Today 3Pillar announced the acquisition of nearshore software developer Tiempo Development. This acquisition expands our footprint into the Southwest US and Mexico. I am ecstatic to welcome over 400 talented craftspeople to the 3Pillar team.
Observers may be tempted to assume that 3Pillar has embraced a new, nearshore strategy. After all, we acquired Costa Rican based Isthmus Software less than 4 months ago. In reality, both of these acquisitions further our long-term strategy of delivering continuous innovation services. In December of 2009 we acquired Romania-based LeverPoint and launched our shore agnostic approach. We remain committed to providing best-in-class, globally distributed, sustained product development teams. Both Tiempo and Isthmus further this reality.
The Historic Backdrop: The rise of offshore, nearshore and onshore models.
When we launched our shore agnostic approach, IT outsourcing was exploding. Organizations, faced with rapidly growing IT budgets, sought ways to reduce spend. CFOs and cost-conscious business executives looked to outsourcers in order to reduce cost. In turn, outsourcers looked to emerging talent markets for cheap labor. Offshore, then nearshore, delivery models arose.
All the while, businesses suffered. The disproportionate focus on cost management and cheap labor undermined quality, collaboration and time to market. As a result, many soured on foreign talent.
For the first two-plus years of our existence (from 2006 and into 2009), 3Pillar sold directly against this offshoring trend and into the residual pain that it caused. As an “onshore” consultancy, our standard sales pitch was quite simple. “If it costs 1/4 of the price but takes 4 times as long to complete, you’re still losing money.” The reality of offshore development soured many results-oriented business executives and our message ultimately drove 3Pillar’s initial growth. As a result, Inc. Magazine named us to the Inc. 500 as the 44th fastest growing company in the United States.
The Shift: Moving from software to digital product.
In 2006 the iPhone, the Cloud and Facebook all launched. With them, the digital economy was born (although we didn’t call it that at the time). Software became a source of competitive advantage. Software development no longer focused exclusively on driving operating efficiency. Investments began to shift from cost centers to profit centers.
In 2009, with a rich history of helping independent software vendors build their core products, 3Pillar made a bold move. We doubled down on our specialization in “product development.” Rather than betting our future on methodology and technology, we chose to deepen our specialization in digital product.
The Ramifications: From onshore, nearshore and offshore to globally distributed.
As corporate spending on technology shifted from back office IT to digital product, antiquated models began to lose their luster. A model built exclusively for cost management was quickly exposed. Speed and quality became disproportionately more important. Businesses everywhere began to prioritize collaboration, agility and process discipline. The goal shifted from saving pennies to creating dollars.
As an onshore provider we took advantage of this new reality. We also began to learn an important lesson. Unlike their back office counterparts, digital products must continually evolve. Just like with their physical counterparts (new and improved car models are released every year), a customers’ appetite is never quenched. To be relevant in the digital economy, organizations must deliver a continuous stream of feature and performance improvements to market, and, at faster speeds than ever.
As a result of this shift, forward thinking executives began to think about their product development as an ongoing operating expense vs. one time capital expense. As one CFO so bluntly said it, “David, I don’t need cheap labor, I’ve failed with that too many times before, but, I do need a sustainable innovation engine.” This comment single-handedly caused me to rethink 3Pillar’s value proposition. We set out to find a way to deliver innovation, quality, and speed to market over the entire product lifecycle.
Discovering Globally Distributed: Looking to the Open Source Model
As I began to explore alternative delivery models that would enable this value, the extreme dichotomy between the two worlds in which I spent the majority of my life struck me. By day I wrote software and led a boutique “onshore” consulting firm and sold against the idea of anything other than a co-located team. By night, I collaborated with engineers throughout the world developing software for the Apache Software foundation.
“Open source” software like that built by the Apache Software foundation is widely recognized as some of the highest quality, dependable and innovative software in the world. It has been deployed within nearly every Fortune 500 company for the past two decades. A globally distributed team of self-organizing experts powers the creation of this software. In other words, the Open Source community is agnostic to engineer location. In fact, we seemed to be oblivious to where those we were collaborating with were from. Only talent, communication, and the adherence to community standards mattered. Onshore, nearshore, and offshore labels were not even a thing. We were all #oneteam.
This globally distributed, team-based model for development became the foundation of my vision for the future of 3Pillar. The vision is now a reality and by acquiring both Isthmus and Tiempo we have doubled down on this reality.
Living the Dream: Sustained Innovation, Product Results
At 3Pillar, we continually seek to attract the best product managers, user experience designers, data scientists, and software engineers. We look in emerging and established talent markets. We hire in Europe, Asia, and the Americas. Exceptional talent can be found far and wide. We find that this diversity fuels performance and helps us deliver on the promise of continuous, sustained innovation. We excel at bringing craftspeople together into cohesive, mission-driven, and high-performing teams. These teams drive results. They deliver business outcomes.
With the acquisition of Tiempo, we are not only doubling down on our “shore agnostic” approach, we are doubling down on our commitment to ensure that our product teams possess all of the talents and capabilities necessary to build modern products. Tomorrow’s products will be smarter and more data-driven than ever and Tiempo’s investment in data engineering and science will enable us to integrate these data engineering services into our world-class product development teams.
I could not be more thrilled to welcome Tiempo to the 3Pillar family. Together we will be stronger than either one of us is on our own, enabling us to help even more clients build digital product and to realize the benefits of globally distributed teams.