In a business environment in which the skills shortage has become synonymous with the high tech industry, the reflections of the president and chief executive of computer company, Stratus, on the firm's Irish operations make an interesting change.
Mr Stephen C. Kiely, contends that the decision to develop an Irish base has provided the firm with "fantastic access" to a talented workforce in comparison to the "intense" competition for engineers in the US. And Stratus has found it easier to retain those staff on the payroll than their American counterparts.
Stratus was established in the US 19 years ago and has been in the Republic for the past 11 years. It makes fault-tolerant computers which are used for mission-critical applications that cannot afford to have any downtime. Historically, it has sold them to the financial services sector and more recently to the telecommunications industry.
"Recruiting cycles in the US can be very long," Mr Kiely said. "In Ireland there is a supply of talented people who don't have as many employment opportunities. We can hire people with the skills that you'd get here on either coast. We have much lower turnover and our retention is better," he said in a recent interview.
Stratus's Irish operations in Blanchardstown, Co Dublin, employs 30 people, mostly in engineering, and this figure will rise to 60, Mr Kiely said. Asked if he located in the Republic due to lower pay, Mr Kiely said he expected "salaries to normalise over time". But, the main factor was the financial incentives offered by the State through the Industrial Development Authority. "The IDA provided us with the boost to get over our start-up expenses," he said. "It would be a big disadvantage if you had to put up the expenses yourself. This way, the IDA neutralises the playing field."
Stratus is entering a new era this year. It was bought last August by the telecommunications company, Ascend Communications, for its technology. Two months ago, the Stratus enterprise computer business was taken private by Stratus management and Investcorp, a global investment group. Management and employees of Stratus own 30 per cent of the company, which is unique in the computer industry.
Having focused on the telecommunications industry in recent years, the new Stratus is returning to its original target market - financial services. Two-thirds of its 725 customers are in financial services. Most of its computers go to banks and brokerages for transaction processing.
Twenty-five of the world's top 30 banks, nine of the top 10 US securities firms, and all major credit card networks use Stratus systems. The largest stock exchange in Asia, Nasdaq and other major exchanges employ its hardware. Most cash management programs globally run on Stratus equipment. "We're installed in the heartbeat applications of the customers we serve," Mr Kiely said.
In May, it will move from its offices in Marlboro, Massachusetts, into Digital's former headquarters in Maynard, Massachusetts. Half Stratus's 1,000 employees are in Massachusetts with the remainder at its engineering centre in Dublin and at a sales and service centre in Phoenix, Arizona. Currently 12 Irish people are stationed in Marlboro and after a stint there will bring back their knowledge to the Dublin base.
However, the corporate makeover presents challenges. According to analyst Mr Jim Johnson, chairman of the Standish Group in Dennis, Massachusetts: "Stratus is going to have to get more aggressive because it doesn't have the telco market to rely on anymore."
"It needs to find new applications and get good products in the financial services market, where it has not been very competitive in the last few years."
Stratus, which has competed against Compaq Computer's Tandem offerings, plans to expand its product line.
The Stratus Continuum family is based on Hewlett-Packard's PA Risc microprocessor, which runs on the proprietary Stratus Virtual Operating System and Hewlett-Packard's HPUX platform.
It is developing a new product, Continuum II, that will use an Intel processor and run on Microsoft's Windows 2000 operating system. Mr Kiely said the product, expected to be available early next year, will address the markets desire for standardisation.
A system based on Intel and Windows, he said, "is an exploding market. Over the next five years, growth in Unix will be less robust while growth in Windows will be strong and accelerating".
By 2002, the two product lines will converge and evolve into another generation. "We believe we can create leadership for continuous availability based on price and functions," Mr Kiely said.
Continuum II should improve Stratus's chances, Mr Johnson said. "Stratus has always enjoyed high margins. It needs to get in line with the marketplace and meet competitive pressures it didn't have to meet before."
The company, which had revenues of $275 million (#199 million) last year, is up to the task, Mr Johnson said: "We'll see new products faster, new product pricing, and a different focus on quality".
This year Mr Kiely said, is Stratus's investment year. It will spend about 15 per cent of its revenues on research and development, up from 12 per cent last year, and $40 million on engineering.
Stratus's "multi-faceted plans for new products, services and applications breathe new life into a company that could easily have fallen asleep at the switch", said Mr Peter Kastner, chief research officer at the Aberdeen Group in Boston.
The vigour and strength of the new Stratus plans will no doubt be beneficial to the Irish operations. And if the company goes public in two to three years time, as Mr Kiely expects, it will mean even better news for those Irish employees who have shares in the company.
