NEWS | Wednesday, 23 January 2008

No place for venture capitalism in Malta

Ross mason heads mulesource ltd, which markets an open-source software package. Here he talks to david darmanin about venture capital, innovation and mule

Founder and CEO of MuleSource Ltd, Ross Mason markets an open-source software package he came up with at the age of twenty-eight. The Malta office employs an odd ten people while between his offices in London and San Fransisco, he is in charge of another fifty IT specialists.
Although Mule is not a mammoth organisation, it is not common to find a thirty-two year old self-made entrepreneur running a business of this size, or at least not in Malta. Perhaps this is due to the fact that venture capitalism is a business culture that does not belong to Europe.
According to Mason himself, the U.S. is where this business model should stay.
MuleSource developed through Mule, an IT project you came up with, but how did it grow so fast?
My career has always centred on IT. In the past 11 years I have mainly worked on back-end systems for banks and insurance companies. My last job before setting up Mule was as a Lead Architect with RaboBank in London, where until 2003 I was setting up a fairly large system involving some very stressful back-end processes. To get different programmes connected, we needed to do a lot of the type of work that was time-wasting as much as it was necessary. Looking for a solution, I started working on Mule, a Java-based ESB and integration platform named after its intention to cut off the donkeywork involved in processes where different programmes are required to communicate with one another. I had left the bank and decided to dedicate myself almost completely to the project. Thanks to the attention this software started garnering in 2004, I founded a company called SymphonySoft Ltd, which among other things, administered Mule. In 2006, I met U.S. venture capitalist Done Rosenberg and together we opened MuleSource – based in San Francisco. We also have a satellite office here in Malta and another office in London.

What do you mean by ESB?
The acronym stands for Enterprise Service Bus. Imagine a channel, which in this case is called a bus, whose function is to carry information fed by different computer programmes. Mule, or any other ESB, is that bus. Mule doesn’t stop there though. It also works as an Integration Platform, meaning that it also feeds information received by a specific programme to another. Essentially, Mule is there to simplify the connection process between the different types of software.

What is the advantage of Mule over other ESB software systems?
Mainly that Mule is open source, and therefore free to download. It is also straightforward and user friendly, so our clients do not have to be highly skilled in IT to administer the software.

Clients? How do you have clients if the software is free anyway? How do you make your money?
By 2005 we saw that a good number of companies started using Mule, including the world’s top ten banks. Some Mule users have now made an agreement with us for the provision of ongoing support and customisation. They find it more convenient to work with us directly rather than subcontract it or use internal staff. Besides, we offer additional management tools to integrate with Mule that are neither open source nor free. This system allows MuleSource to offer high quality support and management tools in order to give our clients a complete view of the application.

What are the highest profile companies you have worked with using Mule?
Mule has linked all applications involved on Walmart’s website. H&R Block. another key client whose name is perhaps not known in Europe is actually the largest tax outsourcing firm in the U.S. H&R have a total of 13,000 offices spread across the U.S. – all of whose IT systems are connected by Mule. Leapfrog, an enormous toy manufacturer in the U.S. has had its front and back-end IT operations connected by Mule. Other companies we have worked with are CitiGroup, JP Morgan Chase, Deutsche Bank, American Airlines, Adobe and many government agencies throughout the world. Of course, there are other key clients whose name I am bound not to disclose.

What are your views on the IT industry in Malta? Is it worth investing money in?
There is high potential for investment in IT on the island, although we must keep in mind proper market positioning and strategy. Because Mule is a U.S. venture capital company, I was very interested in a discussion on venture capitalism in Malta that came up in a recent conference. It seems that to some extent, the Maltese government is flirting with the idea of promoting venture capitalism in Malta, but I don’t necessarily agree that this should be the most ideal way forward. The way it works in the U.S. is different. There, some conglomerates dedicate fancy budgets to investment in a good number of new setups originating from interesting ideas. If say one in a hundred is successful, they’re lucky. Of course, that one which works would make up for the losses of the other ninety-nine. I don’t believe this concept can take off in Malta. I think there should be more investment in ideas originating from Malta, and therefore a further focus on research and development. IT and MCAST graduates already have a high level of competence and if we are to invest in them it should be in the pursuit of innovation, not venture capitalism. Why not consider a proper research centre for IT in Malta?

Why is there a need to change strategy in IT? Can’t we keep attracting foreign companies as we are?
There are a lot of professional service companies in IT in Malta, and that is all good. Sadly, a lot do very little in terms on innovation. As we are, with a step-back in this market our economy will be highly threatened.

You mentioned that graduates in Malta are highly skilled. Do you think formal training in IT promotes the idea of innovation?
I can only react to what I hear from other stakeholders in the industry. It seems that most of our IT graduates are more driven towards technical skill. Our weakness lies in soft skills that are so badly needed in any day-to-day operation in IT. Generally speaking, we have seen problems in both written and spoken language, as well as communication and presentation skills. Working in IT also means selling ideas and solutions, as well as convincing people at different levels that your product is what the market requires.

So in realistic terms, where do you see the IT industry going in Malta? How do you see SmartCity fitting into the equation?
Malta is a resource niche, there’s no question about that. There should be investment directed at exploiting this core competence, such as opening fully equipped research laboratories. Otherwise salaries are already becoming prohibitive for the investor here. We run a risk of seeing an industry eating itself up, and that would be problematic for Malta at large. I think SmartCity should be addressing this issue. In fact, I’m very keen to see where this project is going. On the whole, I think that there is a very bright future for Malta. There are things that can be fixed, and these need to be planned out with maximum care.