Ireland lures top vendors: European headquarters for Lotus, Microsoft, A-T – Ashton-Tate
Ireland Lures Top Vendors
Europeans no longer have to straddle eight time zones when they telephone Claris for customer service, now that the Santa Clara, Calif.-based software company has opened an office in Dublin, Ireland.
Executives at Claris and a dozen other firms doing business in Ireland maintain that users benefit from a European presence. They say:
* It is a cheaper telephone call and a shorter supply line.
* Localization of software, and language-specific packaging and screen messages are easier to accomplish from inside Europe.
* The industry has passed the stage of selling only to those who can figure everything out by themselves. Now, companies have to be near their markets to support every new product.
* Supplying different quantities of products to different markets from Ireland gives Europeans a better sense of getting good service. The European market can see itself as a reasonable-sized cog in a reasonable-sized machine.
HOUSES 80 FOREIGN FIRMS
Ireland is now the European base for 80 foreign software companies, including Lotus Development Corp., Ashton-Tate Corp. and Microsoft Corp. The country also houses the European software headquarters of Digital Equipment Corp., Motorola Inc, Westinghouse, IBM, Wang Laboratories Inc. and Boeing Computer Services.
Even companies that are not software developers have moved their software-intensive “back offices” to Ireland, to draw from a pool of computer-literate workers at modest wages.
Domestic software companies, such as Kindle or Mentech, produce vertical and niche applications and remain comparatively small. Yet the Irish company benefits from having a foreign company locate there, not only for its primary jobs but for the multiplier effect it has on local businesses.
Ten-year-old Printech International, plc, for example, was able to move into a new industrial park and purchase a $3 million web press on the strength of contracts to print manuals and packaging for Claris and other foreign newcomers.
TRYING TO RETAIN NATIVE TALENT
Jobs are what Ireland needs, say officials. Over the past two centuries, its principal export has been people, so the government has set a goal to retain talented citizens while luring back some of those who have emigrated.
Brian English, general manager of Logitech Ireland, Ltd., said his operation in Cork supports the European market for his company’s mice, scanners and Modula2 software.
“We in Ireland can work in the English language,” English said. “There are good people here, with the right manufacturing logistics skills. We don’t need natural resources to have a computer industry. We’re a neutral country and don’t take positions that offend anyone.”
Fintan Reddy, Microsoft’s local materials manager, noted that “Ireland is Microsoft’s only other manufacturing site outside the U.S., and we chose it because there are good people at all levels. Besides, it’s easy to do business here, we’re not too bureaucratic.”
That may also reflect the work of the Industrial Development Authority (IDA) of Ireland, which smooths the way. According to John O’Brien, vice president for research and information, the IDA offers:
* one-stop shopping for site selection and other logistics;
* assistance in obtaining connections to local venture capital, low-cost leases and grants;
* financial incentives that include a maximum corporation tax of 10% through the year 2000;
* and up to 100% depreciation of buildings and machinery, and repatriation of all profits.
“We even buy jobs,” O’Brien said, explaining that the IDA is willing to pay the first year’s salary of certain key employees if the company will locate in counties with the highest unemployment.
“Within 20 years, we will have a strong nucleus of indigenous high tech companies here,” predicted Eoin O’Neill, director of innovation services at Trinity College. However, he also said the path will be difficult and startup funding difficult to secure.
MORE PEOPLE THAN JOBS
“Venture capital wasn’t widely available in Silicon Valley until years went by and companies had ‘trained’ the providers that there was money to be made,” O’Neill said. “So in Ireland, money is there when you’ve landed your million-dollar order and you can show you’re a success.”
Until that pot of gold materializes, said Pat O’Reilly, a senior manager in the Nixdorf Computer Corp. Irish office, “We still have more people than jobs, so we stil have people emigrating. When we have more jobs, people will come back and experiment.”
Microsoft’s Reddy noted: “We’re all working in new companies. Okay, they’re not all Irish, but many of our employees will eventually work in their own companies. We will see that come.”
Andy DeMari, chairman, CEO and founder of Retix, a Santa Monica, Calif., maker of telecommunication software, says, “We have to work hard to get the best people. We want to see the Irish express the great creativity of which they are capable.”
English views this as the key to local software success. “This is our industrial revolution, the one we didn’t have before. We don’t need natural resources, only people’s talents. It requires a facility with language, and it’s principally an indoor activity. This is a type of industry that suits us.”
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