FT: The grail seeker who came good

The grail seeker who came good

By James Wilson and Chris Nuttall

Published: June 19 2007 17:26 | Last updated: June 19 2007 17:26

Transitive, a young British software company, was born to bridge the most daunting of gaps. In its six-year existence it has handled two big divides with assurance: first, it made a quantum leap to enable applications to run on different computer systems; and second, it crossed the gulf between Silicon Valley and its European home.

In Transitive’s offices in Manchester, dozens of computer scientists work on technology that allows applications written for one operating system and processor to run on a different system and processor, without the expense and complication of software rewrites. Eight time zones away in California, Transitive’s chief executive and marketing staff are finding growing enthusiasm for their product from some of the biggest names in computing.

Steve Jobs, Apple’s chief executive, renamed Transitive’s software Rosetta, after the Rosetta Stone – the key to translating the untranslatable. His company gave Transitive its breakthrough two years ago when its software paved the way for programs written for Apple’s PowerPC-based computers to run on Intel-based Macs, allowing Apple to switch the processors it used with relative ease. Jobs praised the smooth switchover and more than 6m Macs now use Transitive’s technology. Hewlett-Packard, IBM, Intel and Sun Microsystems have gone on to become customers and partners.

Bob Wiederhold, Transitive’s chief executive, says the products decouple software applications from computer hardware and are “changing people’s expectations about the useful life of their software”. Alasdair Rawsthorne, the company’s founder and chief technology officer, says the company’s deal with IBM, in particular, is proof of the company’s prospects. “We have a great beachhead in our potential markets,” he says.

Transitive’s story is instructive for British start-ups that may feel Silicon Valley is beyond their reach or an unnecessary complication. Mr Rawsthorne, who started the company based on a research project at Manchester University, is clear that Transitive needed a US presence from its earliest days. With support from Pond Venture Partners, one of its first venture capital backers along with Manchester Technology Fund, Transitive straddled the Atlantic, getting closer to clients in the US while retaining a talented group of software engineers in the UK.

Richard Irving, managing partner at Pond – named for its transatlantic outlook – says: “There is plenty of great technology in Europe but unfortunately most of the venture capital funds [there] are staffed with people that don’t understand technology and consequently can’t appraise the company until it’s become well established, so when the company is at the seed stage it makes it pretty unmarketable to the European VC.

“We met Transitive when they were a bunch of academics and post-grad students . . . they had phenomenal technology but no idea how to write a business plan. We looked into it and of course wanted to invest.”

Mr Irving also makes the point that US companies tend to be earlier adopters of innovation and are consequently better customers. Mr Rawsthorne says: “The openness to new technology of the big tech companies is much more apparent in the US than in Europe. It is something about the US can-do culture. In Europe companies always come up with 100 different reasons why they shouldn’t do something.”

Transitive’s revenues in 2006 were $5.6m, up from $2.4m in 2005. It has about 15 people in Los Gatos, including Mr Wiederhold, and 85 in Manchester, including Mr Rawsthorne. The far-flung organisation has its advantages, says Mr Rawsthorne: software engineers in the UK can get in a full day’s work before briefing marketing staff in the US at the start of their working day.

Mr Irving says: “You have to get comfortable with communicating across a few thousand miles, and Transitive have been fantastic at that: they’ve never had the problem of one location pointing the finger at another.”

For Mr Rawsthorne, Transitive’s development meant deciding to stand aside from the leadership of the company and welcome an experienced chief executive (Mr Wiederhold is the second in the role). He reflects: “In the very first days I might have had aspirations in that direction but I quickly got comfortable with the idea that there was a role I could play as a senior technologist, different from a CEO role where you are responsible for all the operations and all the public face.” The structure emerged in the first few months of talking to Pond, even before the spin-out.

“I have no regrets about not being the big cheese. I am quite relieved,” he says. But it is clear he feels a sense of loss as he reflects on how the company has grown.

“For the first group of people I wrote all the job offers, signed the leases and bought all the first computers on my credit card,” he says. “Now I can concentrate 100 per cent on one thing but there is still a feeling that I used to do a lot more stuff. There is a lot going on that I do not know about.”

Transitive’s plans are, like its full customer list, kept under wraps. Its future could entail a sale to a big technology company or an initial public offering. But with its technology working on desktop computers and servers, it is eyeing other markets. These could be in handheld devices or anything with a semiconductor in its innards.

Mr Wiederhold, 47, forecasts opportunities in defence and aerospace and says Transitive’s products could also work for games consoles. “We were a little bit too late for the last cycle – Microsoft moved from an x86 to a PowerPC processor, we think we could have provided them with a great solution to running old games on the new [Xbox 360] system,” he says. “Anywhere that you have software running on one processor and you want to get it to run on another, we can dramatically cut the risks.”

Mr Rawsthorne, 54, who still does some teaching at Manchester University, says he has had “way too much fun” to end his entrepreneurial career with only one start-up under his belt.

“Eventually I want to go back to the university and do it all over again,” he says. “I am looking forward to finding an impossible problem that has not been worked to death and creating something interesting. I am looking forward to Transitive being able to do without me. I can see that it has grown up, pat it on the back and send it on its way.”

How Transitive set technology free

Transitive has found what some describe as the Holy Grail of computing.

Others have been able to write software that allows programmes designed for one computer processor and operating system to work with a different combination, but they have suffered from poor, slower-running performance.

Transitive’s QuickTransit software carries out this translation without any noticeable deterioration in performance. In many instances, the programmes run much faster as companies are trading up from older systems to faster processors in the latest hardware, while still using the same software.

The effect is to unshackle companies from legacy systems. The fear that they will have to abandon familiar programmes to upgrade to new equipment can discourage change.

Silicon Valley companies view Transitive’s software as opening up new markets. Diane Bryant, vice-president of Intel’s Server Platforms group, sees Transitive as luring companies across to using its high-end Itanium processors by making programs written for Sun’s Sparc processors and Solaris operating system run seamlessly on Itanium.

“Transitive has a great technology and we are working with them as a way of opening up the application space,” she says.

Secret ingredient: Manchester graduates

Transitive attributes much of its success to its core of Manchester computer scientists.

Alasdair Rawsthorne, who has been at the university for 30 years, founded the company with his research group of students, all but one of whom is still with the company. Now about two-thirds of Transitive’s Manchester staff are graduates from the university. Mr Rawsthorne calls it “a unique pipeline”.

“The university pours out loads of really good computer scientists who want to stay in Manchester if there is something interesting for them to do,” he says.

Transitive believes its marketing staff are best based in the US but Richard Irving, managing partner at Pond Venture Capital, one of Transitive’s investors, says: “There’s no reason to move the R&D [to California]. Quite the opposite – the University of Manchester has a great
computer science school so you are going to get the best graduates every year.”

Manchester is also a cheaper place to base staff than the US. The distance, moreover, means Transitive is relatively safe from the battles for talented staff that rumble through Silicon Valley, inflating salaries and accelerating turnover.

“If we were in Silicon Valley there would be headhunters calling our staff several times a day,” Mr Rawsthorne says.

Copyright The Financial Times Limited 2007