Gemcom Software is a prime example of a local high-tech firm that owes its existence to Vancouver’s mining industry. Founded in 1985, the locally based company is now the largest global supplier of mining software. In the last five years, the company has shed its public listing and invested $78 million in new products. Today, Gemcom has 50 offices that serve 4,000 mine sites in 130 countries around the world.
President and CEO Rick Moignard chatted with Business in Vancouver recently about the company’s stranglehold on the mining software business.
Vancouver is a mining centre. It makes sense to be here. When I travel around the world and I say I’m from Vancouver, people say that’s great and they recognize it as a mining centre. A couple of other things we get out of being from Vancouver is technical talent in terms of developers, and the other great thing we have is it is a place where mining professionals like to live and work. I can keep people here in Vancouver, whereas if I was in a number of other places around the world it would be a lot more challenging.
Our sales and services staff are on the road a lot. In fact, if I find them around the office a lot then they’re not doing their jobs.
In any given month if our sales and services staff were in the office 35% of the time, I would not be a happy guy.
We actually took the company private for, really, one specific reason. I wanted to invest in some technology. We were at the point in the curve where it was hard to get the mining community to adopt new technology quickly. The problem with the public markets at that point was that [with] anything we built, the expectation was our return [on investment] would be very quick. That just isn’t the case in the mining business.
July 23, 2008.
I think that would have hurt us significantly. That was one of the good things about going private I’d love to take lots of credit for but I can’t. I can’t tell you I knew the market was going to crash. Being a small-cap company in a market like that was going to put huge pressure on me to cut costs and not feed the engine we’re trying to feed. I think we’d be a significantly different company, much smaller today than we are.
The answer to that is our business did not drop; we actually held our business during that period. It really was business as usual.
The boom is only one of the factors we see impacting us. The other factors that are impacting us right now are the lack of mining professionals in the industry. Here in Canada there have been projections that as much as 50% of the mining labour force is eligible for retirement over the next 10 years.
It is important to remember that there was a big void from back in the 1990s when the mining industry was in the toilet; nobody went into mining, so there’s a lack of people in the 35 years old to 55 years old group. That plus the boom for metal and coal have actually caused our business to keep growing. I expect this trend will continue.
First off, I have a lot less hair than I used to. There’s no question it’s a challenge. Not only do our customers have trouble finding good strong mining professionals to work for them, so do we. That’s just a factor in the industry. I think we have some advantages globally in getting these people because we’re global; we can find people in other parts of the world and offer them the ability to work and live in Vancouver and that’s helped us.
I’d love to take credit for them changing their minds, but I can’t take credit. The reality is the market itself is pushing them to change. The lack of people is literally a crisis for them, they need to deal with it and that is causing them to think differently.
I have so much opportunity in this company I actually have to manage opportunity rather than trying to find opportunities to grow. The bigger players like an Oracle see that and they look at the industry and say,
“This is a great industry we can get into it.” But a third of our staff are mining professionals. You got to have that depth to service these customers and that becomes a barrier of entry for these guys. It’s bloody hard to catch us at this point.