Who would have thought the next big thing would be keeping previous big things going? Patrice Motsepe, for one. His Africa Rainbow Capital (ARC) investment firm has put money into a technology business that helps companies keep ageing enterprise systems alive.
A partnership with US-based Spinnaker Support, formally launched in Johannesburg this week, is deeply revealing of a prevailing mood in corporate technology circles. South African companies still want modernisation and emerging technology capability, but are less enthusiastic about tearing apart operational systems that already work.
Spinnaker is an 18-year-old US-based software support company that provides third-party support for major enterprise software systems after customers decide they no longer want to follow the migration path laid out by the vendors of these systems. It already supports more than 1,000 companies globally and has been working with South African customers, including Telkom, for about two years.
“There are companies down here that are frustrated with the software vendors,” Spinnaker founder and CEO Matt Stava told Gadget at the Johannesburg launch. “So what can we do to really help them find an alternative to the roadmap those vendors are forcing them down?”
Large enterprise migrations absorb vast amounts of money and management focus. South African firms tend to interrogate the business case more aggressively than many overseas markets.
For example, a mining company navigating a commodity downturn or a telecoms operator under margin pressure cannot approach a billion-rand migration casually. Boards increasingly want to know whether the upheaval creates measurable business value. And that has created an opportunity for companies offering continuity while cutting the cost of that continuity.
“Customers are looking for options,” said Stava said. “Customers want less vendor lock-in. They want flexibility and the ability to navigate where they want to go from a modernisation perspective.”
The companies he describes still want newer digital tools and stronger automation but want greater control over how change happens. Many enterprises now treat their large operational platforms as infrastructure to be maintained steadily while investment flows into newer applications around them.
“Whether that’s AI solutions, supply chain solutions, or best-of-breed software, customers are looking less and less at the software vendors to provide that innovation.”
ARC clearly believes that thinking has become widespread enough to support a sizeable African business. At the launch event, ARC executive Graeme Dorrington drew parallels with some of Africa Rainbow Capital’s other investments.
“Similar to our investments in Rain, our investments in TymeBank, and others, it plays into the theme we like investing in,” he said. “We’ve always invested in disruptive industries and markets, and we think this is an industry ripe for disruption.
“There’s never really been a local solution that you can promote to your staff and your company; one with a local team you can look in the eye.”
Spinnaker also sees South Africa as a talent base rather than merely a sales market.
South Africa’s weak economy has created a large pool of experienced enterprise engineers developed across banking, telecoms and mining. Those skills have become attractive to international firms looking for operational expertise at lower cost than in Europe.
Said Stava: “We’ve got talent down here in Africa, and it’s easier to find talent here than it is in London. So we decided it would be strategic to think about putting an operations and service delivery centre here. There’s an unemployment rate that’s unfortunately extraordinarily high, so there’s availability of talent.
“We’re looking at South Africa to really be a key service delivery hub for all of Africa, for sure, but also for Europe as well.”
Teko Mojaki, managing director of Spinnaker Support South Africa, said at the launch that he saw the same opportunity: “We already have support centres around the world, and the ambition is to build one in South Africa. That’s very exciting for me.”
Spinnaker’s slogan that dominated the décor at the launch event at the Saxon Hotel was telling: “Legacy into the future.”
With that focus on legacy systems, the launch saw little of the current technology-sector language around disruption and reinvention. Rather, the conversation revolved around cost and operational stability.
Dorrington spelled it out: “Flexibility matters enormously in African markets,” he said. “If a mining company is in a downturn cycle, forcing it into a billion-rand ERP migration may make no business sense.”
* Arthur Goldstuck is CEO of World Wide Worx, editor-in-chief of Gadget.co.za, and author of “The Hitchhiker’s Guide to AI – The African Edge”.