Life ain't what it used to be

Reminiscing just isn?t what it used to be. And in IT it?s in short supply anyway ? given that the industry is still a mere slip of a youth compared to the world?s other major industrial sectors.

Yet for all this, the British software industry proper can now claim to be 40 years old if the computer programs and services pioneered in the mid to late 1950s are taken as the benchmark. Go back a century and a half to Ada Lovelace, and her suggestions to Babbage that his Analytical Engine might be used to calculate Bernoulli numbers, and you can establish an even lengthier bloodline.

Either way, the Computer Conservation Society ? a specialist sub-group of the British Computer Society ? believes it is time to celebrate, and accordingly organised a series of recent seminars featuring UK software pioneers.

It was a gathering of the men, and one woman, who helped start many of UK?s leading software houses, brought together to recall their early days in the industry.

Not surprisingly, the early pioneers had few fixed ideas about how their businesses would develop. The consensus was that it was a matter of reacting to events, rather than creating them. Nonetheless, many of their innovations are still being used ? or reproduced ? today, and sold to an unwary world as brand new concepts. Not so much a case of reinventing the wheel, but certainly a recycling of the code.

The notion that, in the wake of the Year 2000 crisis, women might be actively sought to help, is hardly new either.

Steve Shirley, founder of FI, recalls how in the pioneering days of her business she relied mainly on female home and part-time workers because this allowed her to employ staff whom she saw as otherwise excluded from the ?all-or-nothing? work pattern of most companies. This concept has been repackaged as teleworking.

But the BCS seminars also underlined major differences between the industry then and now. All the pioneers started small companies with a few pounds, and none of them had major financial backing. But, as Shirley notes: ?If you start a software house today, you most definitely need capital.?

The seminars also hinted at another important issue. One speaker pointed out that British companies are, apart from exceptions such as Sage, conspicuous by their absence from the packaged software sector, both for personal computers and larger machines. The UK?s strength, it seems, lies in custom software and outsourcing.

But this is also a weakness. For both today and 40 years ago, the British software industry is reacting to pressing demand from users for people who can set up effective computer systems.

The skills crisis is an indictment of an industry that has consistently failed to get its own house in order and ensure a sufficient supply of software skills.

The most successful software services companies are those that value their staff.

Alan Benjamin, a founder of Systems Programming Ltd (SPL), reveals how, in the late 1950s and early 1960s, a few people began to ?sense the need for programmers?.

Having first worked with ICT, a forerunner of ICL, Benjamin left to work with a customer who had purchased an ICT computer: ?If you sold a machine in those days you did that?. But he soon moved on, borrowing #200 to form SPL with two others.

The company?s lucky break came when the 1301 development team at ICT resorted to industrial action and SPL was asked by a major customer, the GCE examination board, to develop a system.

Another break came when SPL was asked by ICL to write a 1301 simulator for its 1900 range of computers, followed by a contract with Olivetti in Italy to develop an IBM-compatible system. Olivetti had found SPL?s name in the London telephone directory. It was as simple as that.

The contract was initially worth #50,000 over six months for SPL and developed into a long-term relationship.

As it lacked IBM experience, SPL had to poach trained staff from elsewhere. When an experienced IBM programmer left British Airways to join SPL, the giant airline threatened to sue the company, whose turnover by then had reached #750,000. According to Benjamin, as a result of the publicity over the affair, ?lots of systems programmers applied for jobs with us.?

SPL also claims to have won the first outsourcing contract in UK from the local authority in Inverness. SPL rented an ICL computer, hired local staff and charged the authority for its service.

As the 1960s boom in computing took hold, SPL grew rapidly with contracts in UK and overseas. One lesson the company learned early on was that if it wanted contracts from US companies operating in Europe, it had to had to go America to get them. ?We were told that all US companies took such decisions this way,? explains Benjamin.

By the end of the 1960s, Benjamin realised the company could not exist on #600 capital any more. Fixed price contracts were looming as users struggled to get control of costs. And the skills shortage was ever present: ?We had to organise a graduate intake program,? he recalls.

The end of the 1960s, according to Benjamin, marked the end of ?this no rules, risk-laden era?. But SPL wasn?t the only British company present at the birth of a revolution.

Computer Analysts and Programmers (CAP) also has its origins in the days when software development was a new idea. ?We badgered Yellow Pages into allocating us a new classification, Software Developers. We were the only ones in it,? reveals Barney Gibbons, one of the company?s pioneers.

Founded in 1962 with a loan of #750, CAP quickly won a contract from English Electric (another forerunner of ICL) to develop a compiler for one of its computers.

A second contract came when stockbroker Phillips & Drew decided it needed a stock dealing suite. It had bought a computer but didn?t have the staff to program it. ?In those days computer suppliers dumped machines on customers and told them to write their own programs,? Gibbons adds. ?We had no real competition and hardly ever quoted against each other.?

Eventually CAP discovered that another group with the same initials had been set up in France. The two groups eventually merged and formed CAP Europe to seek contracts outside UK and France.

Today, CAP is part of CGS, Europe?s largest independent software house, and one of the few pan-European companies in the sector that doesn?t come from the US.

According to Gibbons, CAP?s strength came from the ?realisation that training graduates turned into one of the best investments you can make for the future.?

Another early software pioneer was John Hoskyns, who had been working for IBM until BOAC, a state-owned forerunner of British Airways, asked him ? at the tender age of 35 ? to become its chief of information handling.

?In those days we thought we were being very witty with the word software. It wasn?t until about 1969 that the inverted commas came off the word,? he recalls.

Like others, BOAC wanted experienced people who could help it get started with computers.

But although Hoskyns left IBM, it wasn?t to join BOAC. Instead he opted to set up his own company: ?I had the feeling that something was going to happen.?

He identified the shortage of expertise in consultation and advice for businesses about computers.

?We started out with consulting, then realised we could provide enough people for business services, then software products, then training, then applications systems. That was when we began to get the leverage we needed.?

Hoskyn?s turning point was a Home Office contract for the Police National Computer system.

Bryan Mills, a founder of CMG, was also attracted by the idea of being a consultant, but was advised he should first get some business experience and accordingly spent 10 years as a salesman with Burroughs, selling punched-card accounting systems.

But he reveals: ?Eventually I decided to start a computer bureau, even though at that stage I had never seen a computer.? He remedied the knowledge deficit by enticing away a colleague from Burroughs.

CMG also started out with a low capitalisation. As Mills points out: ?Up to today we have never had to resort to an overdraft or outside money.?

CMG initially attempted to create a new market by developing what Mills says was the first full scale accounting package in the UK. But when he was asked to supply a programmer to an end-user at #80 a day, he realised that being a service company promised a more lucrative future.

By the end of the 1960s, says Mills, ?all the loot was coming in from writing application programs.?

?Our biggest stroke of luck came in 1968 from a contract with Readers Digest in the Netherlands. This led to the creation of a Dutch subsidiary which recruited some excellent Dutchmen and in turn led to some good business opportunities.? Today, two-thirds of CMG?s turn-over comes from the Netherlands.

But CMG?s distinguishing feature has been its innovative approach to staff. Mills again: ?CMG is a people business and entirely dependent on their ability to write good code.?

The company has developed a number of unusual features over the years, such as peer interviewing of potential recruits, training conducted by directors, and mixed groups of entrants ? people of different nationalities, all intended for different jobs within CMG.

The culture can be quite brutal and demanding, but that harshness has its limits. ?We demoted people who failed to perform, we didn?t fire them?, says Mills.

The outcome, he says, has been ?32 years of growth and profit, with the company still independent and still largely owned by employees.?

Today, CMG is worth about #1 billion. But which company can rightfully claim to have been the first UK software house?

Len Taylor, of Scicon, claims his company?s predecessor ? CEIR (which was founded in 1960) deserves that accolade. ?We had little or no competition,? he recalls. CEIR specialised in ?one-off scientific problem-solving for clients?.

Eventually BP bought out the US parent of CEIR and the UK subsidiary became Scicon. Before long, the company started to make money on the commercial as well as the scientific side, but relations with the new parent were poor.

?I can recall no positive communications between us and BP at the time?, says Taylor. ?So five of us decided to go off and set up Logica.?

The best funded of the UK software start-ups, Logica, kicked off with an investment of $100,000 from a US company which later sold out at a big profit.

Logica?s first big break was ?Cobol body-shopping? for ICL. The UK giant asked Logica to supply a dozen programmers for two years to help develop the Driver and Vehicle Licensing Centre computer system in Swansea. As Taylor notes: ?We only had seven members of staff but we were able to pick up programmers made redundant by British Steel in South Wales.?

In the end, Logica placed 20 to 30 people in Swansea for three or four years.

Not that Taylor believes that the earlier pioneers had an easy time of it merely because there was less competition. By comparison, he suggests, ?selling seems to be a doddle these days because there is so much business around. Staff work shorter hours for more money, which is good. But it was more fun then.?

What seems to distinguish the companies that have continued to thrive is their understanding that software houses depend on the people they employ and their ability to keep them.

Hoskyns sums up: ?Looking back we can see that the software industry has an incredibly voracious appetite for people. That is the real resource, not quantity of capital.?