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With DNA From DEC and HP, Galway Builds Startup Hub Outside Dublin

With DNA From DEC and HP, Galway Builds Startup Hub Outside Dublin

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Irish economic development officials. He says he connected with Galway.

“We saw Galway as the fantastic alternative opportunity where we can get the same talented folks, but we can be in a smaller market and become a bigger name,” Kane says.

It would be hard for SmartBear to stand out in Dublin, where there’s a much larger software community, Kane says. Dublin is also more expensive, so the company’s office probably wouldn’t have been in the heart of downtown, next to the likes of Facebook and Google.

SmartBear, which employs some 300 people worldwide, has hired 12 staff in Galway and could grow that to 30 or 40 in the next couple of years, says Kane, who directs SmartBear’s Europe, Middle East, and Africa operations. He says his company has found Galway workers to be loyal, and it has attracted Galway natives who were looking for a cool job opportunity to bring them back home.

The talent issue looms large for a growing company, and loyalty is key.

“Bigger cities that have those big companies landing into town, you have to worry with job-hoppers and attrition, because six months from now there’s a new Silicon Valley-based company that just raised a boatload of cash, shows up to town, and starts dangling stock options,” says Kane, whose company is owned by New York-based private equity firm Insight Venture Partners. “You don’t want to worry that your whole sales team is going to jump ship chasing after the next shiny object.”

SmartBear aims to be an anchor tech company for Galway. It set up shop in the heart of downtown, which is actually unusual there because most tech companies are housed in business parks on the city’s outskirts.

“I think it is a landmark investment for Galway,” says Mark Gantly, managing director of HP’s Galway office and senior R&D director for HP’s cloud services business. “Other people will take note.”

More software companies will need to locate in downtown Galway if the city wants to “create that urban vibe” and attract more IT companies, Gantly says. One idea that could help, he says, is a plan to push some of the port activities out to deeper water and redevelop the current docks area for cultural amenities, office space, and other uses. “That would create a very nice environment for startups,” says Gantly, who also serves as Ireland’s western region chair for the American Chamber of Commerce.

Galway docks

Galway docks at night. Used under Creative Commons license from Flickr user ConorLuddy:

Galway’s tech scene traces its roots back to 1971, when Digital Equipment Corp. (DEC) opened a computer manufacturing facility there. The company was founded in 1957 by MIT electronics engineers Ken Olsen and Harlan Anderson, and went on to pioneer low-cost minicomputers.

“The question around Galway is always puzzling because the obvious locations at that time would’ve been Dublin or Shannon, just in terms of connectivity and scale,” Gantly says. But Olsen tended to plant company operations in smaller cities, like Burlington, VT, because he was a community-minded “family man” who believed he could build stronger allegiance among employees in a smaller city, Gantly says. “That was definitely the case” with Galway, he adds.

Gantly joined DEC’s Galway operation in 1983 as a test engineer and stuck with the company through its acquisition by Compaq in 1998 and HP’s subsequent acquisition of Compaq in 2002. DEC’s local operations peaked at more than 1,000 people.

Workers assemble electronics at Digital Equipment Corp.'s Galway facility, circa 1974. The company is now part of Hewlett-Packard, and HP still operates from this building. Photo courtesy of HP Galway.

Workers assemble electronics at Digital Equipment Corp.’s Galway facility, circa 1974. The company is now part of Hewlett-Packard, and HP still operates from this building. Photo courtesy of HP Galway.

It devastated the local economy in 1993 when the company cut about 900 people in “one fell swoop” as it ceased hardware manufacturing in Ireland, during a time when commodity computer manufacturing moved to lower-cost countries, Gantly says. “That was kind of cataclysmic for the economy in the west of Ireland,” he says.

Thanks to a global economic upswing at the time, most of those workers were able to find new jobs nearby with … Next Page »

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2 responses to “With DNA From DEC and HP, Galway Builds Startup Hub Outside Dublin”

  1. Great article, Jeff, and thanks for the mention of Altocloud. As you and John Breslin mention later in the article, once a startup starts operating globally, by connecting Galway with Silicon Valley and with other European and Asia Pacific tech centers, then there is typically no need to also “move out” to other cities in Ireland. With a broader global footprint the primary concern for the “Irish centre” becomes talent availability, talent retention and cost/quality of life – which are all areas where Galway “shines” :).

    • Jeff Bauter EngelJeff Engel says:

      Thanks for reading Xconomy, Lawrence. Seems like Galway is making a lot of effort to raise its profile and boost the tech community. I got a chance to hang out at a Startup Galway event while I was there, and there was plenty of energy in the room. It will be interesting to see where things go from here.

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