Mr Gordon Brooks is no stranger to Ireland. As a senior executive of international consulting firm Cambridge Technology Partners during the 1990s, he witnessed the growth of the Republic's technology industry first hand.
So when Breakaway Solutions - the company he founded as a full service provider of e-business solutions in December 1998 - decided to expand into Europe, Mr Brooks chose to acquire Dublin-based company Zartis for $18 million (#21.28 million).
"There is a great talent pool in Ireland. The universities are co-operative and the Government is fantastic in terms of supporting companies," says Mr Brooks. Breakaway researched about 160 European companies before choosing Zartis for its business direction, culture and focus on technology. Ireland is also neutral and is one of the few places that can serve all the culturally different areas in Europe, says Mr Brooks.
Zartis already had the consulting and e-business application building side to Breakaway's business and is now adding the application service provider (ASP) element. It is being rebranded and will become Breakaway's European solutions centre.
The Irish management of Zartis, many of who became paper millionaires following the acquisition, are staying on to lead the firm into Europe.
"Ireland will be the first development and solution centre and will serve the whole of Europe," says Mr Brooks. "But further centres will be opened when we reach capacity in Ireland.
"Germany is the most obvious choice for further expansion if you look at the e-business marketplace, and we expect to establish a number of other regional centres," he says.
Breakaway is hiring staff in Dublin and expects to employ more than 300 people within 12 months, although this is a conservative estimate, says Mr Brooks. In two years since Breakaway's foundation, the company has undergone rapid expansion and now employs more than 1,000 people worldwide. The company has set up Internet hosting facilities in 11 cities. It grew 49 per cent in the last quarter, and 71 per cent in the previous quarter.
But Mr Brooks is keen to slow the pace of growth. "You can grow very rapidly when you are small but there are just too many people to integrate when a company grows this large." The global ASP market has slowed after the market correction in April, says Mr Brooks. The correction hit Breakaway too and it was forced to pull a planned secondary share offering. Instead, the company raised an additional $39 million from its backers Putnam Investments.
Mr Brooks believes Breakaway is well placed to survive the impending struggle for survival among ASPs. "There will be huge consolidation. Analysts are predicting the ASP market will go from 60 companies down to 20 by next year and the ones that will survive are the full service providers."
Breakaway has a huge advantage on most other ASPs. It is expecting to be profitable in the next quarter and to have a positive cash-flow by next year. It has also made strides to get a slice of the lucrative wireless business, which is estimated to be worth $120 billion by 2003.
Breakaway has signed a letter of intent with Hong Kong-based telecoms group Hutcheson Whampoa and ICG Asia Works to form Breakaway Solutions Asia Pacific, and a similar deal is almost concluded with NTT in Japan, says Mr Brooks. So Breakaway's global march continues.
