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Bulgarian Company Homes In on Technological Niche

Views on BG | October 31, 2012, Wednesday // 13:39| Views: 1121 | Comments: 0
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from The New York Times

Ten years after it started in business, Telerik, a Bulgarian software company, has conquered a niche position in the international information technology market and continues to expand.

Telerik sells user interface components, content management solutions and Microsoft developer tools that allow programmers to build their own applications. More than 100,000 clients in 94 countries now use its products, including brands as well known as Nike, Nokia and Mercedes-Benz, and international organizations like the World Bank and the U.S. space agency, NASA.

Founded by four friends in 2002, the company has grown rapidly by targeting customers far beyond Bulgaria's borders rather than limiting itself to the small local market.

"America has the most developed information technologies market and thus we have the biggest number of clients in North America," said Svetozar Georgiev, co-founder and chief executive.

In 2006 Telerik chose the United States to open its first office abroad. Four years later it added to its U.S. exposure by buying ArtOfTest, a producer of software testing tools.

"We discover interesting small companies whose projects, or just their teams, complement well our company," Mr. Georgiev said in an e-mail. "As the Silicon Valley drives IT development and innovation, the United States as a whole is an incubator of targets we're interested to acquire."

Bulgaria, which joined the European Union in 2007, has positioned itself as having one of the fastest-developing information technology industries in Europe. Low labor costs and taxes, and a pool of talented IT professionals have made Sofia a favored outsourcing destination for many foreign computer companies. Still, the economic crisis of the past three years has not passed the sector by.

The domestic IT market in Bulgaria shrank by 15 percent in 2009 and has not yet fully recovered, said Lubomir Dimitrov, a research analyst in Sofia for IDC, an international market intelligence company that follows the IT industry. However, he said, software companies had been affected less than most of the industry by the crisis. A survey by the Bulgarian Association of Software Companies showed that in 2011 their sales grew by 6 percent, an increase generated mainly by exports.

"Many companies have focused their efforts on foreign markets, which are more mature and tend to grow much more compared to Bulgaria," Mr. Dimitrov said.

As one of those companies, Telerik has continued to expand even during the crisis. In addition to its U.S. branches, it has offices in Germany, Britain, Canada, Australia and India. Since 2008 its work force has grown to 650 people, adding more than 150 jobs in the past year.

Alan Zeichick, co-founder and editorial director of SD Times, a U.S. software development magazine, said Telerik had established itself as a leading maker of Microsoft-based tools. "We consider Telerik as one of the innovators in the field of reusable software components for Windows and .NET developers," he said.

For six years in a row Telerik has made it into the SD Times's annual Top 100 ranking of the leading and most innovative companies in the field. "We have been impressed each year with both the quality of Telerik's software tools, but also the new features that they consistently add to each new version," Mr. Zeichick said.

In 2010 the company also received Microsoft's Partner of the Year award for Central and Eastern Europe.

James Mundy, co-founder and developer at Mendzapp, a tech start-up in Sheffield, England, said he had used Telerik's controls in some of Mendzapp's Windows Phone applications for over a year, because they were, he said, "the best available for Windows Phone."

"They make adding complex functionality to apps quick and pain-free, as well as significantly reducing the development time needed," he said in an e-mail. Noting that price was also a factor, he added: "Being a small student start-up we don't have a great deal of money." A suite of Telerik Radcontrols development tools bought for "certainly paid for themselves one year on."

Telerik continues to expand: This year it bought NimblePros, a developer of custom software solutions, its third U.S. acquisition since 2010.

Telerik refused to disclose financial details of the deals but Mr. Georgiev said they were all financed from the company's own funds. "We didn't need to raise any capital," he said.

Mr. Georgiev said that finding the right people was the key to the company's successful expansion.

In Bulgaria, where demand for qualified IT specialists is now outstripping the available supply, Telerik promotes itself as the only company in the country that offers free training courses.

In 2009, it set up an academy for software engineers. So far 510 have enrolled — though not all stay the course — and the annual intake is rising. This year about 1,000 started the program, of whom Telerik plans to hire about 150.

"You cannot find hundreds of great developers per year, neither in Bulgaria nor in the U.S.," said Svetlin Nakov, Telerik's technical training manager. "That's why we find people with potential to become outstanding developers and we train them."

In the long term, Telerik plans to set up its own technical university with an enrollment of up to 30,000 students.

"My dream is to increase the scale, extend the scope and make Bulgaria the Silicon Valley in Europe," said Svetlin Nakov, Telerik's manager for technical training.

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