Software development in Austria is outdated

For original German article, please click here

In order to be able to meet the increasing customer demands for individual software, the local IT service provider Hexa has teamed up with the offshore-specialist Nagarro and operates as Nagarro Austria since January 1.

Since the beginning of this year, the name Hexa Business Services is outdated. From now on, Hexa will serve as the Austrian subsidiary of the global active Nagarro. With enhanced services, offshoring and industry capabilities, Nagarro is aiming at a 25 percent turnover growth in Austria and an annual turnover of about 7.5 million Euros. The company is planning on expanding its facilities throughout Austria as well as exchanging service portfolios with other subsidiaries. This year's focus lies especially on cloud and process consulting as well as software development.

Former Hexa managing director Damianos Soumelidis now finds himself leading Nagarro in Austria and discussed the changed service portfolio and advantages of acquisition for domestic customers with COMPUTERWELT.

The below discussion was moderated by Alex Wolschann

What were the motives for the acquisition by Nagarro?

We have grown to more than 40 employees since the founding of Hexa in 2010 and the merger with our sister company ComSolution. Organic growth is very difficult and tedious. We had already embodied in our business plan that we want to have a partner, who should get at least 25 percent in order to safeguard further growth in our business plan.

Nagarro was founded by four Stanford graduates and is actually a US-American-Indian company. The company mainly deals with offshoring, but has a strong local focus nevertheless, in order to be able to handle offshoring issues, such as different languages and cultures with ease. This model is now to be implemented in this country as well and we are the local point of contact for Nagarro customers in Austria.

Has the acquisition resulted in any changes in the solution portfolio?

Additionally to the original offerings, like cloud consulting and implementation, software development has been added to the portfolio. Nagarro has been developing software for the past 15 years. Our missionary work in the cloud computing area of the recent years is now bearing fruits in Austria as well – more and more companies want to implement cloud projects. However, this also means that it does not suffice to have a cloud platform while still offering outdated monolithic applications. Hence, adaptations and new developments of essence. As Nagarro, we now have the ability to offer such redesigns. Until now, we were able to provide consulting, design and migration, but we were unable to develop any applications and if so only in small quantities. Now we have 1,800 developers to our disposal.

Did it become necessary to have individual applications in the company?

Absolutely! Especially concerning the cloud, but not exclusively. Sensory technology, Internet of things, Industry 4.0 – all of these areas require new software. It is difficult to find well-trained developers in Austria, apart from the fact that they cost a fortune. Nagarro has very well trained developers spread across the globe, particularly in India and Romania, which, of course leads to economic advantages. However, we do not steer towards pure, classical offshoring; that does not function as well. We have been trying a hybrid model for some time. Ten percent of a project team is always Austrian, which is very important..

As Hexa, we occasionally offered operations management on traditional platforms, in future, we will solely be focusing on cloud platforms and in conclusion, we will be offering software development for exactly these platforms. Furthermore, we also are the Cloud-Practice International for Nagarro, which means that we lead this field for the entire division. This also indicates training and further education. 

Do you also need new employees as Nagarro in Austria?

We are currently desperately searching for people, who already have senior status, who can orchestrate remote teams, have a sound technical understanding and who above all have an architectural understanding. They do not necessarily have to be software developers. Nevertheless, these people are extremely hard to find. However, fortunately their number is increasing, which I discovered during my lectureship about cloud computing at the University of Applied Sciences Technikum Wien. In the first semester, I had five students, in the second ten; this semester 36 students will take the exam. There is some positive development in this area. Even the basic knowledge of these students is continuously increasing. That is very encouraging.

What the future simply does not hold for Austria anymore, however, is software development; that is definitely outdated. That can be done by others better and for a lower price. The combination of a fast delivery of good quality at an appealing price is simply not as attractive anymore in Austria compared to other countries.

Why the complete focus on cloud? Are security concerns still an obstacle for many users?

I do not want to diminish the topic of security and cloud, quite the opposite. However, many companies for whom cloud seems dubious or who do not want to deal with that seem to hide behind the security aspect. A company does not have to move everything to the Cloud, why should it anyway? However, there is no logical reason not to move the email service to the cloud. Simply put, every email travels in clear text over the Internet, so what is the difference? In companies, two forces have an impact on the decision makers: on one hand, employees and on the other hand business departments. Those working with cloud services, and are relatively uninterested in the in the technical aspect of it all, but have seen that it works, particularly when it works quickly, and produces reasonable costs. They consequently pressure the decision makers and the IT departments must react. Even to the increasing pressure of costs.

Interview by Alex Wolschann.

Damianos Soumelidis:

Damianos Soumelidis has 28 years of experience in the IT industry, including a total of 15 years operational experience in the managed services and outsourcing sector and 11 years in the software engineering sector. He is founder of the consulting company Hexa Business Services. Prior to that, he served as Managing Director at S&T Austria and Country Operations Officer at EDS Austria. He furthermore has held several management positions at Compaq Computer, Vienna Insurance Group and Bull Computer.