Also it's one of the few service oriented companies which actively focus on developer relations. They have several developer/techie oriented programs in every city they have a base.
e.g In my small city, Coimbatore; which even several Indians doesn't know it exists has small Thoughtworks base which conduct monthly open event called 'Geek Night' focussing on geek stuff.
Here, the developer speaks about Clojure functional programming on how they adapted it for their web application & the dwarf who follows that talk with android customisation is actually me :D - https://www.youtube.com/watch?v=R-VUlDgJ6aA#t=02h05m08s
Goldman Sachs tried to end-run around this limitation with Facebook, but failed: https://www.theguardian.com/business/2011/jan/17/goldman-sac...
There are other restrictions: you cannot sell shares of a privately held company unless the prospective buyer makes over 250k per year or has a net worth of $1 million.
All of the above are SEC rules. There are numerous other hurdles.
I guess it appeals to some but wouldn't be my choice of place to work.
Having worked in the industry for years, I saw so many disfunctional companies that I felt lucky to just be "the consultant".
I believe this is mostly the case of cowardice of making decisions on their own and owning up to the results. If they hire consultants and they mess things up (whether they do or not) they can point a finger at someone.
Do you think consulting companies are any better? You should ask the NHS.
ThoughtWorks qualifies for the latter.
* Most big companies simply won't need that very specialized know-how for longer than the project duration. So it's better to just overpay a bit for the duration of the project and then cut off all ties to the worker.
* Finding good people to work on important projects is very difficult and entails lots of money/time effort. (Either to find people or to train them.) A consultancy or engineering services company guarantees that the people they send are qualified. They also guarantee that they will provide replacements for people who quite or get ill. They might ever provide a project manager, QA people etc. that make it all much easier for the customer.
Then you look at their careers page for tech and see exactly what you're describing: mundane dev roles that can be done very well with high quality by people who are very average developers.
I'm not sure it's for me.
I think there's a fundamental flaw in the idea that you can just pay for cheaper labor- as Steve Jobs has said before the difference in a good programmer and an outstanding programmer can be 50 to 1 or 100 to 1 you can't capture that by trying to cut your cost from $100 an hour to $20 an hour.
Software inherently is one of the most scalable business models in the world the cost of manufacturing is almost zero all of the cost is in the design they should be able to make money. The mindset of being a consulting firm has to be changed.
That's what has me curious here. A PE firm usually buys when they think they see cost cutting opportunity. That may be hard to do with TW, since they pitch and price themselves as "premium".
A PE firm usually buys when they think they see cost cutting opportunity.
Other times, they might recognize that a company needs capital to get bigger faster in order to address an expanding market. In this case, I think the thesis might be: cloud deployments and migrations are exploding; ThoughtWorks has the thought leaders; "roll up" other consulting firms into ThoughtWorks; dominate the market. A friend's consulting firm was just bought for this exact reason. Something very similar happened to Pivotal.
Consulting has notoriously low multiples and so if you couple a consulting business with a "computing/services" business you increase the multiple over night.
I expect this page to expand drastically over the years:
Disclosure: I work for Pivotal.
The original Pivotal Labs was founded in 1989. Rob Mee sold to EMC in 2012.
A little later (circa 2013), EMC and VMWare took a number of teams and assets (notably Labs, Cloud Foundry, Greenplum, Gemfire and Spring) and spun them out into a new company, which was called Pivotal.
Pivotal is basically three divisions: Labs, Cloud R&D, Data.
Pivotal Labs is the consulting wing, there is a lot of cultural and conceptual overlap with ThoughtWorks. The Labs division is the most recognisably direct descendant of the original company Rob Mee founded. Its offerings and work have broadened over time.
Cloud R&D is responsible for Cloud Foundry (including our commercial distribution PivotalCF), KuBo, Spring, Pivotal Tracker and I always forget something or someone.
Data is responsible for Greenplum and Gemfire and a number of related technologies (eg HAWQ).
It's a complicated history, because nearly every part of Pivotal has a history that predates Pivotal.
I agree they've been successful.
I meant firms like TPG, Blackstone, Silverlake, etc. I suppose they do sometimes stray from the model, but the rabid cost cutting is pretty typical.
the rabid cost cutting is pretty typical.
For example someone like Joel Spolsky could probably find a way to drive profits from the TW team and so maybe its a programmer that knows business behind the PE money.
They have an office in Bangalore, India too. Or had until a while ago - not checked recently.
TW can deliver well, but you have to manage them closely.
So closely you might as well just have hired a bunch of contractors and run the project yourself for a fraction of the price?
That's always been the case for large-scale consultancy: land a gig and keep it forever, or as long as it will last. It's the small ones who have an incentive to leave quickly, because they don't have the manpower to keep shackled to a single assignment for too long; but the big ones are body-shops, they have a virtually-infinite supply of fresh graduates to place - they will pull all the stops to keep the gig running as long possible.
Perhaps you left something out, but the argument that high quality programmers have to be expensive might be interpreted as assuming that high quality programmers only exist within high-salary countries like the USA. I assume you didn't mean it that way.
2) As a rule of thumb consulting companies charge out at 3x wages.
It usually is more expensive to outsource to the top end than it is to do it in house even in Seattle or SF.
> 2) As a rule of thumb consulting companies charge out at 3x wages.
This is backwards.
1) Consulting companies charge what they can get, which depends on what markets they've managed to penetrate, reputation, contract flow, etc as some markets are far better lubricated than others.
2) High end developers get paid a function of company budget and supply of talent, so in locations where budgets are more constrained, salaries will also be constrained. Your implication that "paid a lot" is a constant or near-constant is questionable.
There are lots of different datasets on this, no doubt none of them high enough quality, but they all indicate huge discrepancies, both on average and when stratified.
Is it possible to make a 100:20 saving as the parent comment questioned? I don't know. Perhaps not. On the other hand US average programmer salary is over 4x the average programmer salary in China, so under the right circumstances it's not as ludicrous as perhaps presented.
I guess my point is that your premise that "high-end" developer salaries are near-constant around the globe is likely only true if you constrain yourseld to developers who are employed at agencies that compete globally against companies like Thoughtworks and have employed there long enough to have established seniority (remember experience is not synonymous with quality). That's quite a tight definition of "high end" in my opinion.
High end always has to be in context. The current context is wage competition against US developers.
The open source dev working for free isn't in this market even if they are the best developer in the world.
My friends in India working for Microsoft and the ones working remote for $30/hr are in the same market.
> Consulting companies charge what they can get
3x is a rule of thumb. Charge much less than 3x and you aren't making money unless you have a much lower than average cost structure.
> On the other hand US average programmer salary is over 4x the average programmer salary in China, so under the right circumstances it's not as ludicrous as perhaps presented.
You are comparing apples and oranges.
Remember average in the US is average after a couple of decades of outsourcing.
I doubt they're going to turn it into a cheap outsourcing thing.
There's lots of companies you could buy for that.
Edit: Or maybe there are a lot of people "on the bench" or middle management is overstaffed?
This discussion might be enlightening: https://news.ycombinator.com/item?id=12458683
When did that happen? Was it done to make the company more attractive to buyers, to protect profits, or for idealistic reasons?
I didn't have all of my facts straight when I posted this and should have thought more carefully before I did so.
Apologies to anyone I might have offended by posting this. If you'd like to talk more directly about this, feel free to email me at any time. My email address is in my profile.
Doesn't the customer typically pay all these costs for a consultant anyway?
Take these comments with a grain of salt. If anyone is going through a PE buyout and is nervous about expectations, feel free to reach out to me...I work with a lot of PE firms on tech deal and know the drill.
Let's face it, the company (and probably all companies) has really been built by all it's people, not just a single founder/owner.
So who's now getting what of the $600 mil?
A cursory search on Roy turns up various phrases like "software socialist" etc, but honestly it would be hard to justify that, or claim success in the "social responsibility" part of the company's famous "3 pillars" values, if they're not even giving their own people a fair stake.
Apparently, in the end, Roy decided to act against his publicized beliefs, which just serves as a reminder, that words don't mean s#!t when it comes to business.
Of course there's nothing unusual about this, in our capitalist system (which is extremely unfair, IMHO - can you tell?), but this was supposed to be different...
The sale price pretty much represents the discrepancy between what employees (including Roy himself) should have been paid if they were getting a fair cut of the value they generated, and what they were actually paid - or at it's least a projection of that into the future.
> Oh come on, individual salaries compete against other people offering their services (and ultimately against the choice to starve by not working for the accepted rates), and has nothing to do with the value people generate.
For the special case of high-demand jobs like software engineer, I don't think this holds up. If you are out for fair compensation in a "stable" job there are plenty of startups out there that will offer you equity. The easiest way, however, to be compensated as close as possible to "the value you generate" is to freelance.
Yes, those options are not optimal and you won't end up earning 100% of the value you generate but are generally the best way we currently have to approximate it. If we now would tweak some other parameters of our overall (international) economic system, like maybe higher taxes for large corporations (or one of X other possible solutions, I'm not trying to predict the right one), we could even end up with a system where injustices like severe wealth inequalities are minimized.
> but this was supposed to be different...
Yes, it was supposed to. They tried and failed, which is something that happens. If you invest too much (not necessarily money) into something that is not proven or even likely to be viable, that's just naive.
But that's not remotely the same as a company owned by a single individual, hiring employees who 'negotiate' their salaries in competition with other people who need employment - especially considering countries with very low wages, no social security (ie get a job, whatever the pay, or starve), etc.
I know you might want to say there is a fundamental difference between a privately held TW and FB which took VC money early on, but I'm fairly confident that if Zuck thought he could build FB without taking VC money, he'd have gone that route, instead he went with dual-class shares as a reasonable compromise to retaining control of his company.
Sure in some cases people have risked money to start a business, or it's been built around a new idea or patent etc, and that should give the owners a disproportionate share of the company value/profits.
But not all of them.
The companies get built by all their people, not just owners, and the value of the company pretty much represents (albeit very indirectly) the difference between what those people have created, and what they've been paid.
I'm pretty sure that TW will cut TWU (onboarding for new starters in India) or scale it back massively, restart sales commissions, close a bunch of their intl offices, cut nearly anything that doesn't make money and build their India office super hard (body shop).
It's gonna be BAD.
If you do the math, it probably works out as a pretty good investment.
Eg if a TW salesperson HAS to sell $20MM of work within that year but only gets paid $300k/year (I doubt it's that high, but maybe), they are still underpaid because most places would at least give them a few percentage points of the margin, i.e. their entire TW salary...
Then what is the value of being uncommissioned, except for virtue-signalling?
But yes, 300K is a discount lol
Everyone wins, except anyone who is foolish enough to believe that 'nothing will change'.
Is it ever true?
Of course, it could be different in the Thoughtworks utopia.
... His death would trigger a tax event that we could not pay from our own resources, forcing a fire sale.
Despite several years of effort, we haven't found a way that would preserve the company in its current form.
This further encouraged him to sell when there is no tax bill hanging over our head.
I continue liking this company, but now I have my own small business so I haven't applied anymore.
He's all about the government redistributing wealth. But when it comes to his own wealth, instead of gifting the company to the workers who built it, he has all kinds of excuses for why it needed to be sold to a private equity company.
It doesn't surprise me one bit. What individuals won't do voluntarily themselves, they want the state to force others to do.
Neville isn't offering to give a dividend distributing the sales profit to all his workers. No no no ... he's going to use it himself for his charitable works. Much like Hugo Chavez's succesor in Venezuela, Maduro, takes all the resources of the country on the "behalf of the people" and distributes it himself. I'm sure the prestige and power associated with being the distributor is not a motivating factor at all.
Regarding the management, there is no doubt the company had a great management, but this changed for the worse somewhere around 2011-14 at least for India. The management at that time was the reason that the attrition rates for TW spiked in India (and possibly in other regions as well). Otherwise, people hardly used to ever leave TW, as it really was a great place to work at. Not anymore and that's exactly because of the management, which decided to kill the culture for profits. Regarding Roy, he is a guy who is pretty much as socialist as the "socialist" dictators we have had - socialist as long as I get to keep all the profits. TW never allotted any stock to the employees, and Roy is a guy who built a totally private company in a capitalist country. And, he thinks governments in South America are doing better. There is a good way to implement socialist policies like some of the European countries have done, and then there is all the crap that people in South America and Cuba have to put up with in the name of socialism. As long as your socialism involves a dictator and no checks, you can be sure it's going to be a hellish experience.
Strange, I ran this program (for the first two years) and there was no such intention, at least when I was working on it. It was goodwill.
Is it really all that inconsistent for a person to be a participant in something while also wanting to see it change to be more just and fair? Don't pretty much all people behave like that?
Most people that I know wouldn't voluntarily self-limit themselves unless they knew that most others around them were also planning to do the same. Not all people are meant to be brave and heroic. But, that doesn't mean that those people won't accept the change when the change comes.
OTOH, there were some very talented people I got to work with, and as long as one didn't upset any of the "social and economic justice" con games, it was a great place to work in, for devs at a certain point in their career. No idea if or how that will change under new management.
Overall TW had more good than bad parts. And that is as good as companies get.
Not trying to help eg the homeless is ok, nobody helps the homeless. Trying to help some of them but not all will yield huge public outcry. Unfair! Hypocritical! Still, it's better than not trying at all.
It's very well possible that Roy really has been trying to make the world a little bit better - much more than most consultancy CEOs to be sure. But not hard enough and so people write comments like yours.
Is this why we can't have nice things?
The bottom line is, well, the bottom line; whether you actually own a meaningful stake or not. The rest is often BS.
Never saw your blog back then but if I did I would have applied.
They are typically brought in to do marquee type projects, so you can imagine animosity from developers at their clients...they didn't get to do said project, because their boss hired it out.
It could be that their quality isn't great, but even if it is, they would still see criticism from that crowd.
Ironically, I've a got a theory (I did confirm parts of this with Martin years ago, though), that it's all Martin's fault. Before Martin was into Ruby, for a brief period of time, he was a Python fan. But by the time we wrote Patterns of Enterprise Application Architecture, he was full-on into Ruby. Then DHH came along and wanted to implement one of the first patterns listed (Active Record). DHH wanted to to step away from PHP and write his new code in whatever Martin's favorite language was. And the rest is history. But within a small window of time, DHH's project might have been called Python on Rails. So, it's all Martin's fault that you (or DHH or half of ThoughtWorks) never became a Python fanatic. :-)
i worked for a company in the mid '00s that had some thoughtworks people come in. they were spouting all sorts of nonsense about design patterns and this and that.
i asked "how come nobody in open source speaks like this?" "oh, well you know the scope and scale of the projects and the quality of the code in the open source world doesn't compare to that which is locked up inside of companies..."
(It looks like Tinderbox predates CruiseControl by 3/4 years.)
Also, the CI Wikipedia page should probably be fixed to also include info about Mozilla's CI. https://en.wikipedia.org/wiki/Continuous_integration
* What's the likely outcome for employees?
* Who was the previous owner?
* How much did it sell for?
* Are operations in specific regions likely to be shut down or sold off?
- Do you bill? Cool. You're good
- Do you sell? Cool. You're good
If you do neither of those things, you've likely been under pressure anyway, as the business model of PS companies is to minimize operations and reduce the ratio between ops and professional services on an ongoing basis.
New owners will not likely change that dynamic. Based on what is known, the new owners are buying for growth, which means you cut costs that should be cut and use the savings to fund initiatives that lead to growth, such as expanded offerings that allow you to reach new customers and grow the company faster.
He's 63, he built a company and learned what he wanted to learn, time to live on a beach and let someone else sweat the small stuff.
The second rule of buyouts is that everything will change in the second fiscal year. They won't tell you NOT to do something, they just won't give you any budget for it.
The first rule of buyouts is that the promises always come from someone who isn't in a position to back them up (like the old owner, or your boss's boss, who only have a single seat on the board between them).
Having been through multiple acquisitions of small companies by (much) larger ones... they ALWAYS say this. The person saying it might even believe it themselves.
But in a year's time that person will have moved on to the next acquisition and you will be reporting to a regular manager in the parent org who doesn't understand - and wouldn't care even if they did - why you are "special", why you should be treated differently or have more latitude or more perks or a different office than the regular staff. Then the change will happen overnight.
Or am I getting cynical in my old age?
So right now, based on the little information I have, I am considering "activism" and "tax issues" as excuses to sell to the highest bidder.
My experience tells me when that phrase is uttered only a short time passes before lots changes!
What does that mean? It's not literally Apax buying the company, but "Funds advised by Apax"... does that mean it's just the money that owns it, or child companies, or some sort of fancy tax/legal structure?
Couldn't this have been done as an ESOP?
This just screams sht tax laws. Good tax laws don't wreck their major economic contributors.
The sad thing is I knew this was an American company based on that line alone.
I had to learn same things, but much harder.