From the Irish Examiner...
Tie-up creates more millionaires
by Brian O'Mahony
ANOTHER takeover of an Irish high-technology company has created another batch of millionaire business tycoons and investors.
At least 16 Irish investors are beneficiaries of an $81 share-swap deal with US network equipment supplier Fore Systems, a $2 billion enterprise.
Founded in 1990 by Dr Jim Mountjoy, Euristix is a £9m company today providing state-of-the-art software to the telecommunications groups supplying technology to the rapidly-growing Internet sector. Founded in 1990, the Irish company has been profitable every year and has grown at the rate of 70% per annum. It employs 150 people and today's announcement ensures consistently strong growth into the future.
From Cork, Jim Mountjoy took an engineering degree in UCC before heading for Dublin where he held jobs in the old P&T, now Telecom E'ireann.
He was also a major player in Baltimore Technologies before quitting to set up Euristix. Explaining the move, Dr Mountjoy said the ambitions of the highly-motivated people in the business could not be satisfied by organic growth alone.
Driven by the need to grow faster, the company explored several options including the takeover of a similar-type operation, mergers, or a sell-off of the company. As a result of the deal, Mountjoy, his three senior partners and a host of others have become paper millionaires playing their part in the emerging millionaire business class in this country.
It is reckoned that Ireland is producing at least one new millionaire per week, and Mountjoy and his associates have ensured that record is maintained. FORE was little known apart from its suppliers until about two years ago. Tom Byrne, senior corporate adviser in Davy Stockbrokers, who was closely involved, said the deal was good for all sides. Fore have been involved in production in Swords for a number of years, employing 80 people. Another 25 are callcentre staffers looking after-sales back-up for the group.
For Fore Systems the quality of the people, reflected in the company's track record was a key factor in cementing the deal.
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The Sunday Business Post
Euristix and Saville gain from telecom deregulation?
By Tom Golden
Software and services companies are reaping the benefits of telecommunications deregulation. Companies like Eurostix and Saville Systems are providing telecom firms with the technology they need to help them compete in the new, lively environment.
Minister for Public Enterprise Mary O'Rourke said that liberalisation of the telecoms market in Ireland alone will result in the investment of over £1.5 billion over the next three years.
As the process is happening on an even larger scale across Europe, software firms based here are poised to cash in on the bonanza.
Indigenous software firm Euristix has built its business on changes in the telecoms sector.
The firm was established in 1990 to provide software development services to telecommunications equipment manufacturers keen to add new functionality to their systems.
It launched its first product, Raceman element management software (EMS) in 1995 and now lists up to 60 of the world's top telecommunications equipment manufacturers as its customers, including giants such as Tellabs and Lucent.
''Liberalisation will mean that telecommunications service providers need to offer a greater range of services to their customers. That's how they differentiate themselves,'' says Dr Jim Mountjoy, Euristix chief executive.
''This means that our customers, the equipment manufacturers, have to supply systems that enable telcos to offer new services and element management software is core to achieving this.''
Euristix employs around 150 people in offices in Dublin and San Jose California. It had a turnover of nearly £9 million in its last financial year that ended September 30.
According to Mountjoy the company plans to take on a further 20 employees before the end of the year. It is targeted to have a staff complement of 211 by the end of September 1999.
As a private company there is speculation that Euristix will be taken public in the not-too-distant future, however, Mountjoy says a public flotation is unlikely to happen in the short term. He says the company is still too dependent on service revenue to make it attractive as an IPO candidate.
The market sector where the company has positioned itself is still relatively underdeveloped and an off-the-shelf offering in the element management arena, such as Raceman, is very rare, according to international marketing manager Irene McGoey.
Euristix believes it has around 8 per cent of the market for EMS software.
Hewlett Packard's Open/View is the market leader with a 38 per cent share of the business, but as Mountjoy points out Open/View is a general purpose management tool and is not specifically designed for application in the telecoms sector.
Straightforward contract services still account for over 40 per cent of Euristix's revenues and the company is also heavily dependent on its largest customer Tellabs.
''Licence fees from the Raceman EMS product account for around 10 per cent of our revenues,'' says Mountjoy. ''The challenge is to grow that.''
Saville Systems, based in Galway, has already surmounted the hurdle of becoming a product company. Saville supplies telecommunications convergent billing systems that enable telecoms to bundle services such as local, long-distance, cellular and cable phone calls on to a single monthly bill.
Speaking at the NCB Stockbrokers Irish Technology conference in London last week, Jack Boyle, Saville's president and chief operating officer, said that as telecommunications firms bring out new services they will need to be able to inform their customers of the changes and bill them for the service.
''Convergent billing is really the 'Holy Grail' of billing systems,'' says Boyle. ''It is the catalyst that transforms a telecommunications network into a telecommunications 'service'.''
Boyle states that as the differences between fixed line, mobile, internet and cable telephony become increasingly blurred, a new breed of hybrid service provider will emerge.
''With the advent of deregulation, privatisation and the emergence of new technologies, companies must clearly differentiate themselves in what is quickly becoming a commodity business,'' he says.
Saville, which originally started business in the US, moved its corporate headquarters to Galway in 1996 where it now also has a software development shop and sales office.
According to Boyle the expected changes in the telecommunications sector across Europe should see the company's European sales grow to around 40 per cent of its revenues by the end of 1999.
This year Europe accounted for just 18 per cent of Saville's sales.
Boyle points to what has happened in Germany as an example of the opportunities liberalisation is presenting for companies like Saville.
''Deutsche Telekom has warned that it will miss its earning projections this quarter because it is facing competition from 30 new entrants in its market,'' he says.
''That's Saville's sweet spot -- small- and medium-sized telecoms companies that need new billing systems and incumbents who need to add new functionality to their existing systems,'' he says.
Saville and Euristix are only two of a large number of firms whose markets are expanding with telecommunications liberalisation.
While fixed telephony services are being deregulated the mobile sector is also maturing, creating opportunities for software companies that develop applications that enable value-added services.
Several such companies, both multinational and indigenous, are also active in Ireland, including Isocor, Logica Aldiscon, Aersoft and Conduit Software.
In addition, Motorola has a facility in Cork, which develops software for GSM mobile networks, and Lucent Technologies is rapidly ramping up its GSM development centre in Bray, Co Wicklow.
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