Sunday, November 26, 2006

Redmond Developer: Romanian Holiday

Romanian Holiday
Neverfail Group's offshore adventure
by Jason Turcotte
November 2006

More than Eastern European charm drew executives from a small disaster recovery start-up to the narrow streets of Cluj, Romania, in their search for a new locale for their development team. The city's vigorous energy and ready supply of technical talent helped pique the interest of key executives at Neverfail Group Ltd. It didn't take long for the company to gain the attention of numerous, curious developers in the historical European town.
"We were the first company to ever take out a full page ad in this newspaper," says Ken Anton, Neverfail's support manager. "It raised a lot of eyebrows. And people said, 'who is this company?'"

After rigorous recruitment and a five-month training period, eight Romanians packed a compact, rented office room in Cluj, founding the new support office for the Texas-based company. It wasn't the likeliest of development scenarios; the city was by no means a Redmond or a San Francisco. But two years later the inaugural dev team had flourished, along with the company. The city is now home to Neverfail's largest office, and both parties have found the offshore move a mutually beneficial endeavor.
"There's an opportunity there for people to better themselves that wasn't there 10 years ago," says Neil Robertson, CEO of Neverfail. With developers in Stirling, Scotland, some in England, some working independently and some working from home, Robertson began envisioning a central support office that would foster technical debate, discussion and true team synergy. He also knew this "one center of excellence" would be best served offshore; he just didn't know where.
And within the historic, Transylvanian college town known for its breweries and financial sector lay an opportunity for a fledgling company to fully compete in a market chock full of giant challengers.

Small Fish, Big Pond
Robertson, who describes the company as "a mature start-up," is proud of Neverfail's humble beginnings but also recognized the need to market through a global reseller model. Neverfail launched four years ago as a legacy disaster recovery consultancy, working closely with IBM Corp. on the delivery process for backing up systems. Since its inception, and the arrival of Robertson, it was clear the company needed to shift gears to keep pace with competing disaster recovery products from CA and Double-Take Software Inc.
"In order to deliver that seamless experience it had to be platform-specific. So, we made a conscious decision at that moment that Linux would not be our focus," Robertson says.
In 2002 Neverfail concentrated on the Microsoft market, a vision management found appealing for its diverse partner community. With the new focus emerged Heartbeat, the company's flagship product.

"Our colleagues in Cluj have contributed quite a lot about the understanding of the different cultures and marketplaces we sell."
Ken Anton, Support Manager,Neverfail Group Ltd.The software replicates data from an active server to a passive one, providing out-of-the-box protection and securely backing up information.
The product covers the entire application environment without requiring the re-start of apps.
With Heartbeat came a series of application modules for Microsoft-based platforms. The group now offers modules for Exchange, SharePoint, IIS, File Server and SQL Server. Soon thereafter, Neverfail management entertained the notion of pooling its development resources to create a facility that made sense both logistically and financially.
That eight-person team burgeoned to 40 developers. Today the group performs a wide range of tasks including Web management, app development, quality assurance, testing and tech support. Neverfail, which has 10 more hires on the horizon for its Cluj office, says the offshore move has helped them swim with the sharks in the competitive Microsoft market.
After scouting sessions in Cluj, the group flew the first wave of hopefuls to their Stirling, Scotland, office for five months of testing and training. There they handpicked a core group whose skills would complement one another and could thrive in a team-driven environment. On that trip was developer Radu Miclaus.
Miclaus heard of the opportunity through a friend. With such a small developer community, tight-knit hardly describes the group vying for employment at Neverfail. The open exchange of ideas encouraged by management was enticing enough to coax him from a job at a Romanian outsourcing company, which fielded contracts from the United States and other parts of Europe.
"The IT market in Cluj isn't very big," says Miclaus. "Even though we have many colleges and universities, it's still young."
While the dev environment became more culturally aware and cost-effective for Neverfail, it also had its perks for talent like Miclaus. In Romania, he says, businesses are run rather dogmatically, with little project input from the rank and file. But Miclaus-recently promoted to support team leader-thrived in the new, collaborative arena, which included daily conference calls with the Stirling team and informal roundtable discussions.
Their mantra was and remains simple: leverage talent, don't micromanage it.
While the group performs a myriad of dev tasks, one example of an undertaking was the company's SCOPE product, or Server Check Optimization Performance Evaluation. This application-built in Cluj-examines the reliability of Windows 2000/2003 servers, existing as an automated data analysis solution that collects information on key app components to gauge the health of the server, its workload and bandwidth.
But, as is always the case in the competitive IT industry, Neverfail wasn't the only vendor luring and recruiting offshore development talent.
"One of our key eight was headhunted by Microsoft and flown to Redmond. We knew we weren't going to win that one," Robertson says. "He was a bright kid."
Geography LessonBefore committing to Cluj, Robertson and his colleagues weighed two other emerging IT hotbeds: India and Vietnam. Robertson had generated a lengthy wish list of locations for Neverfail's offshore development team, based on exhaustive discussions with colleagues, consultants, lawyers and clients. Three stood out-India, Vietnam and Romania-with Vietnam earning an early nod as the most appealing site.

Distance, time zones and travel costs played big roles during the decision-making process two years ago. Vietnam was dropped from consideration due to its remoteness and the "embryonic" nature of the Vietnamese economy. India's wealth of IT talent was no surprise to Robertson, but the country's red tape was. Legal parameters kept Neverfail from investing there.
"If you go to India, you can't set up your own company [according to law]. You need to have a jointly owned company," Robertson says. "There are enough horror stories out there of companies who set up with a partner and, suddenly, the money isn't there-nor is the partner."
Cluj, Romania, didn't have the name recognition of competing IT destinations, but within the walls of this city of 340,000 people Robertson spotted an intriguing mix of talented developers, a unique culture and an opportunity to play a remarkable role in the rebuilding nation. Robertson cited recruitment opportunities with 50,000 students citywide, including 12,000 enrolled at the Technical University of Cluj-Napoca.
Since schools began placing a stronger emphasis on English, the IT industry has taken notice. The city now plays host to more than 100 software companies. Robertson also found that the cost of office space in Cluj was an attractive bargain at 960 Euros, or roughly $1,200 U.S. It didn't take long for the move to pay dividends for Neverfail.

Expectations Assessed; Challenges LingerRobertson can't cite dollar figures but he estimates the Cluj transition has yielded a significant reduction in development costs, and the perks go well beyond the numbers on a spreadsheet. He credits low turnover and fervid attitudes for the bottom-line boost, which has enabled the company to focus on product marketing and U.S. expansion strategies. He says without the migration to Cluj, the business would be a year or two behind in growth-at least. And management also sees the move as a means of harnessing a global perspective on the industry.

"Our colleagues in Cluj have contributed quite a lot about the understanding of the different cultures and marketplaces we sell," says Anton. "It's helped us be more aware of our customers who are not English speakers."
But that doesn't mean the transition went without a hitch or two.
The frequency of power outages in Romania was unlike anything the company had experienced at the Austin-based headquarters or in Scotland. The occasional loss of bandwidth was another nuisance more commonplace than in the United States. And another example off an offbeat adjustment was tracking their trash. Romanian law requires that businesses officially stamp the paperwork of the privatized companies responsible for hauling commercial garbage.
Less quirky obstacles often resulted from labor laws, which were more "regimented" than Robertson expected. And should Romania join the European Union in 2007 (an issue he keeps a watchful eye on), new challenges would be inevitable.

While admittance into the European Union eases mobility and puts laws on par with those at Neverfail's Stirling office, it will impact Romania's currency, economy, labor laws and health care system-all elements likely to yield both positive and negative changes to the company's Cluj operations. But Robertson remains optimistic, and he attributes the success in Cluj to a few factors.
Management retention, he says, was paramount to the company, along with creating a work culture in which developers thrive. Their mantra was and remains simple: leverage talent, don't micromanage it. With the Cluj office now open for two years, Robertson believes that Neverfail made the right choice when it decided to open its own offshore office, rather than outsource the operation to a third company. Relinquishing autonomy, he says, is simply not the best alternative.
"I think when people purely outsource there are so many examples of where that didn't work," Robertson says. "Writing the check doesn't get the job done."


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