Ties That Bind - Bay Area Council Economic Institute

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Ties That Bind
operations to lower-cost mainland factories. Similarly, HP’s Hong Kong presence has slowly
diminished as the mainland PRC has opened to foreign business.
Dublin-based Achievo Corp., formed in 2002, grew out of a partnership between two presidents
of the Asian American MultiTechnology Association: Dr. Robert P. Lee, a veteran of IBM,
Symantec and Computer Sciences Corp., and CEO of Inxight Software Inc., a Xerox PARC
spinoff; and Sandy Wai-Yan Chau, a UC Berkeley graduate in chemical engineering and technology
entrepreneur who founded San Jose-based Universal Semiconductor in 1977 and whose firm
Trident USA has been active since 1984 in real estate and venture capital investment throughout
greater China and the U.S.
Achievo, an offshore global software and IT services provider, saw opportunity in China amid
the Y2K crisis and bursting of the dot-com bubble. While India had established a reputation beginning
in 1999 as the location of choice for outsourced software development as well as call
center and other outsourced back office functions, those activities were heavily concentrated in
only three cities and the number of qualified engineers was limited. By contrast, China has thousands
of small software outsourcing companies (fewer than 50 employees) dispersed throughout
the country, with better air, road and telecom connections.
Chinese software coders earn the equivalent of about $300 a month, less than a tenth of what
U.S. programmers are paid, and China has 400,000–800,000 skilled software professionals. This
potentially translates into more workers to throw at a problem at lower cost, with a shorter time
to market. Clients include IBM, HP, Sun Microsystems, Hitachi, Toshiba, DaimlerChrysler and
the China Academy of Sciences.
Of Achievo’s 1,000 employees in 12 offices worldwide, 80% are in 6 mainland China locations:
Shenzhen, Guangzhou, Dalian, Beijing, Jinan and Shanghai. The remainder are in the company’s
Germany, Japan, Taiwan and Canada offices, and its the Dublin headquarters. Achievo sees clear
advantages in remaining a Northern California company:
� The headquarters bridges European and Asian time zones.
� The management team is bicultural.
� Clients can do business under U.S. law.
Achievo has pursued a strategy balancing organic growth with acquisitions. In November 2005 it
expanded its southern China presence by acquiring Jeyo Computer Technology Ltd., a
Guangzhou software and IT services company with a focus on telecom and wireless applications,
and customers such as Guangdong Telecom, Huawei, Oracle and Microsoft. In March 2006 it
expanded into Taiwan with acquisition of software and IT outsourcing firm VisualSoft, which
brought to the table a focus on the banking services sector and mainland resources across the
Taiwan Strait in Jinan. An April 2006 acquisition of Shanghai Wintech Software Co. Ltd.
strengthened Achievo’s northern China operations and additionally takes advantage of Shanghai
Wintech’s extensive Japanese customer base.
Cisco Systems entered the Asia market in 1994, with operations throughout the region, including
Hong Kong and Beijing. As elsewhere in the world, Cisco has provided the routers and