Despite the litany of bad news about the technology sector in the United States, some Irish companies are managing to survive and prosper in and around California's Silicon Valley, even attracting venture capital among the wreckage of the dotcom burnouts.
Two that stand out from some 60 current Irish start-ups on the West Coast in the last few years are Interactive Services and Havok. Both have just obtained fresh funding in recent weeks, underlining the confidence they express about the future.
Interactive Services is a provider of e-learning solutions to the telecoms industry, based in San Francisco. It delivers discrete modules of "just in time" and "just what's needed" training, using a unique delivery objects system.
The company has just received venture capital worth #10 million (£7.88 million) from a range of investors, including ACT Venture Capital, UK-based Barclays Ventures and Enterprise Ireland, to transform itself from a technology services company to one which builds, markets and sells products to US and European clients.
Interviewed at Enterprise Ireland's Silicon Valley office in Campbell, Mr Glen Kenny, director of business development, said the company planned to increase the total workforce in Dublin and San Francisco.
"The online training market in the US will double in size every year, reaching $11.5 billion by 2003" a research group has estimated, he said. The number of employees would increase from 100 to 250 by the end of the year, mostly in the US.
The bursting of the dotcom bubble has benefited Interactive Services in this regard. There are more and better-qualified applicants looking for jobs in what has become an employers' market. Less than a year ago many jobseekers were naming their price.
When they first opened their San Francisco office 30 months ago it was tough going for Interactive Services as "nobody knew who we were", Mr Kenny said. But they got a reputation for hitting their deadlines and this made a big difference.
"If you don't hit your deadline they won't give you another project ever again," he said. The company was successful because "we are very, very focused on what we do".
Interactive Services manufactures its software in Dublin where the cost base is much lower than in California. Capitalising on the niche sector it has identified it recorded a turnover of #4.3 million in the last financial year and is on course to double its turnover this year, chief executive Garrette Byrne said in Dublin last month. Dublin-based technology firm Havok also gained an edge from the economic slowdown in California. It acquired at a reasonable rent a convenient and spacious office at Veterans' Boulevard in Redwood City after the previous New Economy occupant went out of business.
"If there hadn't been a slowdown, would we be doing better? Yes, but a year ago we would never have got office space at $4 a square foot," said Mr Ed Cherry, vice president of sales at the Palo Alto premises.
Despite a "terrible" venture capital market, the US office of Havok raised £2.7 million and signed a licensing deal worth £2 million last month. It had 13 people employed in March 2000, has 40 now and plans on 50 by the end of the year.
Most of the work is done in Ireland, where 25-30 of its 40 coders are based.
"We give 3D content physical properties," said Mr Cherry as he showed how Havok's physics technology determines the motion and behaviour of objects and characters on-screen in video games - such as how a truck's suspension will react when hitting an obstacle with different sets of tyres, or how a cloak will float out behind a running character. "Things like water, hair and fabric are taken for granted in our daily lives, but designers must simulate these items in films, animations or games - and the physics involved become extremely complicated," said Dan Prockazka, product manager of Discreet, a division of Autodesk, a leader in digital content creation in Los Angeles which has signed an agreement with Havok.
Like so many Irish niche companies, Havok benefited from offering a software product for use as part of a solution, which clients preferred to buy rather than setting up their own teams.
"The more tedious stuff is our bread and butter," he said about Havok's game development. Its software worked on a range including PlayStation 2, XBox and Nintendo. Its target was to focus on the games sector and look at expanding to other sectors next year.
Three dimensional technology was increasingly important in determining such things as how to pack a warehouse properly.
Havok was founded in 1999 by Mr Hugh Reynolds. It announced in June that it had signed a $2 million (#2.3 million) deal with Autodesk and other agreements with Macromedia and Intel to provide the physics technology for their Shockwave platform.
What advice would he give to other Irish start-ups coming to the US? "Have the right business plan," said Mr Cherry. "And the really important thing to do is get visas sorted out in order to buy a car and rent and office."
