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UT MBAs Ride Wave of Web-based Applications
by Pam Bixby Losefsky
AUSTIN, TX. -- Back when he was in graduate school, Jim Offerdahl learned that productivity creates wealth. If that’s the case, then Pervasive Software has substantially added to the wealth of the country by helping to make software developers as productive as possible.
Pervasive is an apt name for a company that creates products few people recognize but thousands use when they deploy a software application or log onto the Web. Over the last three years, as business-to-business e-commerce has mushroomed, thousands of companies have had to create customized web applications. Pervasive is capitalizing on this trend by offering powerful technology for building web-based software applications.
Pervasive’s core products—Pervasive.SQL, a database that underpins thousands of business applications, and most recently Tango—win praise for enabling software developers to easily develop web-based applications and deploy them maintenance-free.
Pervasive’s products have backed the development of a diverse range of applications, from Minnesota-based snowmobile company Arctco to North American Van Lines to PC Build, and a broad array of manufacturing, banking, retail and healthcare applications. Developers have also used Pervasive products to produce general web-based applications at NASA and popular content sites, like Colleges.com."
The goal of our company," says Pervasive CEO Ron Harris, "is to radically simplify software development, deployment and maintenance by creating database and application servers that enable business applications to operate without the need for human intervention." This means creating products that are maintenance-free, says Harris: "Our products are designed to automatically perform the routine maintenance operations once conducted manually by IT professionals."
Applications built on Pervasive’s products are targeted at businesses that are either unable or unwilling to pay for full-time IT professionals. "The sweet spot of our market is small- to medium-sized businesses, departments within large corporations, and remote or branch offices," says Offerdahl, Pervasive’s COO and CFO. "Also, in traditional corporate IT shops, our products free up the IT professionals so they can work on higher level problems and solutions."
Just coming off a year of 60 percent growth and announcing a secondary public offering, Austin-based Pervasive is well on its way into the annals of high-tech success stories driven by the proliferation of Web technology and Web-based applications. Offerdahl says, "By creating off-the-shelf products that work with all types of applications, we can lower the cost of application ownership for everyone." Harris envisions the ultimate ‘perfect’ application operating like the telephone, "The end-user doesn’t need to know anything about how it works, it just does."
How Things Work
Harris’ quest for the perfect application, however, began with his desire to know just exactly how things work. Having spent many years as a software engineer with Texas Instruments, he realized he would need to return to school for an MBA in order to make sense of the industry’s business end. "The Option II MBA program at UT filled in a lot of blanks for me," he says. "It put into perspective a lot of the things I had seen along the way in my career."
It also fueled an entrepreneurial fire that had long been burning. "Since graduating, I’ve been at it and haven’t looked back since. It was like I got a transfusion, and there’s no way I could go back to the other way of life." In 1990 he was instrumental in the start of Florida-based Citrix Systems with Roger Roberts, then a yearning for the Texas Hill Country brought him back to Austin to establish Btrieve Technologies, which later became Pervasive Software.
Jim Offerdahl joined Harris in 1996 trailing an equally mature career behind him. With many years in financial management under his belt at PriceWaterhouse and American Hospital Supply Corporation, Offerdahl completed his MBA at UT in 1990. He also caught the entrepreneurial bug while in graduate school, becoming CFO of a venture backed medical device company that was acquired in 1993. He then switched to the software industry and joined Tivoli Systems as CFO, which went public in 1995 and was acquired by IBM in 1996. "There are a couple of classes at UT that I still fall back on," Offerdahl says. "One in marketing and one in leadership. Shelby Carter was one of my influential professors, and he’s now on our board of directors."
Building the Next Silicon Valley
Aside from creating wealth and increasing universal productivity, a goal of Pervasive’s leaders is to create ties between Austin’s exploding high-tech start-up community—now numbering anywhere from 600 to 900 companies, depending on who you ask—and the University of Texas. Many of these companies in the Austin area complain that, because of an embedded culture that favors working with a relatively few large corporate partners, UT fails to recognize the potential of mutually beneficial relationships with a large number of smaller local companies."
Our vision is to create an environment that not only replicates, but improves on, the entrepreneurial environment that Silicon Valley enjoys with Stanford," says Harris. In that environment, the concentration of science, engineering, and management brainpower at the university and entrepreneurial momentum in the community compounds to bring prosperity to the entire region. As a member of the CEO Peer Group of the Austin Software Council—whose top priority is to improve the UT connection—Harris has visited with the deans of the Colleges of Business, Engineering, and Natural Sciences, and with UT President Larry Faulkner. "The good news is, there is a willingness on all sides to overcome the obstacles," he says.
One outcome that has already sprung from the efforts of the CEO Peer Group is the annual Entrepreneurship Career Fair, which has been held in the Texas Union each of the past three winters and has grown in attendance each year. "We know we have to catch students early in their careers, so we offer options like co-opting and part-time employment so they can get a taste of the business before committing," says Harris. And, since many students would prefer to stay in Austin—which boasts a high quality of life and relatively low living costs—these firms have the added advantage of being a hometown draw.
Pervasive and other companies of similar size have also sought to become involved at the classroom level—in Silicon Valley, this is the point at which there is almost seamless interaction between Stanford and local entrepreneurs. Business professor Tim Ruefli’s Strategic Analysis for High Technology Industries course, for instance, pairs student teams with local companies to study various aspects of their businesses. Most recently, students working with Pervasive studied and reported on the Internet application development and deployment environment. In Ruefli’s High Tech Entrepreneurship course, students study the growth of Pervasive in detail.
"Involvement with high-tech ventures brings to a class a qualitatively different set of problems than are encountered with larger firms," believes Ruefli. "More has to be done with less, and the students are more likely to produce a value-added deliverable on a project with a small high-tech firm." Further, since there is not a well-developed body of theory pertaining to high tech ventures, students are less conditioned about what is important and what is not—they have to figure it out for themselves. "This aspect, I believe, teaches them to think more critically," he says.
Small high-tech firms are likely to provide valuable input on curriculum development, as well, since their interests intersect the Techno-MBA and entrepreneurship programs—key areas for the Graduate School of Business. And their fast-paced rates of growth mean that these companies operate at the crest of the high- tech wave, a valuable perspective to bring to the table as the School tries to keep its courses current and prepare its students to enter an ever-changing workplace. "Small companies may not be able to donate large sums of money to educational institutions, but they can offer vast amounts of human capital," Harris says. "The aggregate potential of those 600 to 900 companies is really incredible."
Harris believes, "Stanford and San Jose probably went through some of the same pains when that culture was established, just on a smaller scale." As more UT MBAs and engineers opt to start their own companies or join small high-tech firms in Austin, the meshing of University resources and entrepreneurial energy is sure to become, well…pervasive. "We make a living out of competing with the big guys," Offerdahl smiles, "So this challenge is nothing new."
For more information contact: Pam Losefsky, Texas Business School, 512-471-3998 or see Pervasive's website.
For information on specific programs at the McCombs School, consult our contacts page. For media information, contact the Communications Director by phone at 512-471-3314 or by email at CommunicationsDirector@mccombs.utexas.edu.
