David MacDonald

I went to Trinity College on the advice of a friend of my father who said that the quality of education was better there than at UCD. I studied maths, physics and chemistry and graduated in 1971 with a natural sciences degree. During the final year I wrote a program in Fortran on how to calculate standard mean deviations.

Technicon hired me as a production controller at its factory in Swords and subsequently transferred me to a distribution centre in Belgium where I worked on supply chain logistics. I returned to Ireland in spring 1978 to join Amdahl, which was setting up an assembly and test facility in Swords for its mainframe computers. I went on to become the operations director there.

Gene Amdahl, the company’s founder, left to launch Trilogy and I followed him into the new venture in February 1982. He was a brilliant scientist, but Trilogy tried to push mainframe technology a bridge too far. At a time when the world’s most powerful commercial computers ran at just 4 Mips, Gene Amdahl masterminded the development of a 25 Mips processor and the capability to deliver 100 Mips on a single computer. Its architecture was predicated on a piece of silicon with 144,000 transistors and four layers of metal for their interconnectivity.

Trilogy’s core competence was phenomenal innovation and it employed bleeding edge talent in Silicon Valley to develop and manufacture the semiconductor. It planned to build all of its computers in Ireland and I went to California to work on design for manufacturing. I expected to return within months and set up a production unit in Blanchardstown, but problems with water cooling for the new chip slowed down the entire project.

By July 1984 the chances of the Blanchardstown facility going ahead looked slim, so I asked to be laid off from Trilogy. I was keen to get home for family reasons. We were hoping to adopt a child and we were nearing the age limit for prospective parents. We returned to Ireland and proceeded to adopt a daughter and a son.

Twelve years working for American technology companies had taught me how they operated. I knew that they believed strongly in management training and development. I had seen how managers became masters in specific fields and pursued their metier in depth. I also understood why companies would only farm out certain activities to their subsidiaries outside the US. Anything that was strategically vital or highly uncertain stayed close to corporate headquarters.

What I did not realise was how brave a decision it was to return to Ireland at a time of low availability of jobs. There were many experienced people looking for opportunities in high tech manufacturing in 1984.

Lotus Development hired me in November as general manager for its new operation in Santry. The company had previously chosen an American for this role, but that appointment did not work out. Lotus was the industry’s largest supplier of PC software. Its 1-2-3 product, which first shipped in January 1983, was a spreadsheet supported by a database and business graphics. Symphony, which it released in June 1984, added word processing and communications to the functionality of 1-2-3. Lotus was expanding very fast.

Mitch Kapor, who had founded the company in 1982, retired as president (at the age of 34) shortly before I joined. Former McKinsey consultant Jim Manzi took over as president, but the corporate culture that Kapor had created did not change. Lotus was based in Cambridge, Massachusetts but it was run in the style that I had seen in Silicon Valley. The dominant decision makers were product developers and marketing specialists. Lotus valued all its employees equally and was committed to providing challenging work and opportunities for individuals to improve their lot. That culture and the dramatic growth of the PC software trade made Lotus an attractive employer.

The mission statement for Lotus Development Ireland (LDI) was, however, very specific and excluded activities such as product development, marketing and sales. Santry’s task was to duplicate disks and to print materials. This sort of manufacturing would be easy stuff. But I never saw the original responsibilities as sustainable. There were sure to be other services and other places where the work could be done at a lower cost.

LDI commenced operations in March 1985 and it quickly gained a good reputation within the corporation. I had been able to hire high quality people because there was so little high quality work available in Ireland.

Quality control manager Terry McGrotty redesigned the box for Symphony, reducing the production cost and saving Lotus about $0.5 million a year. This was just one example of LDI management seeking to expand its mandate. Cost management, however, was not yet a priority for the company.

Lotus and other American software firms were just beginning to consider how they could deliver versions of their products in languages other than English. Its two main rivals – Microsoft and Ashton-Tate – had recently developed French and German applications in collaboration with their distributors in those countries. Lotus chose a different approach. It had established a UK subsidiary in Windsor in January 1984 and set up a product development group there in the middle of that year. Its first task was to create French and German versions of Symphony. In summer 1985 Lotus decided to introduce Dutch, Spanish, Italian and Swedish versions as well.

David displays the company’s product in a magazine article about Lotus Development Ireland.
(Source: Magill magazine, March 1987)

As part of Lotus’s early localisation strategy Chuck Digate, who headed its international operations, expressed an interest in late 1985 in buying a minority shareholding in a localisation subcontractor. I identified seven potential candidates in Ireland and selected one of them, Softrans, for further investigation. After an exploratory meeting with Softrans, however, Digate abandoned the idea of investing in a localisation partner.

At around the same time LDI started shipping Spanish language products to South America and changed the word ‘European’ in its mission statement to ‘international’. In the first half of 1986 it also began to supply software packages to Australia and – after proving that Irish printers could produce Japanese manuals – to Japan.

The abilities of LDI were still underemployed. During 1986 it also became clear that the product development group in Windsor wanted more technical challenges. Localisation was its core mission, but the engineers there had little interest in that role. Furthermore, Lotus had committed itself in 1984 to re-examining its activities in Ireland after two years. These circumstances made it possible for me to argue that LDI had a legitimate right to expect more challenging assignments, such as development work. Around that time I suggested to the IDA that it should make a formal presentation about this to Lotus in Boston. Chuck Digate accepted this logic and agreed terms with the IDA to expand the Irish subsidiary. A decision to transfer European localisation from Windsor to Santry was announced inside the company in August 1986.

Working with John Bonney, the European product development manager, I drew up plans to hire and train a product development manager for Dublin. In October, however, Steve Turner, the director of international product development interviewed and rejected two candidates. We called in a new recruitment consultant and the job eventually went to Manus Hanratty, who had previously worked with Measurex in Waterford. He arrived in Santry in early 1987 and localisation work began in March.

There were no localisation management tools available in 1987 and our processes were very loose. Localisation was still in its early childhood – not even a teenager yet – and a lot of the people who later built the industry came through Lotus.

Manus was the boss at the localisation group. He was very determined about what he wanted it to do, but was also inclined to give people autonomy in a way that was consistent with the Lotus culture. He was able to hire good people like Stephen Brennan, who initiated support for Middle Eastern languages and later became director of localisation at Symantec, Aengus McClean who went on to senior roles at AOL, Caitríona MacAonghusa who moved to Oracle and Mervyn Dyke who subsequently founded Vistatec.

Bill Kearney stayed at Lotus after IBM bought the company in 1995 and became a senior development manager there. Patti McCann went on to Visio, and then Microsoft, and Fiona Agnew went on to Novell.

David completed this thesis for an MSc in management practice at TCD in August 1987. It records the strategy and process behind his efforts to persuade Lotus to assign localisation responsibilities to its Irish subsidiary.

Lotus kept asking me to move into more senior jobs, first in the US and then in the UK. When the product development group was up and running I agreed to take charge of international finance and administration, commuting from Dublin to Windsor for four days a week. Lotus later insisted that I live in the UK. In the early 1990s I took over responsibility for the corporation’s activities in less established international markets, including the USSR, where I formed a partnership with an institute that employed 5,000 people in the automation of statistics collection.

I wanted to get back to Ireland and managed to do so in 1992, when Lotus asked me to set up an international consulting group and agreed that I could run it from anywhere. I discovered, though, that I would need to travel constantly to meet software implementers and applications developers that were working with Lotus Notes. You either thrive on that sort of routine or it kills you.

When I found that I was missing every parent-teacher meeting I let it be known that I was looking for another job. Then a headhunter approached me about taking charge of a computer company in Ireland. I hoped that this would be a high growth, fast developing company such as Hewlett-Packard. But I became the managing director of ICL Ireland for five years.

ICL’s core competence was selling. I learned the value of great salespeople in my years there. The company was interested in me because it was transitioning from a traditional computer hardware business into software and services. But its products were poor. ICL’s Unix-based OfficePower suite was the most unintuitive software I had ever seen and the company mistakenly thought that it could compete against Microsoft in office applications when it bought Finnish developer Teamware.

ICL was a tough ship to steer and I returned to the software localisation business in 1998. This followed an approach by Kevin Henry, who worked at a subsidiary of venture capital company DCC. DCC had recently taken over Bray-based localisation service provider International Translation and Publishing (ITP) and Kevin asked me to suggest people who might be interested in running it. I surprised him by replying that I would take on the job if the terms were right.

DDC had bought a 20 per cent stake in ITP in 1994 with an option to buy the rest of the company at a future date. Founder Finbarr Power departed shortly after it exercised this option. The value of the transaction was based on ITP’s financial performance in its trading year to March 1997, when the company had generated a stellar profit. The way that it achieved this had alienated many of its customers and ITP was now losing money. Before I took on the job DCC showed me the books and they were not a pretty sight. The investment firm wanted me to get the business back into shape and to return it to profitability.

I was confident that I could turn the company around, but this did not happen as quickly as I had hoped. It soon became clear that some of ITP’s former clients had been badly hurt and were not going to use the company’s services again.

What shocked me about the localisation industry as a whole in 1998 was its lack of purchasing process. Inexperienced people in the lower levels of software companies were making big purchasing decisions that would have been subject to financial and technical due diligence in a company like ICL.

ITP had a good management team that knew the nuts and bolts of the localisation industry. Some of its 200 employees worked at subsidiaries in France, Japan and China. ITP had also set up one joint venture in Hungary, which carried out most of its engineering work and another in Italy. Over the next two years I managed these operations, oversaw the introduction of new workflow processes and launched a new localisation service for web content.

We were not yet making real money when the valuations of dot com businesses reached their highest level. We could see, however, that the localisation trade was consolidating through a series of mergers and acquisitions. DCC no longer regarded ITP as a core asset. It was not only willing to sell the company but also promised that the ITP management would benefit from any deal. SDL International bought the company at the end of March 2000 – about ten days after the dot com market peaked.

The localisation industry went through two distinct episodes of consolidation – one in the mid-1990s and another at the turn of the century. Both rounds were driven by the aspirations of the larger service providers, such as SDL, to dominate the delivery of translation and engineering services. But it was just not possible for anyone to establish a big monolith and to close out competitors. The barriers to entry were so low that it was always easy for mom and pop stores to set up new localisation services.

When companies were taken over, therefore, the buyers gained the customer databases but not the customer relationships.

I had known Tony O’Dowd from his creative work on localisation tools in Lotus. He moved to Symantec and then to Corel, where he created a project management system for software localisation. Corel began to sell this technology to other companies in 1997. In December 2000 it spun off the business to a new venture, Alchemy Software Development, and Tony asked me to join as CEO. When we discussed this, however, it was evident that he really wanted to become the chief executive, so I said that I would prefer to chair the company. I took on this role, holding monthly meetings to discuss the company’s finances and product strategy, until Translations.com acquired Alchemy in 2008.

Localisation, like many businesses, is all about identifying and retaining good people, giving them the freedom to develop the business in previously unenvisaged ways. It is also about taking initiatives and not just doing a day job.

Last edit: January 2018

© David MacDonald 2018