Graham Sowden
Mark Pretty interviews
Graham Sowden, Asia Pacific & Japan Vice President - Mercury
Prior to the recent acquisition of Mercury by HP, Graham Sowden was instrumental in the phenomenal growth of Mercury across Asia Pacific. We were keen to see how he adapted his style to emulate the success in Asia Pacific that he’d had elsewhere.
MP: “Can you give us a picture of the growth in Mercury in your region since you took on the role?”
GS: “I took Australia from revenues in low single digit millions to over US$40 million with less than 40 people in under 3 years. We then adopted the same principles for the region and last year we hit a run rate of US$76 million with 250 people. The Australian business continued to deliver very well with a much smaller team largely through our ability to win some very large enterprise deals. I think that’s key to gaining market share fast.”
MP: “How did you go about learning how to do business in Asia and how have you adapted your style?”
GS: “It was a bit of a change for me. I found I was expected to be more prescriptive in Asia. In Europe and Australia, I found it was better to get a collective agreement and gain input from others. In Asia I sensed that approach was viewed as weakness; almost as if they were saying “Graham is asking our opinion so he mustn’t have confidence in what he’s doing”. I’m not sure I’ve still quite got it right in China…but I’m working on it!”
MP: “I detect a Northern English accent there…Liverpool? Have you found it hard to be understood in Asia?
GS: “At least the days of being asked about the Beatles have ended! Haven’t found it an issue really. A good sense of humour is pretty important though.”
MP: Australia seems to have been a consistent high performer for you, why is that?”
GS: “We built the strategy early to target the very big deals and we got the best people on our team. I think that’s what really made the difference. We were seen by the market to be able to execute large deals so it gave clients the confidence in us.”
MP: “Which geographies did you focus on first and why?”
GS: “As I said, we started first in Australia and Singapore and built from there. It was easier to roll out and we didn’t need to worry about double-byte issues. It was also obvious that we could get some wins and the revenue allowed us to build out the region. Would I do that again – yes I probably would. The ex-pat costs elsewhere in the region can hit pretty hard so I’d prefer to wait and get locals in each geography if I can.”
MP: “What mistakes do you think were made in the early days in setting up A/P?”
GS: “Mercury started out as an Israeli company and we kicked off early by shipping over a few talented Israelis to each geography to get things going. None of them had any experience in Asia Pacific and it just didn’t work. You have to understand by country how they approach doing business. Experience is everything. Each country ran like its own little fiefdom and no-one really cooperated. That had to change.
MP: “What have been the leadership challenges and have you struggled to find the talent you want across the region?”
GS: “Getting everyone working together was the start. Also, getting to grips with China. We commissioned a Mckinsey study and found that 93% of Mercury software in China was pirated. In other words, the pirate companies were out-selling us by about 14:1. We were forced to take a look at our licensing model and gain corporate buy-in to a strategy to deal with this. It was tough but we were slowing getting there by wrapping the software and services as a solution “bundle”.
MP: “Have you had full support and understanding from your US management team and have you found they understand your region?”
GS: “The tough one was gaining an acceptance for the need to modify our pricing expectation for the region. There was a high degree of sympathy at an intellectual level but then there were still revenue numbers to do. We had to try and reduce expectation on the likely per unit pricing. In China, we were asked to run a stress test for a Local Government for 100,000 users. When they asked for a license for that many it came to US$10 million and there was just no way they’d pay that when they could get it for a fraction through the pirates. So we had to go for market-share with a plan to have an amnesty down the track with the pirates.”
MP: “What are the most striking differences for you between the European market and Asia Pacific for a growing IT company?”
GS: “Really the differences in culture and behaviour. It is very different working through a partner as we had to in Korea and Japan. Most clients expect you to work hard to build the relationship and put in a lot of resource before they commit too much. Almost as if they are testing you and testing your company’s commitment. Once you have the trust they really respect you and you have a client for life”.
MP: “What three tips would you give a new company in the software space entering the APJ region?
GS: “First, where possible get local heads running each country. In a perfect world, get someone who has been educated internationally and will fit your culture. Understand also that the model for each country has to be different. In Korea for example, you have to work through the key Chaebols [LG,Samsung etc]. You’re still selling to the end client but they control many of the deals. Same to an extent in Japan. Finally, work out a pricing model that allows you to be successful in each geography even where you are selling through multiple partners. Above all else, be patient. You can’t expect to wheel in a VP for a senior meeting and bring deals forward; it just doesn’t happen like that”.
This interview was conducted by Mark Pretty, an Asia based Director of Mosaic Global Executive Search at the BSP Sydney offices on 30 January 2007.
