A cluster of new firms in the Web 2.0 sector is springing up in the northwest, and their big challenge is to convince skilled workers of the attractions of the region, writes John Collins.

The northwest of the US, and in particular the Seattle area, has become synonymous with technology over the last 20 years. That's largely due to the fact that Microsoft is headquartered there and as a result has either spun off or attracted other tech and internet heavyweights such as Amazon, Real Networks and InfoSpace.

Ireland's northwest, on the other hand, is more usually associated with Yeats, dream-like landscapes and mythology.

This could change soon, as the region stretching from Castlebar north to Donegal town and inland as far as Carrick-on-Shannon is now home to a small but growing cluster of technology companies. In the last year innovative new web-based companies such as Nooked, Tablane and MyMe have launched, while more traditional software companies like Infacta and Cora Systems have been quietly getting on with their business in the region for a number of years.

While the roots of a nascent technology cluster in the northwest is remarkable enough, what's more interesting is that many of these firms are finding success in one of the hottest areas of technology at the moment - the much-hyped Web 2.0 sector.

Nooked, in particular, has managed to compete and be recognised on the international stage, with US publications such as Red Herring, Business Week and ZD Net recognising it as a leader in its space.

Plenty of time and energy has been wasted on the web debating just what constitutes a Web 2.0 business and whether it is a valid moniker.

What's certainly agreed is that in the last two years a new wave of businesses has emerged, providing community-oriented online products and services that allow users to share information and interact with the web on a much deeper basis than simply surfing sites for information.

"Web 2.0 is just a name to put around a category," says Fergus Burns, founder and CEO of Nooked and the driving force behind the IT NorthWest Voice blog (http://itnorthwest.blogspot.com), which has become a focus for companies in the area.

"It's about creating online services, using the net as a distribution mechanism and building a community of users. That just happens to be very popular at the moment."

The advantage of the model is that it means companies can be based almost anywhere once they have a net connection. Unlike traditional software companies they do relatively little face-to-face selling to customers or resellers. In fact, as Burns points out, his business model is all about acquiring customers at the lowest cost possible through methods such as Google AdWords advertising and effective PR.

Tablane, whose founder Julian Ellison runs the business from his home in Newport, Co Mayo, is another example of how such companies can be located almost anywhere.

Although Tablane has released an innovative web browser which runs on top of Internet Explorer, it has just two employees - Ellison and his technical partner, Dr Yongchun Ji, who is based in London.

They have sunk €20,000 into the business, and it produced a browser within a matter of months. But, according to Ellison, this is not the endgame for the company - merely a calling card for building a community that can then produce a revenue stream based on a mixture of advertising, sponsorship and subscriptions.

While Infacta, which was founded in 1996, could hardly be classified as a Web 2.0 business, it also makes extensive use of the internet as a sales and distribution model. From its base in Sligo it has built an impressive client list for its e-mail marketing tools which includes HP, Dell, Microsoft, MTV and the University of California.

Enterprise Ireland has also cottoned on to the potential Web 2.0 provides for marketing Irish firms in the US. "The Web 2.0 tag is important from a number of perspectives, not least investment," says Brian O'Malley, a senior development adviser based in the development agency's Sligo office. "Before [ technology publisher Tim] O'Reilly coined the phrase, did these companies not exist? Of course not."

Enterprise Ireland has supported the IT NorthWest group by sponsoring meetings, organising a trip to Tim O'Reilly's influential Web 2.0 conference in California last autumn, and of course providing early stage support and funding. O'Malley is now working with colleagues in the US to draw up a work plan for how Irish Web 2.0 companies can crack the US market this year.

Most of the new breed of start-ups ended up in the region as a result of a decision by their founders to enjoy a better quality of life while still being able to work in the technology space, according to Burns.

He worked with Microsoft in Dublin and the US but was drawn back to the region at the beginning of the decade when it became time to have children and build a house. He lives in Leitrim and commutes to Nooked's offices on the campus of the Institute of Technology in Sligo.

Burns has encountered relatively few infrastructure problems basing himself in the region. He has wireless broadband at home courtesy of a rural scheme and is able to tap into IT Sligo's infrastructure in the office.

In contrast, Ellison struggles with a narrowband dial-up connection at his Mayo base. He moved there last year from London following the sale of RedFig, the interactive TV technology company he co-founded.

Burns regularly flies from Sligo to Dublin, while Ellison is a regular at Knock Airport. "They need to get their all-weather instrument landing sorted out - it can be a lottery in winter as to whether you will get out," says Ellison. "But the cost is negligible and I can leave home and be at a meeting in London four hours later."

In fact, Ellison says cost is one of the main advantages of living in the area. "You can live relatively cheaply here," he says. "It would be much harder to put in the same time and effort if I was living in Dublin. We reduced our monthly costs by €3,500 just by moving here from London."

Although Tablane and Nooked are still at the early stages of development, both companies have ambitious plans for expansion. As they attempt to grow, the next challenge will be attracting skilled staff to work in the region.

Ellison is encouraged by the high quality of young developers being produced by GMIT in Galway and Castlebar, but Burns believes it will be difficult to attract and retain more experienced staff unless they have ties to the area.

With funding also an issue, the survival of the northwest's Web 2.0 cluster is far from assured. But what these companies have proven is that it is possible to build a business outside the confines of the M50 and reap the attendant lifestyle benefits.