Since the mid-Eighties, successive multinational technology companies have set up in Ireland. Once out of university, and sometimes while still there, graduates have been offered a red carpet by blue-chip technology companies. They have been offered good pay, share options, opportunities to travel and all the benefits that come with working for a multinational company.
Yet despite the lure of the multinational, some of these well-educated graduates decide to go out and set up their own business, forgoing that well-paid, pensionable job. Instead, they choose to work themselves to the bone – all to show the world that their business idea is better than anyone else’s.
We Irish are adept at setting up our own businesses and making a success out of them. Since the turn of the millennium, Deloitte has been measuring this success story through the Fast 50 Awards, which recognise the 50 fastest-growing indigenous technology companies by revenue on an annual basis. Each year, firms are recognised for their revenue growth over the preceding five-year period. All these companies have shown themselves to be at the cutting-edge of the technology industry, carving out their own niches in what is a multi-trillion euro business. And, as expected, they have been shaped by the environment in which they find themselves.
Since beginning to measure the success of these Irish companies at the start of the millennium, it has become evident how different factors have helped their growth. In the period from 2000 through to 2003, Irish companies grasped the opportunity presented by telecom deregulation, with firms such as Conduit and eTel leading the way in the provision of telecommunications service offerings. As the years progressed, and mobile phone penetration grew, other companies such as Zamano, Newbay and ChangingWorlds have become leaders in the provision of mobile telephony software and content.
The growth of the Irish financial services sector in the Nineties also proved a catalyst for Irish software entrepreneurs in the banking and finance world. Over the past eight years, the development of software for the financial services sector has meant that companies such as First Derivatives, Fineos and Percana have featured heavily in the Fast 50.
A key trend at the start of the millennium was the growth of own-business websites as both a marketing tool and a distribution channel. Since 2000, we have seen the evolution of the internet from a marketing tool to one that facilitates sales and distribution. This has led to the growth of two types of indigenous companies – the website designers and those companies seeking to trade via the web. While the Irish website design industry had been a fragmented one, with few barriers to entry, a number of these companies have found themselves consistently in the Fast 50.
The ability to sell online is one which every new business craves. Between December 1999 and May 2008, the number of worldwide internet users increased from 248 million to 1.4 billion and during that same period we began to recognise brands such as Google, Yahoo! and Amazon. However, we have also seen a growth in Irish firms using the internet to reach an ever-increasing, web-enabled customer base. Companies demonstrating growth in the Fast 50 over the past few years have included Web Reservations International, which has carved out a niche market for online accommodation booking, while Directski.com has cornered the UK and Irish ski holiday market.
Examining the businesses competing to be the fastest-growing technology company in Ireland is a very insightful exercise – and speaking to those companies’ founders even more so. Based on our interaction with those firms competing in 2007 and 2008, what trends will we see in the Irish technology industry?
There is a definite shift towards outsourcing of data storage. And while Amazon, Google and Microsoft will invest billions into trying to lead the utility computing revolution, there is a market for the smaller Irish player to carve out a niche market focusing on customer service. We will expect to see a number of companies demonstrating growth in data storage in 2008 and onwards.
In the software sector, the data storage revolution will lead the way in terms of requiring virtualisation software and technologies to enable the new server farms to operate as efficiently as possible with as little power usage as possible. Such software may also find its way into the computer gaming and PC markets.
Finally, we would expect to see the continued participation of Irish firms in the online services market. The ability of Irish companies to act as agents in the €85bn-a-year global travel market means Ireland will continue to build up its competencies in this industry. Equally, we expect a strong representation of e-learning and web-based training companies in the Fast 50 over the coming years, following PulseLearning’s success in 2007.
By Richie Howard, director, Telecommunications, Media and Technology Group, Deloitte