NEWS | Wednesday, 11 June 2008

Starting from tomorrow

Icon is not different to any other local IT firm in the problems it faces. If not more effective, it is different in the way it handles the challenges and volatility of the booming IT market. By DAVID DARMANIN

In the same way young people want to change the world, newly established firms often adopt a culture dictated by the proverbial “different way of doing things”. But in the same way most teens eventually get a haircut, graduate and settle for a 9 to 5 job, many start-ups will grow and morph into a conservative business that is in turn criticised by start-up successors.
Eight years is a long time in the IT field, and by then a lot of web development firms tend to go stale. It only takes a couple of good sales, a few healthy contacts and three or four ongoing projects of a certain size for any SME in the web industry to find itself working from a comfort zone. Most turn into template factories, dooming their creative personnel to a career of mass-produced, run-of-the-mill projects.
Because of the common traits these companies tend to share with each other, it is certainly refreshing to find that, so far, established setups such as Icon have retained the same exuberance and drive to innovate one would associate with Young Enterprise contestants at sixth form.
Both still in their 20s at the time, lawyer Gege Gatt and Ian Castillo founded Icon Studios as a multimedia design start-up in the year 2000, with a view to cater for the demand of disk-based and interactive media.
“When we started eight years ago, the market was essentially still pre-web. YouTube and instant messaging were unheard of at the time,” Gatt said.
“We have eventually moved on to web, but interestingly enough, it is not the web platform that we will be after in a short time. We are now looking into a concept called Software as a Service (SaaS), which is foreseen to be taking over the web industry. All applications previously running off your machine will now be running off the web. This is very advantageous since users will be benefiting from applications that are handled remotely, while providers will not have to worry about piracy. PC software as we know it is about to change.”
SaaS, typically pronounced ‘Sass’ is a model of software deployment where an application is hosted as a service provided to customers across the Internet. By eliminating the need to install and run the application on the customer’s own computer, SaaS alleviates the customer’s burden of software maintenance, ongoing operation, and support.
“SaaS is over all cheaper, and that is the primary advantage,” Gatt continued.
“When you purchase a SaaS licence, the product is rented rather than purchased. It is improved and updated as you use it so there is not even the issue of obsolescence. Besides, if users find themselves no longer in need of the software, or after trying it out they discover it is not suitable for their needs, all they must do is stop using it – and they would have only paid its rental, rather than having to fork out the investment to purchase it and then having to re-invest in a different package.
“We are always ready to accept changes. We did not know the web market would be taking over the disk-based market. We totally re-invent our product every two years. Developments in the web happen at a rate six times faster than developments in one’s lifetime.”
In fact, Icon Studios are in the process of yet another reinvention. Re-branding into just ICON, they will be adopting what they describe as “a bold new brand identity that reflects Icon’s renewed commitment to providing cutting edge, creative, technically superior web solutions.” Once that is sorted, they are planning on moving premises into an office block occupying a 600sqm area shared between a team of 15 people.
“We are looking into eventually moving to SmartCity. But in the interim we will be based in a 600 sqm premises in San Ġwann, which is currently being re-designed into a creative workspace for a creative team,” Gatt explained.
Castillo on his part went on to describe how their new offices, taking inspiration from the Microsoft and Google models, will be offering their team a state-of-the-art workplace aimed at boosting creative output.
“There will be segmentation between core production areas and chill out areas. We will not be introducing concepts that end up being counter-productive, but rather ideas to influence creativity. There are other simple ideas we will be introducing, such as providing fresh fruit to our staff,” Castillo explained.
In the early noughts a forward-looking foreign company had set up base in Malta with the offer of providing its staff with a quasi-utopian office setup. The concept turned out to be too good to be true. An in-house gymnasium, a sunbathing platform and a video games area were certainly not enough to guarantee the company to be even feasible, let alone lucrative. The Google model in that case did not go down too well.
“No, there won’t be a video games area, I don’t see the need for that,” Castillo said in his defence after being reminded of the nasty reputation this particular company had suffered after its finances went belly-up.
“I think it would be taking it too far that way. People here work from 8:00 to 17:00, with some occasional overtime. Too many distractions will automatically increase one’s time spent at work, and that goes against our philosophy. Overtime is acceptable, but expecting your team to live here would be taking it overboard. Google for example are now being criticised for taking over people’s lives. They have been offering counselling to family members, just to mention one idea of the many that just would not work in our case. We’re not after that model.”
“It is not your premises that make you successful in business,” Gatt added, “but if you’re savvy enough to take your company culture and project into your work space then you are bound to increase the chance of achieving your targets. Besides, space is very important to us, as it contributes to retain our staff, which is not an easy task. Here at Icon we use any means possible to, not only recruit suitable staff, but also to retain them in order to avoid them moving to our competitors. The company you mention did not have an issue with staff retention at the time, but times have changed. Now there is a reason why an IT company needs to have sexy offices.”
While benefiting from the perks of a booming industry as IT is, smaller firms are now resorting to the most innovative means possible to challenge a tough labour market, seeing that packages offered by the gaming industry and software factories are often hard to match. Some years ago, a handful of local IT firms were even forced to close shop due to workforces being drained up by IT giants setting up base in Malta.
“I would say there was a time when there was a degree of staff turnover, and that applied to the entire industry not just with us at Icon,” Castillo said. “Staff turnover will always be a problem in this industry. But we have actually managed to reach a level where turnover is much lower than that of any of our competitors. I think there are a number of factors that contribute to our staff retention, starting from the very nature of our job. We take pride in what we do, we promote teamwork and we encourage creativity. The average time-span for projects is of two months, and this helps all involved to see projects start and end. You’d be surprised how much that contributes to job satisfaction. Since large companies are bound to be involved in much bigger projects, their staff at times would be only involved in fractions of a job. Just like in any other job, when you can’t see the big picture your pride and satisfaction are ultimately affected.”
Being Microsoft Gold partners Icon also get to benefit from training opportunities that not all their competitors may have access to.
“We have a consultant coming in every month to provide training on the latest cutting edge Microsoft technology,” Castillo said.
A proper selection process is also key to the prevention of staff turnover. Gatt outlined how at Icon, recruitment policies are designed in such a way that a cultural mix is guaranteed, as this model is believed to be conducive to creativity and a healthier atmosphere.
“We don’t tend to subscribe to the model of letting only Maltese employees join. We have employed a number of foreigners and I think this has helped us create an international feel. We do this by using foreign recruitment agencies, while our website is used extensively to advertise vacancies. We have also partnered up with international student organisations in order to host one-year internships. This mix has helped us create a diverse and dynamic team.
“We have significantly changed our attitude to recruitment over the years. Nowadays we consider skill as secondary to attitude. The passion to do what we do is not something that can be thought – so we look for that first, and then we assess skills. A level of skill is of course needed, as you cannot possibly recruit non-technical people for technical jobs. However, we bulk up the skills with re-training.”
The headcount at Icon will grow to 20 by the end of the year, and will eventually grow by a further 10 in 2009. While they promote themselves as being the leading web development company in Malta, Icon contend: “Our objective has never been size but quality: we do not strive to be bigger, but better”. Asked to elaborate, Castillo said: “Our central belief is that quality is paramount. We can still be very efficient without being too large. We do not feel that in order to get a better product you have got to throw in ten more employees. The thought process is the most important side. We take creativity very, very seriously. The creativity process is also there to ensure our clients get a return on their investment. In the local industry we have seen that service providers have turned every product into a template, and this is wrong.”
At this point, Castillo was perhaps referring to the growing trend among IT companies in Malta to create a customised product upon a client’s specific request, profit from its development and eventually transform the same commission into an off-the-shelf product that is then redeployed in the market and made available to all, including competitors. Without condemning this trend outright, Gatt made it clear enough that it is not the type of business Icon is involved in.
“Repetitive software has its advantages of course, especially when you fine-tune each time you redeploy. I see no unfairness in this model since we operate in a free-market economy. In any case, we work in a completely different way. Our team is comprised of people with different specialisations and passions. We have people who are into art, photography, business strategy and other forms of expertise. These all help to create a remarkable and distinguishable product each time we deploy. Ultimately, our aim is to increase our customers’ sales. The way to do this is by creating a product that is ultimately suited to our customers’ needs. Using one customer to develop and finance a programme to eventually re-sell it to another fifty is a sign of small mindedness. This is unfortunately a very Maltese way of doing business,” he said.
The web accounts for 70 per cent of Icon’s business, while they are also involved in software development. Had they opted out of creating their own software development arm, Castillo explains they would not have survived.
“We made the decision to set up a software development department five or six years ago because we wanted to add value. When it came to creating ICON.snap, our content management system (CMS) that acts as a central back-end system for the web sites we develop, we had to choose between developing our own software or use one of the many open source programmes available for download on the web. But as we wanted to create a product that reflects what our clients need, we opted to launch a CMS that is developed in-house. We put so much thought into ICON.snap that it now caters for the different requirements of a diverse number of industries. We wouldn’t have survived had we decided not to go down this route. Furthermore, developing ICON.snap has also helped us build a software department, which has enabled us to be in a position to take new opportunities,” he said.
“Websites are people’s business online,” said Gatt in conclusion. “We have the responsibility to ensure that our team is equipped with all the possible skills to help our clients avoid the collapse of their business.”

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