability, DSTO is assisting Defence in integrating these independent programs into a better coordinated innovation program. This approach will include the improvement of transition paths that link potential innovation solutions to future Defence acquisitions. Transitioning addresses further technology development arrangements and commercial considerations such as export potential. A Defence

Innovation Realisation Fund has been established to fast-track technology at various stages of development through to defence capability. Strategic alliances are being put in place with industry, universities and research agencies to create broader pathways for technology transfer. These alliances outline the intellectual property arrangements upfront with a clear distinction between ownership and use. This approach means Defence will only require access to IP for “use” except where “ownership” is required by international agreements or national security obligations. Similarly, DSTO processes and systems are being streamlined to remove barriers to collaboration, making it easier for others to do business with DSTO. Our research-

ers are also being placed into industry and R&D agencies for periods of 12-24 months to improve their business skills and experience. Most importantly, DSTO is seeking to build deeper and long-lasting relationships with industry and R&D providers. By partnering widely with industry and R&D providers DSTO seeks to become a better integrator of innovation. Through partnerships DSTO will improve its abilities for integrating knowledge and best practice to deliver innovative solutions and world-class outcomes for Defence and national security.

For more information about DSTO go to: www.dsto.defence.gov.au

Update In February it was announced that DSTO and IBM Australia had formed an alliance to collaborate on research into cyber security, analytics and cognitive computing. “The alliance is an opportunity to strengthen the ADF's capabilities in cyber security,” Chief Defence Scientist, Dr Alex Zelinsky told PS News. According to PS News the agreement was signed in Canberra between Dr Zelinsky and Director of IBM Research Australia, Mr Glenn Wightwick. “This alliance means the two organisations will collaborate in the highly specialised technology

areas of cyber security, analytics and cognitive computing,” Dr Zelinsky said. “The alliance is an opportunity to strengthen the ADF's capabilities in cyber security. “Both organisations have deep expertise in these areas and it is a natural fit that we work together in what are some very promising defence-related areas of research.” Mr Wightwick said IBM welcomed the collaboration. “IBM has a long history of driving innovation from the invention of the barcode to the creation


of cognitive computing systems that learn and interact naturally with people to extend what either humans or machine could do on their own,” he said. “Our researchers push the boundaries of science and technology to make the world work better. “IBM has a strong relationship with the Australian Defence Force and we are pleased to be able to collaborate with DSTO on this important work.”

As reported in PS News on 4 March 2014, www.psnews.com.au


Nigel Hennessy Nigel was educated in the UK at Reading University where he gained a BSc(Hons) in Cybernetics with Subsidiary Mathematics. He also graduated from Dartmouth Royal Naval College as a Lieutenant in the Royal Navy.

In 1983, Nigel moved to Australia, although his very high security classifications kept him from working in the defence sector for several years. Instead he started work as a Divisional manager in a software systems company before going to Fiji in 1987 (during the first coup) to develop the Native Title System for the Native Land Trust Board in Suva. After the second coup in September, the funding for the project dried up and af-

This company worked in spatial systems and in real-time defence and security. EASAMS grew rapidly and was eventually sold to GEC Marconi when the staff base hit 140 engineers and the order book topped $50 million. After a short diversion into a spatial systems business, Nigel started with BAE Systems in Adelaide, as General Manager of the defence systems group, which rapidly expanded to more than 3,000 engineers. He was then appointed Sales Director of the company and continued in that role till he left the company and joined Adacel in Melbourne as they were listing on the ASX. This was then followed by the MD role at SIMOCO Pacific in Melbourne and later by the MD role at CCN Ltd in Sydney (ASX300). He also worked as chairman during the merger with Cabcharge Australia Ltd. In 2002, Nigel moved into Private Equity working with a family fund in Melbourne before being appointed the CEO of Agrilink Group Ltd in Adelaide. Agrilink was a data acquisition and analysis company working in agriculture irrigation and agronomy. Nigel re-directed the company and changed its name to AquaSpy before mov-

ing the business to California. Nigel then ran the business in the US and secured contracts with Monsanto and a number of other clients before appointing a full-time US President and CEO in 2009. He also set up a Golf business with Australian golfing icon Bruce Devlin. On returning to Australia, Nigel was asked to assist with the foundation work on Water Australia and became a director of that organisation as well as working with the committee putting together the Goyder Centre in Adelaide. After an extensive career in marketing and business management coupled with some good knowledge of private equity and venture capital, Nigel became a Case Manager with Commercialisation Australia in 2010. His other interests and roles include Chairman of CtechBA (a boutique Private Equity Firm), director of Southern Phone Limited and a committee member of Sydney Aerospace & Defence Interest Group (SADIG) to help promote defence business in western Sydney. Nigel lives in Sydney and occasionally in Adelaide. He has a wife (of 41 years), two adult children and four grandchildren.


The first 11 years of Nigel’s career were very much defence intelligence focused. He worked for three years on the development of tactics surrounding the introduction of the acoustic towed array into the Royal Navy submarine fleet. He then worked as a meteorological and oceanographic forecaster on a commando carrier in the North Atlantic before moving into Polaris Operations at MoD in London. Nigel was responsible for Operational Analysis of Polaris ballistic missile submarine (SSBN) missions and was also a ‘sea-rider’ with the fleet. Later he headed up the Absolute Sound Pressure Analysis group at N3 Division at Teddington, Surrey. In this role Nigel ran several programs for data collection and also managed some of the fixed acoustic sites in the Baltic Sea.

ter presenting the system to the Great Council of Chiefs in December 1987 he returned to Australia and started a new systems company – EASAMS Australia.



DOMAIN: Defence, Safety & Security

Selling to the defence Nigel Hennessy, Case Manager

The objective of commercialisation is to make sales. Selling is never easy since you must be able to meet a number of objectives, both real and imaginary, to close the sale. The Defence Sector, like many large corporates or government agencies, is subject to a highly structured purchase process that almost always involves a competitive tender in the form of an RFT (Request for Tender), RFQ (Request for Quote) or RFP (Request for Proposal). Companies that respond to such requests often become part of an assemblage of proposals: it is not uncommon for each Request to receive 10 or more compliant responses. However, there can only be one winner and often “Bang for Buck” is the most critical component to the evaluator. Against this huge competition and customer focus on price, how can a company succeed in the Defence Sector? These are my Top 10 Tips:

Tip one Understand customer needs Many companies trawl through tender notifications advertised in the press or online and tender for projects they know little about. It goes without saying that this is a weak strategy. At best it’s a waste of time; if the project is won on price, it is also highly likely to be a very costly experience for the tenderer because the price was almost certainly set too low. My advice is to only tender for projects that you have prior knowledge of and those where you have already discussed solutions with the customer. You must have a deep understanding of the customer and its needs, rather than merely its specified requirements. Conversely, the customer also needs to have an appreciation of your capabilities.

Tip two Take advantage of the procurement process The Defence Sector typically uses a staged tendering process which starts with a Registration of Interest (ROI). This is used to firm up specifications and also to determine budgets. It often means the RFT is another year away, so the ROI is a good opportunity to get to know the customer and influence user requirements which will later be included in the RFT. The early stages are also important because the Defence Sector often uses this process to create a shortlist of suppliers to receive a restricted RFT.


Tip three Know who is evaluating Evaluators outside of the Defence project office will often be used to assess parts of shortlisted responses. As a tenderer you should know who they are and what their drivers are going to be. Since these people are major influencers of the final outcome, you need to understand third party influencers as well as you understand the customer.

Tip four All that glitters... You need to understand that Defence will frequently negotiate with more than one responder to an RFT. Don’t get too excited by questions or even early negotiations; it doesn’t mean much more than that the evaluation is progressing. On the other hand, if you don’t get any questions, you can safely assume your offer isn’t even under consideration.

Tip five Understand what you are selling While this may seem an odd comment, in my experience far too many tenderers try to sell what they have, rather than what the customer needs. Instead of writing their proposal with the customer’s perspective in mind, they deliver a sales brochure. It’s natural to want to talk about your products and to focus on what you see as their best features, but those features may have no relevance to the customer. For instance former Commercialisation Australia Participant Marathon Targets (formerly Marathon Robotics) has developed the world’s first smart targets for live-fire training, powered by cutting-edge robotics technology and delivered in a bullet-proof, easy-to-use package. Since Marathon’s targets enable armed forces to train with an unprecedented level of realism, Marathon emphasises “moving targets” rather than “robotic solution,” because the customer doesn’t care how the outcome is achieved, but does care about the outcome.

Tip six Know Your Competition Your product or solution does not exist in a vacuum. Too often tender responders get carried away with their solution


sector and forget about the competition. If your competitor has a key Win Theme (ie. a key differentiator which delivers the value proposition), you can be certain they will promote that vigorously. That can be quite damaging to your chances unless you counter it in some way. Before responding to a RFT it is good policy to make note of all your Win Themes AND those of your competition. In your response you will need to promote your own themes and discount your competition’s (without mentioning products or names). You also need to dispassionately evaluate any weaknesses in your own solution, particularly those that may give your competition a chance to undermine your proposal.

Tip seven Spend Money to Win Money Always cost a tender proposal as you would any other project. Your proposal budget should reflect not only the cost of the product, if one is offered, but also labour costs, expenses and lost opportunity costs. There are certain rules of thumb that apply when determining proposal budgets. For projects around $1 million in value you should expect to invest four per cent of that amount into winning the tender. Smaller projects ($100,000) will need proportionally more money and the percentage can rise up towards 10 per cent. Larger projects, say $1 billion, will need around two per cent ($20 million) as a bid budget. Cut costs at your own risk, since the chance of winning is often directly proportional to the level of investment. As a rule you should consider a 33 per cent win-rate a good outcome. So every $1 million project won will roughly translate to an investment of 12 per cent, or $120,000 (since you are likely to win only one out of every three projects you bid for). So when you calculate your costs, this ‘extra cost’ must be taken into account so that your margins are not eroded. In my view consistent failure to do so is one of the reasons why we see few highly successful Defence businesses in Australia. Few companies get the balance right. They either cut their bid budgets, thus reducing their probably of winning, or worse, they skimp over the risks and the cost analysis and put in a price so low that winning a project translates into a financial loss.

Tip eight Monetize Contractual Risk The terms of contracts imposed by the Defence Sector are often one-sided and may impose unlimited liability on a company. Before complying or accepting any term, ensure that all the terms imposed by your customer are mirrored in your contracts with any sub-contractors. Contract

management is about assessing risks and mitigating those risks as best as possible. Some terms can be flowed-through to subcontractors, others may be covered by insurance policies and the remainder need to be costed and assessed. Always undertake a risk analysis and determine a reasonable contingency that will need to be added as a cost to your proposal price. When companies lose money on projects, it is often because they have either not assessed the risks very well or they don’t have sufficient (or in most cases ANY) contingency.

Tip nine Manage the Process Diligently The tender management process must start early, ideally well before a tender hits the press (maybe a year before). Undertake a win assessment and only target tenders which you firmly believe you have at least a 1:3 chance of winning. Continually assess and keep a running tally on your win probability and try and see what can be done to improve your chance of a win. At EASAMS and also BAE Systems I developed a methodology that raised the win rate to more than 65 per cent. This was achieved by: being very selective on what we tendered for; converting weaknesses into strengths; picking the right partners; and knowing the customer and all relevant decision makers and influencers. This was all put together into an overall management system that allowed me to analyse, assess and take appropriate actions. Never be afraid to discard a project early if you think it’s probability of success is dropping below some cut-off value. The cut-off value I used was 30 per cent at the start and 50 per cent towards the end of the tendering process. Managing a tender response is just like managing any other project. The one key difference is that the Tender Due date rarely slips, and therefore the last deadline never changes. You must finish the project on-time. Assemble the team around Authors and Book Managers and ensure that the tender response is structured appropriately and focused on the requirements of the customer and the needs of their assessors.

Tip ten Bang for Buck! Defence is very price sensitive. Buyers in this space are always seeking the best at the lowest price: ie. more “Bang for Buck”. The three main criteria are always: Cheapest (lowest price); Compliant (meets all the specifications and the commercial terms); and Credible (is the company/solution believed or credible?). You can only earn credibility if the customer knows you well. If you follow the above tips, I am confident you will find Defence a good sector to target. We wish you well!



Image courtesy Department of Defence

DOMAIN: Defence, Safety & Security

unlocking industry opportunities The Defence Materiel Organisation (DMO) relies on the hard work and innovation of both Australian and international defence companies to deliver equipment and associated maintenance and support requirements to the Australian Defence Force (ADF). When talking to industry representatives, DMO executives often explain that there are many opportunities for defence companies to get involved in its projects. The DMO is particularly interested in working with companies that understand how to be efficient, effective and innovative, and how to deliver on promise. For these kinds of industry suppliers there are a range of ways to increase their business opportunities with the Australian Defence Organisation, from taking advantage of industry update sessions, to registering with the Defence ePortal and engaging with the DMO in early industry soundings. Over the last 12 months a number of defence industry companies have made the most of these kinds of opportunities within the Land Systems space. According to the Director General of Land Support Systems, Sarah Myers, engaging with industry early is an important part of bringing projects on line. “We’ve held a number of industry briefing days to generate interest and unlock

competitive and innovative approaches to meet Army’s materiel requirements,” she said. “Over 150 companies have attended sessions on a variety of DMO projects from acquiring counter-Chemical, Biological, Radiological and Nuclear Defence systems and protective gear, to night fighting equipment and bridge capabilities. “These industry sessions provided overviews on the various projects and information on the tendering processes and also enabled companies to ask questions and give feedback. “Our ongoing engagement with industry is an investment that is paying off for both sides. It improves our understanding of industry capability and any potential issues, and gives industry a better understanding of our requirements.” These kinds of industry update sessions and briefings happen on a regular basis for a variety of DMO projects so that companies can stay informed about upcoming opportunities.


There are a few other things that Australian industry suppliers can do to either begin or enhance their business with Defence, whether they will eventually enter into direct contracts with the DMO or Defence, or become subcontractors to an existing Defence supplier. Companies should make themselves known to the DMO through either the Defence ePortal or through the DMO’s network of Business Access Offices. They should also be Defence-ready by engaging with Defence in early industry soundings on tenders and by embracing efficiency and new ways of doing business. It is also critical that industry companies bidding for Defence work submit compliant tenders. While this may sound obvious, simple mistakes can make tenders void and restrict companies from progressing through to a project’s technical evaluation phase.

More information on industry events, opportunities and Defence contactsis available on the Defence and Industry ePortal at www.dplusi.defence.gov.au



Commercialisation Australia

As at 21 February 2014, Commercialisation Australia has assisted 503 companies and researchers with grants in excess of $213 million.

Commercialisation Australia is an initiative of the Australian Government. A competitive, merit-based assistance program, it offers funding and resources to accelerate the business building process for Australian companies, entrepreneurs, researchers and inventors. It does this by supporting the final development, commercial validation and commercialisation of novel intellectual property (IP) into new products, services and processes. Early stage entrepreneurs often find it difficult to raise capital. Commercialisation Australia addresses this by providing a range of grants to best meet their stage of business development: •

The map shows the distribution of assistance throughout Australia (number of Participants):

3 134 63 34


Skills and Knowledge grants of up to $50,000 to help people

15 (ACT)

new to business access specialist advice and services


Experienced Executives grants of up to $350,000 to enable

Proof of Concept grants of up to $250,000 to prove the commercial viability of a product

The graph shows the proportion of funding by primary target market:

Early Stage Commercialisation grants of up to $2 million to

Textiles, Clothing & Footware


businesses to engage their first CEO or other senior executive

bring a new product or service to market.

However, business success requires more than money. Successful entrepreneurs have access to the right people, information and opportunities at the right time. Commercialisation Australia addresses this by partnering all successful applicants (Participants) with a Case Manager and providing them with access to our Expert Network.

Case Managers are successful business builders in their own

right, with direct experience in commercialising IP and the ability to provide substantial assistance to Participants in developing their entrepreneurial capabilities and business networks. While Participants work closely with an assigned Case Manager, they also have access to the collective skills, experience and domain expertise of the entire network of 26 Case Managers around the country.

The Expert Network reduces the degree of separation between

Participants and the people they ideally should meet. The Network comprises successful entrepreneurs who have commercialised new IP; domain experts with specific market and/or technological expertise and Professional investors and strategic corporates with a focus on early stage, innovative business. Over time the Network will grow in depth and breadth providing all Commercialisation Australia Participants with a significant resource for adding value to their businesses. This infrastructure provides for a virtuous circle as successful entrepreneurs look to give back and can channel their interest through the Commercialisation Australia portfolio.

OEM Infrastructure & Building Health & Medical Entertainment, Tourism & Sport Energy, Mining & Resources Education & Training Defence, Security & Safety Business & Communications Automotive, Aviation & Marine Agriculture & Food

The chart shows the proportion of funding by key technology: Biotechnology Manufacturing, Engineering & Design Software & Web Design Computer Systems & Hardware

© Commonwealth of Australia 2014 Unless otherwise noted, this publication is licensed under a Creative Commons Attribution licence (CC BY). All rights in the materials listed below are reserved: •

Commonwealth Coat of Arms

All organisational trade marks and logos

All images

Unless otherwise noted, all images are supplied under licence by Shutterstock.com. Disclaimer: To the extent permitted by law, the Australian Government, its employees, agents and consultants and the compilers of this document, expressly disclaim all and any liability for any loss or damage (including indirect special, or consequential loss or damage) to any person in respect of anything and in respect of the consequences of anything done, or omitted to be done, by any person in reliance, whether in whole or part, upon the whole or any part of the contents of this document. The document includes trademarks and names; use of those marks/names is with the permission of the owners and does not imply ownership or endorsement by the Australian Government.


Profile for Value Proposition

Value Proposition March 2014  

The fifth edition of Commercialisation Australia's Value Proposition magazine looks at the defence, safety and security sectors.

Value Proposition March 2014  

The fifth edition of Commercialisation Australia's Value Proposition magazine looks at the defence, safety and security sectors.