IT departments in the UK have a strong pedigree of innovation, creating new revenue streams and business opportunities. Given our rich computing heritage, why should this surprise us? Ross Bentley gives UK IT a pat on the back
For IT workers the past 18 months have been undeniably tough. This period of retrenchment has offered some industry watchers the opportunity to decry the lack of innovation coming out of UK IT departments. But scratch the surface and you will find plenty of examples of IT professionals not only producing top-quality work but creating new revenue streams and opportunities for their businesses and themselves.
One example is information management company Kalido, which was spun out from global oil giant Shell as a separate software company in 2001. Since then Kalido has licensed its product to a number of blue-chip customers, including Philips and Cadbury Schweppes .
During the mid-1990s, Shell was having difficulty measuring business performance across its global business centres due to its vast range of incompatible computer systems. "For example, the Shell lubricants division had 35 separate computer systems across 45 countries," says Andy Hayler, who formerly worked within Shell's IT consultancy division and is now the chief executive of Kalido.
"There was no consistency of product definitions across the business - we were always adding apples to oranges."
Hayler and his team received funding to build an information management system in 1997 - a project that resulted in "1.7 million lines of code and some very clever algorithms".
After success within Shell, Hayler produced a business plan to develop Kalido as a commercial software program. "The problem that Kalido solves is a pervasive business problem - one that exists in every big company. Within the business plan we had to show market revenue projections, human resources and geographical issues and the potential return for shareholders."
Another £15m was raised for the new project. "There is a big difference between an application used internally and one produced for commercial use," says Hayler. "The code has to be far more bullet-proof, the documentation has to be far more ordered and it has to be customisable because there is no knowing which systems it will run on. In the end we spent 10 times as much on the commercial release compared with the internal application."
It was at this point Hayler went out to recruit a team of people he felt could take Kalido into the commercial world. He hired developers from Oracle and ICL and later when the company was incorporated he brought in a sales director from business intelligence supplier Cognos and a marketing director from IBM. "To make Kalido viable in the commercial world I had to bring in different skill sets - people who had lived and breathed the software industry," he says.
Not to underestimate the jump that has to be made between a smart piece of software for use in-house and one that is ready to go to market is a point picked up by Simon Johnson, vice-president and co-founder of remote access technology supplier Aspelle - a company that spun-off from the IT department at the London branch of investment bank Dresdner Kleinwort Wasserstein in June 2002.
"A lot of work is required to take an in-house product and build it into software of commercial-grade robustness," he says. "You have to take into consideration a much wider range of customer needs beyond what your own company has. There is also a huge amount of testing involved."
Johnson was previously a vice-president in DKW's IT department. Despite scouring the market for a remote-access product that would allow staff to telework from various locations, he could not find a suitable product.
His dilemma came to the attention of Microsoft, for which DKW had acted as a beta site over the years. Members of Johnson's team were invited to work with Microsoft in Redmond, which enabled them to accelerate the development of their Secure Sockets Layer virtual private network product.
"After a great deal of market research and a lot of support from within the company we were able to spin Aspelle out. It is the best thing I have ever done in terms of career development and it has been a fascinating journey," says Johnson.
Working with a software supplier to develop commercial software is a strategy that several UK IT departments have pursued.
In January 2003, Computer Weekly reported that Woolwich Independent Financial Advisors had partnered with Oracle to develop a customer tracking system. Alan Keegan, commercial development director at Woolwich, says, "Our partnership has enabled us to create a best-in-class technology solution while the cost of the software was very reasonable."
In what is a win-win situation Oracle is now selling the system to other financial firms with the same requirements. Keegan says the Woolwich staff who worked alongside Oracle are now occupying senior positions within Woolwich. "Our people have grown with the system," he says.
Another example is Yorkshire Building Society, which last year teamed up with Hewlett-Packard to turn its mortgage and savings system into an application service provider service for other building societies. Rob Jackson, operations director for YBS, says the system was developed three to four years ago to run YBS' business operations. "We built the system ourselves because there was no suitable off-the-shelf package," says Jackson.
The hosting deal will help the building society recoup development costs of £21m. "We now have a [software] asset that can bring in revenue," Jackson says.
Another approach is to license your application to a specialist software provider that will be able to bring to bear a greater expertise in developing your software. Proctor and Gamble did this last year when it licensed its software to product lifecycle management specialist MatrixOne. The application, which is based on the MatrixOne eMatrix product, provides a database of the technical specifications necessary to run a consumer package manufacturing business.
Steve David, chief information officer at Procter & Gamble, says, "We do not want to be in the software business," adding that it would be too costly to continue developing upgrades for the application.
The company no longer wanted to support the application and sees the licensing agreement as an opportunity to maintain the product's development while driving technical specification standards in consumer packaged goods and pharmaceutical industries.
Eureka! What are your intellectual property rights when you have a brainwave?
Unlike physical products, intellectual property can be copied and distributed very easily. This is why companies where intellectual property is a main asset, such as software houses are keen to protect it - to guard all their hard work.
Most workers are governed by a contract that will contain clauses stating that anything they produce at work belongs to the company that employs them.
Things may differ if you are working as a freelance consultant. Generally, unless you sign a similar contract to that mentioned above, which many consultants are asked to do, your work, whether it be software designs, architectures or code, belongs to you.
One grey area when dealing with intellectual property rights is "know-how". This refers to working methodologies, eg some consultants will have a unique methodology or approach to projects etc.
Of course, if you work at home after hours there is nothing stopping you from working on your own projects and developing your own programs. Usually in cases such as these the fruits of your labour belong to you and you will own the intellectual property rights of anything you come up with. However, beware, some employment contracts say work you do at home is also owned by your employers.
If you work on your own stuff during the lunch hour or stay late after work - the intellectual property rights to anything you produce will remain the property of your company. After all, you are using your organisation's IT, office equipment and electricity.
To ensure the intellectual property rights stay in your hands there has to be a clear delineation between work and home - and check your contract does not stop you owning them.
It is a complex area, and the above is only the basics. As with all such areas of the law, make sure you get your own independent legal advice. You do not want to lose the benefit of your work on a legal technicality.
Andrew Lucas is senior lawyer at law firm Simmons & Simmons ' www.simmons-simmons.com
Why the Brits are best
Five great UK technical universities
There is a lot of leading-edge development work going on inside academic institutions in the UK. Last month a contingency of 18 universities from around the UK demonstrated their technologies at the CeBIT exhibition in Hannover, Germany
1. Among their number was the University of Kent, which showed a system that chooses which biometric technology to use (iris, voice, fingerprints, handwriting or face recognition) in any given situation, depending upon the level of accuracy required.
2. A form of magnetic storage was presented by the University of Plymouth. Called magnetic random access memory (MRam) the technology could double the density, increase access speeds tenfold and lower the complexity and cost of data storage.
3. The University of Leeds demonstrated a computer simulation model, which could enable 3G network operators and equipment manufacturers to maximise available bandwidth and guarantee quality of service
4. Another technology on show was real-time signal analysis developed at Anglia Polytechnic University in Cambridge, which could be deployed to locate underwater wreckage, heat sources in nuclear power stations, leaks from pipes and seismic activity.
5. Using a new 600:1 data compression/decompression (Codec) system developed by Umist in Manchester, visitors at CeBIT were also able to see high-motion video for mobile phones.
Five good reasons why the IT revolution couldn't have happened without Blighty
1. The dawning of the computing age can be pinpointed precisely. On 21 June 1948, shortly after 11am, Baby, the first device we would recognise today as a computer carried out its first successful program run. This epochal event took place, not in Silicon Valley, but at Manchester University, more than seven years before Bill Gates was born.
2. Colossus, developed at Bletchley Park for use in code-breaking during World War II, started work in February 1944, and was instrumental in winning the war for the Allies. Though it was not programmable in the modern sense, having to be rewired each time you needed to run a different job, it was still a recognisable ancestor of the modern computer.
3. The first company in the world to appreciate that the computational power of early computers had applications in business administration was tea company J Lyons & Co. Lyon's computer, Leo, ran the world's first commercial calculation in September 1951.
4. GI Joes may have created Arpanet, and fellow Americans Bob Kahn and Vint Cerf may have developed TCP/IP, but it took British super-brain Tim Berners-Lee to create the World Wide Web. Without Berners-Lee, there would be no HTTP, no URLs, and therefore no global information space where the world can exchange data. The millions of teenagers now able to call up images of a scantily-clad Kylie at the press of a button owe him a debt of gratitude.
5. You will have to indulge us here, but Computer Weekly became the world's first newspaper for IT professionals when it opened in September 1966. "A computer is not a magic box," its launch editor wrote, and "software is not a pack of cards which, shuffled into the right order, can cause something to happen. They are an integrated package dependent upon each other." We have been offering thought leadership to the computer industry, home and abroad, ever since.
Five UK IT greats
1. Charles Babbage 1791-1871
Known as the "father of computing" 19th century politician, philosopher and inventor Charles Babbage is remembered for the designs he drew up for an analytical engine. The machine was designed to employ several features subsequently used in modern computers, including sequential control, branching and looping. But although Babbage worked on this project from 1830 until his death in 1871 it was never completed.
2. Alan Turing 1912-1954
While he is best known for his Enigma code-breaking exploits during the Second World War, Alan Turing's legacy is far wider reaching. His Acer machine was one of the first attempts at creating a true digital computer. He was also one of the first to come up with the concept of artificial intelligence and algorithms for digital computers.
3. Adam Osborne 1939-2003
Computer pioneer Adam Osborne had a brief stint as a computer mogul when in April 1981 the Osborne-1 computer was introduced. The Osborne-1, which was the first commercially available, reasonably priced (IBM introduced a $20,000 portable machine in 1975) portable personal computer, was a huge success but soon fell back to competition from another portable computer made by a new company called Compaq.
4. Clive Sinclair 1940-present day
Clive Sinclair is one of the best-known contemporary British inventors. In the 1970s and early 1980s, he applied solid-state electronics technology to produce the UK's first electronic calculator, a handheld personal computer and a digital watch. He is perhaps most fondly remembered for his C5 electric vehicle, which hit the streets in 1985. It is rumoured he is planning a new electric speedster hybrid - combining the C5 with that other classic British auto the Robin Reliant
5. Tim Berners-Lee 1955-Present day
The father of the World Wide Web is London-born computer programmer Tim Berners-Lee. After graduating with a degree in physics from Oxford University in 1976, he went on to join the Cern physics research centre in Switzerland as a consultant software engineer where he developed the World Wide Web as a global system to assist collaboration through hypertext.
Around the UK
South East - R&D expenditure here makes up almost a quarter of the UK total
Wales - more than 2,000 inward investment projects were secured into Wales between 1983 and 2000 - many in IT
Belfast - top-class universities, home to leading technology companies
Scotland - Sun, Motorola, Agilent, HP, IBM, Microsoft, Oracle, Cap Gemini, Wind River, Cadence, 3Com and Adobe all reside in "Silicon Glen"
Cambridge - leading-edge since the 1960s, many IT companies are Cambridge University spin-offs
West Midlands - Rapidly expanding e-commerce and software centre with more than 1,800 IT companies
North West - Liverpool is the fibre optic gateway to the US and Ireland, while Manchester is one of Europe's best shared service centre locations
South West - tradition of defence and aerospace know-how now directed at IT
London - regarded as the e-commerce capital of Europe