Country Report: United States

US infocomm market: Understanding the potential and the pitfalls

Singapore infocomm local enterprises (iLEs) can expect stiff competition in the United States (US), but the market is huge and the environment is largely transparent in terms of business practices
and opportunities.

San Francisco
IDA's US office, located 30 minutes south of San Francisco, provides support to Singapore iLEs.

Sharing his insights into the US market, Mr Joachim Ng, US Country Director of the Infocomm Development Authority of Singapore (IDA), said enterprise customers in the US tend to be "quite sophisticated and well informed and therefore able to differentiate between good and poor products".

"Enterprise customers are also more willing to give a chance to startups and foreign companies as long as the product is better or cheaper - compared to customers in Asia markets who tend to stick to the established brands," he said. However, Mr Ng cautioned that Singapore iLEs may find that it is an expensive market to penetrate. Underestimating the costs of doing business in the country, and a lack of alignment between an iLE's products and services and the needs of the US market, are some of the more common pitfalls.

"Many local companies do not have the resources to take on the US market or have products or services that are more suited to developing countries and therefore cannot compete in the US market," he said. "Companies should be prepared for significant outlay as they start their operations in the US."

Commitment to the market, in the form of setting up a local presence, is a must. "Without a US registered address, it's almost impossible to get a business contract," said Mr Ng.

This is where IDA's US office can help. The US office was set up in early 2000 and is located in Redwood City, 30 minutes south of San Francisco. It provides support to Singapore iLEs with compelling products or services that are able to compete in the US market, facilitates business partnerships and helps introduce these companies to venture capitalists in the Valley.

IDA's US office helps to host promising iLEs within its office business centre. There are currently four companies that are actively using the centre. The four - SecureAge, Muvee, Hiperware and Progeniq - pay a small monthly fee and are given access to the "hot desking" business incubator space. The US office has also helped these companies as well as others to get plugged into the local business community through introductions and meetings.

As the IDA's "eyes and ears" in Silicon Valley, the US office also maintains relationships with non-government organisations like the United Nations and the World Bank, which are involved in e-government programmes in developing countries. Another good platform for business networking is the Singapore American Business Association.

The IDA US office also has close ties with many of the global IT MNCs such as HP, Oracle, Google and Microsoft, and is in touch with a number of leading venture capitalists in Silicon Valley.

The IDA's US office

  • Supports Singapore iLEs who are trying to extend their markets to the US. This includes hosting promising iLEs within its office business centre.

  • Facilitates US companies - including US-based startups - in setting up operations in Singapore.

  • Maintains strategic relationships with local governments, business associations, non-government organisations and multinationals.

  • Provides IDA with its "eyes and ears" in Silicon Valley which is the global hub of infocomm innovation.

Contact details: 3 Twin Dolphin Drive, Suite 150. Redwood City, CA 94065; Tel: 650 654 1716; Email: info@ida.gov.sg.

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Progeniq: Think and go global from Day 1
Mr Chua Teck Hiong Mr Chua: Progeniq is targetting new compute-intensive industries.

Progeniq (www.progeniq.com) is a leader in reconfigurable computing applications for accelerators in hybrid computing, with its BioBoost line of products for the life sciences industry already adopted by institutes worldwide. Today, the company is leveraging the Boost Platform to introduce reconfigurable computing into new compute-intensive industries, increasing the efficiency
of computing systems, boosting performance and
slashing costs.

Earlier this year, Progeniq set up a presence in the
United States, using the incubator facility at the
Infocomm Development Authority's US office. Mr Chua Teck Hiong,
Vice President of Business Development, talks about the company's
expansion plans.

Why did you venture into the US market and how did you do it?
Singapore is a very small market for Progeniq, so we targeted global clients from Day 1. Our first venture into the US market was to exhibit our products in Apple's Worldwide Developer Conference in San Francisco in 2006. Subsequently, we had trial clients, clients, partners, and resellers working with us from the US.

We started working with IDA's US office on our trips in 2006 and 2007. IDA US understood the needs of Progeniq as an early stage company which needed to expand to US. In 2007 we started fundraising and IDA's incubator was our choice as a platform for expanding into the US market.

Tell us about your US operations.
We make use of the incubator facilities at IDA's office in Redwood City for sales, marketing and investor relations. Currently, we have a headcount of one at the US facility, and our vice president and chief executive officer shuttles regularly between Singapore and the US.

How different is the US from Singapore and other markets that you have ventured into?
There are many business development opportunities and interest generated in the US is of a bigger scale, compared to Singapore. The culture embraces technological changes and innovation which suits Progeniq, and that is something that is less apparent in Singapore.

What are some of the major achievements of your US office to date?
We have been there for about three months, and the US office has been helpful in supporting our thrust into a new acceleration market in partnership with a top technology company in the US.

What are some of the key learning points that you can share with other aspiring Singapore infocomm companies?
Think and go global from Day 1.

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Hiperware: Understand the lay of the land

Hiperware (www.hiperware.com) is a Singapore-based company that provides a software platform - Hiperware Platform - to enable high-performance business applications and cloud computing. Hiperware Platform takes advantage of the commoditisation of computer hardware to enable a new genre of super-fast software.

Several compelling applications have already emerged from this technology. HiperSearch, the world's first "real-time search" engine, provides businesses
a means of constant monitoring of enterprise processes, activities or assets to ensure compliance and information security. Another product, Risk Filters, breaks new ground as a mechanism for risk management in banks and
financial institutions. Hiperware's Chief Executive Officer and Managing Director Mr Amey Laud tells iN.SG about the company's inroads into the
United States (US).

Hiperware concept photo Hiperware provides a software platform for enabling high-performance business applications and cloud-computing.

When did you first venture into the US market and why?
We ventured into the US market with a booth at JavaOne last year, which is the premier show for our category of technology. Following that event and through a series of interactions, we went about identifying key advisors and management prospects for the company. IDA was helpful in facilitating access to suitable office space and in making some of these connections.

Tell us about your US operations.
Our US operation provides a key strategic function. Hiperware's technology makes it easy for software companies to create high-performance (what one might call "CPU guzzling") software applications. Given how cheap and fast (commoditised) computer hardware has gotten, Hiperware provides software companies a means to build interesting software that can take full advantage of this commodity. To give an analogy, supposing gas prices suddenly dropped to 1-2 cents a gallon - people would consider owning helicopters, as opposed to cars. Likewise, we're taking advantage of hardware commoditisation to enable a whole new genre of software that can process information much, much faster - or even instantly.

As one might imagine, a lot of the prospective software application partners are based or headquartered out of the Bay Area, California. Having local advisors and presence is a great means of engaging with these businesses. In the meanwhile, we are also working on a sales and marketing strategy focused on the enterprise and cloud computing markets in the US.

How different is the US from Singapore and other markets that you have ventured into?
One needs a clearly articulated plan - and be well financed - before
venturing into the US. For a high-tech software company, the US has the most complete "ecosystem" - the widest range of customers (the US is the largest software consumer and provides higher chances of getting "early adopter" customers than most places), sophisticated investors (from very-early to late-stage), and relevant management (who have "been there and done that").

What are some of the major achievements of your US office to date?
We are in the process of working some very high-value application partnerships along the lines we had envisioned.

What are some of the key learning points that you can share with other aspiring Singapore infocomm companies?
While Singapore provides a great starting point for infocomm companies, one should start evaluating international opportunities early and objectively. Each country has a well-defined business culture and lay-of-the-land when it comes to working with foreign companies.

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