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ThoughtWorks has been sold to private equity (martinfowler.com)
319 points by phosphate 6 months ago | hide | past | web | favorite | 185 comments

Thoughtworks is unlike other IT services company I've seen. Their adoption of latest programming paradigms and open source software is not generally seen else where, because most clients like to stick with "What has been working for everyone".

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

This is true. There was a similar momentum around Scala. It's a tech first company

"have"? Quite optimistic. All that may just change with new owners.

At least back in the early 2000s when I worked there, the expectation set by Roy was that once the legal issues versus Schroder, et al [1] were settled, that Thoughtworks would someday become a public trust. It would be very surprising to learn that the company was now being sold for the profit of an individual.

[1] http://caselaw.findlaw.com/de-court-of-chancery/1138774.html

There is a mention of that in the post: "Another issue encouraging a sale has been the difficulty of creating a post-Roy ownership structure for ThoughtWorks. Roy has often talked about setting up some kind of trust to own ThoughtWorks and maintain its values into the future. But setting up such a trust implies a change of ownership, and a change of ownership involves taxes."

since when have they spoken positively about tax avoidance lol

According to the article, the issue is not that much tax avoidance as actually paying the tax. A sale would trigger a taxable event and taxes need to be paid from the cash assets. Consulting companies don't have much in cash lying around usually, so that might be an event that could threaten the companies livelihood. Now if you sell to an investor, you receive cash from which you can pay the taxes, but if you "sell" to a trust fund, you don't.

My sources say the number was 600 million.

Which sources?

That's true

How could you confirm this?

Why did he not offer the employees to buy all or part of the company.

Ex-TWer and current TW shareholder here. US securities law does not allow a company to be private over a certain number of shareholders. The owner couldn't legally offer to sell the company to all 4000-some employees, even if they all lived in the US. (They don't live in the US, which makes it much more complicated).

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.

That's an interesting question, in a services business like this there is very little value without the employees.

Consulting firms are a strange thing... they build up a reputation for being all about being the veryh best etc etc but in the end the work tends to be just ordinary development work that you get sent in to do at some big company or government department.

I guess it appeals to some but wouldn't be my choice of place to work.

That's true. But many companies buy their services anyway. And that's often because they did not made the transition to software-driven companies (the "internal IT as a cost center" problem) and have trouble or don't even want to hire people.

Having worked in the industry for years, I saw so many disfunctional companies that I felt lucky to just be "the consultant".

...or because they don't trust their own developers/architects. It's unbelievable that if a paid consultant tells you something, you tend to believe him more than your own developer[s].

I have been in a few projects where basically we were repeating the internal developers wishes to upper management, because they needed the confirmation from externals to get the buy-in from upper layers.

A lot of the times I saw that it wasn't management having a lack of trust in developers it was more believing that they needed external affirmation of what they wanted to do.

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.

The old good blame game :) Indeed!

Then you haven't seen the general incompetence. It still surprises me how most IT departments are run, and especially by whom.

But that same general incompetence pervades the consultants as well? (Or at least it has in my experience)

Then you haven't seen the general incompetence.

Do you think consulting companies are any better? You should ask the NHS.

Don't confuse outsourcing under the guise of consulting, with real consulting.

I think the distinction has merit. There are low-quality shops, which basically rent warm bodies, and then there are consultancies that actively shape future, with the client.

ThoughtWorks qualifies for the latter.

NHS pay a lot of money to companies considered to be "high end" consulting.

Well, there are two big factors why this happens:

* 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.

As someone doing this kind of work for most part of my career, if you can handle the politics of the Fortune 500 world, the pay is good, healthcare, vacations, remote work packages and actual time off with friends and family makes my time on Earth worthwhile.

Well, according to Fowler, ThoughtWorks is staffed by only the best: "high ability intellectuals" working at Roy's grand "social experiment."

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.

This is what I've found having started working at a consultancy this year.

I'm not sure it's for me.

You know as a programmer myself for the last 15 years I can see how the market has changed and everything is becoming part of the global economy which means the rates are a lot lower which means Ukraine and India are playing a bigger and bigger role I could see private Equity trying to lower costs by outsourcing.

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.

Thoughtworks isn't cheap though. They sell the idea that outsourcing your work to them is outsourcing to an elite team. They do have teams in Brazil, China, etc, that are cheaper than their US based devs. But, those teams have rates much higher to end clients than a typical outsourcing shop.

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.
The PE firm buys things in which it sees opportunity. Often-times, the opportunity is to cut: the management team's adventurist streak in markets; weak products; bloated staff.

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.

This. I work with PE firms every day and this is essentially how they operate.

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:


That's exactly what happened to Pivotal. Boutique consulting shop turned into a consulting/services behemoth by strategic investments and business flow.

> That's exactly what happened to Pivotal.

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.

Behemoth might be a little strong. I don't know how many of the employees are consulting/services vs product, but the total is 2300. They are also somewhat niche in their consulting. They won't do gigs that use stacks that compete with PCF for example, and have a very fixed model (your employees sit with them at the Pivotal shop)

I agree they've been successful.

Ford, EMC, and Microsoft are not what I meant by a typical PE firm...that's who invested in Pivotal.

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.

My point about Pivotal was not about the investor; it was about the similar investment thesis.

    the rabid cost cutting is pretty typical.
True, if the thesis is around bloat, mal-investment, adventurism, etc. If the theory is something like "tech talent roll-up in the face of an industry-wide cloud migration", then cabid cost-cutting would be disastrous (modulo all of the SG&A position eliminating)...

Very similar thing is happening with 'digital agencies' being bought by larger advertising agencies and big international consultancies, like Accenture.

Cost cutting / financial engineering / tax reductions / resource optimisation. It won't be a fun place to work in the next 3-5 years. That raise you think you'll be getting? Don't think so.

Many companies or brands have a reputation for quality built up by decades of producing a high quality product. Then the company hits hard times and the brand name or the whole company is bought by a PE firm. The firm tries to capture the purchase price and some profit by producing cheap, low quality goods under the "premium" brand name. Huge margins until people realize they have been duped. Not cool. See: Craftsman, Kodak, Polaroid, etc.

We are not an elite team...believe me.

Well I wonder who the PE team is because perhaps they see value that exists intrinsically in quality programmers that know how to design software both quickly and at a high quality level and engineer it in a way that it can be built-in iterations and refined into a maintainable system.

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.

Someone like Joel Spolsky would likely stay the hell away from the dirty game that is large-scale consultancy.

TW wastes a lot of money; there are definitely cost cutting opportunities

> They do have teams in Brazil, China, etc, that are cheaper than their US based devs.

They have an office in Bangalore, India too. Or had until a while ago - not checked recently.

They still do.

What is your opinion about the "premium" label?

I have met plenty of very skilled Thoughtworkers. However the consulting model doesn't reward doing things right. It rewards things like selling the "A team", then swapping them out as you sell the next big client. And shortcuts that enable payment milestones, etc. They have zero incentive for what code does, how maintainable it is, etc, after they leave.

TW can deliver well, but you have to manage them closely.

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?

Not really. The TW devs are mostly guaranteed to be competent without interviews. They also already know how to work together, have a shared idea of tools, methodology, lingo, etc. The "manage closely" part is around watching for people swapouts, architecture shortcuts, etc. That's managing their managers/architects vs the entire team.

From my experience in the last year-and-a-half I would say that the Consulting model is changing to one where the developer team is an outsourced arm from the business yet it's an invaluable part of the business. For example there's a company called clear measure who I believe are looking at driving the bottom line and creating a long-term relationship where growth in the client results in higher profits for the Consulting company through either raising their rates or some other agreement. I know personally as an independent contractor my Approach is to look at how I can affect driving business growth and not so much understanding what the client is asking for as a programming task

> looking at driving the bottom line and creating a long-term relationship

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.

> 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.

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.

1) High end developers get paid a lot. Even in India and Russia.

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.

> 1) High end developers get paid a lot. Even in India and Russia.

> 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.

> 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.

The Thoughtworks brand is based on being high end.

I doubt they're going to turn it into a cheap outsourcing thing.

There's lots of companies you could buy for that.

You've said correctly, the Brand is...

Interesting. A company like ThoughtWorks doesn't seem to fit the typical private equity playbook. Assuming that most of the employees, for example, are assigned to consulting gigs at customer sites...you can't just start laying people off. What would drastic cost cutting look like at ThoughtWorks?

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

The longer I'm in this bizz, the more I've come to believe that consulting services, be it Tata, Infosys, Microsoft, IBM, all the way down to boutique mom and pop shops, is the most efficient means to extract wealth from large companies. No products, just putting butts in seats. One of the richest guys local to my location sold a "network security" consultancy some years ago, for example.

It's not just IT, these body shops take their cut from just about every industry. Building, cleaning, plumbing, most industries have these parasites between the consumer and the worker these days.

The cuttings will continue to happen (there has been a lot of layoffs) on the operational team, with downsizing and cost-cutting. Fewer travels, less expensive hotels, and luxurious meals. Also, the 'social justice' projects are already halted.

> the 'social justice' projects are already halted

When did that happen? Was it done to make the company more attractive to buyers, to protect profits, or for idealistic reasons?

Operational cost. TW was hurting for money and couldn't afford it anymore.

There are some moments when I accidentally speak too soon; this was one of them. I was incorrect re: "TW was hurting for money and couldn't afford it anymore."

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.

ouuuuuuch. I'd interviewed there and had to pull out of their (lengthy) process, but this was one of their selling points that was mentioned by the recruiter and interviewers.

Carlos I'm really surprised to see you propagating fiction under your actual name. This shit straight up didn't happen, there are still social justice projects actively going on.

Howdy; I remember seeing something about them being halted indefinitely, and they seemed to be halted when I was on my way out. I don't think it's bullshit based on what I saw but I could be wrong; do you have counterclaims to prove otherwise?

They were moved into their own organizations separate from TW.

They were and then those were disbanded a few months ago, presumably in preparation for this deal.

Doesn't match what I'm seeing first hand: I know people who are working on one of those organizations and it's operating normally.

>fewer travels, less expensive hotels, and luxurious meals.

Doesn't the customer typically pay all these costs for a consultant anyway?

Eats at your margins if expenses go over holdback, or the percentage of the sale dedicated to travel.

The customer pays them. And the customer pays the markup on them. And it should generate positive net revenue unless something is done wrong, and I doubt that Thoughtworks is doing it wrong.

They do, but it reduces your profit...

> This discussion might be enlightening: https://news.ycombinator.com/item?id=12458683

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.

Well, I've heard of Martin Fowler, but not Roy Singham.

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.

Luckily, such things are not decided based upon cursory google searches.

The founder could be Jesus Christ himself, I still don't think that would justify owning the entirety of a company built by thousands.

It's justified internally by the fact that Roy does not spend that money on himself, but rather on social projects. And as an employee you are made to feel bad if you suggest that you should be accumulating some of that wealth, rather than it going to more worthy people.

If he dreamt up such a company as TW then proceeded to build it with his own resources, without any outside funding, why shouldn't he be able to capture most of the value he created by keeping the profits from the sale?

So he did all the work? Or did his 3000-odd employees do some of it?

Of course they did a big part of the work, and for that they got the compensation they negotiated, be it salary, equity or other benefits. At any point, they could have said "Hey, I don't like that this single person disproportionally benefits from the work we all do", and leave the company to do something else. (This is generally a hard statement to make, but I think for a company where such a big part of the employees are software engineers, I think it is reasonable to assume that they have a few options to shape their live into a direction they want.)

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.

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.

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.

(I am generally not a fan of capitalism in its current form, so I'm playing devil's advocate here to a large degree.)

> 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.

There really isn't such a thing as "the value people generate" beyond one-person businesses. As a simplified example, a business that sells software has two components: building software and selling software. The value of building software that isn't sold is zero. The value of selling software that isn't ever built is zero. But the business of doing both has value; the sum is greater than the pieces. So how do you allocate the surplus of cooperation? I don't think there's a fundamental theory that can explain one correct way of doing this. In real life, you allocate it by negotiation. It's not right, or wrong, it just is.

Indeed, when 'equal' partners negotiate a division of the value generated by the enterprise or 'company', that's probably about as fair as you can get. That would be called a 'co-operative' I think.

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.

By your logic Mark Zuckerberg who became a billionaire before hiting 30 certainly doesn't deserve the bulk of his riches since there is no way he could have done by himself, all the work thousands of engineers were hired to do at Facebook.

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.

Yes that is exactly my logic, and no I don't want to say there's any difference between TW and Zuckerberg - they do not deserve to own the entire company, which has been built by all it's people.

yes, that is exactly what I would say, and no, I don't see much distinction between TW, Zuck, Bezzos, Page/Brin et al.

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 am surprised that they didn't sell to Accenture or IBM like I thought they were going to. This sale was pretty much a given. (I worked there for a year.)

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.

I'm not so sure they'd cut TWU - it seems like a fairly economical way to train up new grad consultants who get charged out at high day rates when they get back home.

If you do the math, it probably works out as a pretty good investment.

I really hope they don't. I think TWU is a fantastic program that isn't really offered by other major tech consulting companies. Almost everyone I've spoken with that went enjoyed it and were all the better for going.

Yep, there's a ton of deadweight and high salaries in the sales team and management team. Expect that talk of continuing with the same management team to not be true.

Well, if you can believe it, the high salaries are still a discount compared to the numbers that they should be getting AND they are still pressured to close just as much as they would if on commission.

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...

> they are still pressured to close just as much as they would if on commission.

Then what is the value of being uncommissioned, except for virtue-signalling?


But yes, 300K is a discount lol

According to those I asked on the matter, it was to mitigate selling 'bad' work. Which didn't really go away.

There may be plenty of deadweight, but they aren't on high salaries. Pretty much all the management and sales people could get paid (a lot) more elsewhere, and they likely will go now that they aren't bound by any sense of loyalty. And the new owners will help them out the door with golden handshakes.

Everyone wins, except anyone who is foolish enough to believe that 'nothing will change'.

> Expect that talk of continuing with the same management team to not be true

Is it ever true?

Not in my experience, I've been through three takeovers now and the same pattern repeats itself, management is all replaced within a short period.

Of course, it could be different in the Thoughtworks utopia.

Any examples to corroborate your claim?

I don't have any. These are speculations.

    ... 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.

My short story with TW. Seven years ago, after several interviews, I was invited to move and work to TW office in Porto Alegre (Brazil) I asked 2,5k USD month, and they refused. It was a good salary at that time, I could live comfortably and travel to my home once a month. I was not willing to accept less.

I continue liking this company, but now I have my own small business so I haven't applied anymore.

The point of being a middleman is to keep that fat margin. Also the usual "we did not come to you country for cheap labor, we came to have access to a new talent pool" lie.

Whatever they do, dear god I hope they keep publishing the Tech Radar. That thing is so great to read.

I remember that "DSL"s kept continously increasing on their radar until their chief scientist George RR Martin Fowler finally, finally released his book on it after 7 years, and then it was gone off of the radar. No slow descent off the radar, just gone baby gone.

In his defence, "correlation is not causation", or even more aptly "predictions are difficult, especially about the future."

Or, more simply, that he is surrounded by "yes men/women" aka Fowlbots.

The funniest thing about this whole transaction is that Neville Roy Singham always talked a big game about socialism, Hugo Chavez, central planning, etc.

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.

This is so true. I worked at TW, and I believe the only thing that made it awesome was the people who worked there and the culture. Working there is a career-changing experience and definitely improves you as a developer. But, there was one thing that always stuck out to me. The 'false' reputation that Roy built of himself as a socialist. Roy was never the socialist he claims to be. As far as the 'social impact' projects are concerned, TW used to provide discounted rates for most of these projects. But, given the premium rate, I wouldn't call it social. It was just a sham to make the employees buy into this social stuff. And, a lot of people did buy into it. Except those who carefully heard Roy at the 'Away Days' and realized that he is just trying to make more money by getting the government contracts (which have big money even in India). All these social projects were a way to make money (very few 'social' projects were pro-bono). There's only one big 'social' pro-bono project I know of. I think a big reason TW contributed to OpenMRS, was to get big medical contracts from UNICEF, other charities and the governments.

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.

> There's only one big 'social' pro-bono project I know of. I think a big reason TW contributed to OpenMRS, was to get big medical contracts from UNICEF, other charities and the governments.

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.

I don't know of the guy, or his politics, or even your politics. But, I thought the outrage in your comment was interesting.

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.

(Due Disclosure: Ex Thoughtworker) Yes the leftist ideology could be laid on pretty thick at times. Yes it always had many "all animals are equal, but some are more equal" incidents, typical of organazations that harp on "socialism" etc.

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.

Your argument resonates with me, but at the same time this is a classical case of judging someone for trying, but not hard enough.

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?

This whole social, happy family thing seems to be used by many companies to basically con the workers into dedicating themselves. Other favourites are "looks good on your CV", and "latest buzzword technology".

The bottom line is, well, the bottom line; whether you actually own a meaningful stake or not. The rest is often BS.

ThoughtWorker here (since Jan 2006). Please re-read Martin's post. There have been genuine tax-related challenges toward going employee-owned. From what we've all seen about Roy, he enjoys activism, and all signs point toward him engaging in that even more. ThoughtWorks has been a privately held company since the beginning. I personally believe that it is a private business owner to decide how he chooses to apply the proceeds from selling his business (including giving post-tax money to otherS).

Te me Martin Fowler has been branding of Thoughtworks. I am surprised he was not an owner. I wonder if Martin will remain.

Pretty much the only things I know about ThoughtWorks I got from Zed Shaw's Rails rant, which put them in a sharply negative light as a body shop of mostly-useless people. Was that an accurate characterization or is there more to them?

I worked as a Rails developer at ThoughtWorks for three years, from 2008 to 2011, on three different projects, including the one they called "the largest Rails project in the world" at the time. [1] I didn't see any of the toxic behavior Zed recounts. Rather, I got to work with some of the best developers -- and smartest people -- I've ever met, and had a lot of fun while leveling up my career.

[1] https://conferences.oreilly.com/rails2009/public/schedule/de...

I wrote a blog post about it at the time. [1] Wouldn't change a word of it today.

[1] http://davidrupp.blogspot.ie/2010/01/why-should-you-want-to-...

I got fired for being a "Rails trouble maker" in late 2009.

Never saw your blog back then but if I did I would have applied.

I will be incredibly impressed with Apax if they are able keep this type of culture thriving.

Nice to hear it. Certainly other parts of Zed's rant didn't really stand up to close scrutiny, so I figured I'd ask someone who was really there.

What they really are is subjective. But, they have grown fairly large (4500 employees, 14 countries) and still maintained an image of being in a quality tier above a body shop.

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.

I worked for ThoughtWorks in Chicago for 6-ish six years (2000-2007). I started the Selenium project there in 2004. At the time, I was a Python and JavaScript developer living in a sea of Ruby, Java, and .Net fanatics.

Hi Jason!!! Still a Ruby fanatic over here although I do a lot more JavaScript these days

Hi, Obie! :-) If I hadn't discovered Python first, I probably would have been a Ruby fanatic, too. But yeah, I mostly do JavaScript now.

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 never worked with them, but their CI product seems solid, and a few of its concepts seem to have predated the more popular competition by a few years: https://www.gocd.org/

With CruiseControl, ThoughtWorks practically invented the CI tool category. https://www.martinfowler.com/articles/continuousIntegration....

bullshit. continuous integration came out of netscape, which was open sourced by mozilla in the late '90s.

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..."


Okay, I stand corrected. Sorry about that. After some googling... Are you referring to Tinderbox? https://oduinn.com/2014/06/04/farewell-to-tinderbox/

(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

Got a link for this? The original seems to be gone.

"Rails is a ghetto" returns fruitful links, fyi. It's a classic.

A few questions:

* 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?

Professional services isn't a complex business model. The likely outcome now is what it has always been:

- 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.

Do you sell and hit your numbers? Otherwise, you're not good..m

I believe that the previous owner was the founder, Roy Singham: https://en.wikipedia.org/wiki/Neville_Roy_Singham. Also of interest: https://martinfowler.com/bliki/RoysSocialExperiment.html

Quite illuminating. It also reminds me how long they've been around.

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.

According to sources, there will be no changes for employees. It was Neville Roy Singham. Not informed. Everything was sold.

Someone who puts that kind of money down to buy a company is going to want to have a say in how it's run.

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).

there will be no changes for employees

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.

Presumably the PE value prop is that they charge over the odds for their consultancy while paying their employees under market rate. If they can maintain a public image of technical excellence and social responsibility for a couple more years while the equity firm milks the profits, Apax get their multiplier. At the end of that they can sell off what's left and doubles all round.

Or am I getting cynical in my old age?

What did ThoughtWorks do with their profits before they were bought? If it was privately owned, does that mean the profits were dividended to the founder? Or were they all re-invested in the company to fund expansion?

Ex* Employee #500 here. All reinvested.

* https://paulhammant.com/2015/01/06/farewell-2014-farewell-th...

TW employee ~200 here (now ex). The vast majority of the profit was invested in expansion. You can't grow from the low hundreds of employees in year 2000 to almost 5,000 in 2017 without many tens of millions of dollars reinvested in expansion.

Either ways, profit would be become a factor in total valuation.

Probably a combination of both.

Does anyone know what Roy Singham's activism consists of?

Sadly it's a video that I cannot watch right now. I googled a little and all I found was the 2015 Freedom to Connect page: http://freedom-to-connect.net/.

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.

Wow. "I googled a little and having now knowledge I've decided this is all BS because I'm so damn smart."

Legacy of Aaron Swartz https://thedaywefightback.org/press/

I can just hear the private equity firm claiming it's "business as usual".

My experience tells me when that phrase is uttered only a short time passes before lots changes!

>>> Funds advised by Apax Partners (“Apax Funds”) have today announced a definitive agreement to acquire ThoughtWorks, Inc.

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?

Private equity manages funds, on behalf of LPs. Just the same as most VC funds. It's the same thing. Apax doesn't own the company, the fund does. Apax gets fees for the deployed capital and carry if the investment, upon exit, goes beyond a given return threshold.

Either way a sale / transfer of ownership triggers tax consequences.

Couldn't this have been done as an ESOP?

It would have to produce enough actual cash to pay the tax bill. Roy apparently owned 97%. Probably a 9 figure tax bill.

> His death would trigger a tax event that we could not pay from our own resources, forcing a fire sale.

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.

So... the estate tax is what you have a problem with?

I have a problem with it. Destroying jobs because of tax implications of a death is unacceptable.

Really? I search in google and twitter, all related posts' sources point to this page.

A public statement will be released in some hours.

Sounds like everyone knew that a sale event would happen one day - why did they not focus on building a pile of cash that could be used to pay the taxes (Martin implies a ~50% rate in his footnote).

I was always saying that if I was younger, I wish company like ThoughtWorks got me under it's wing, send me off to their Bootcamp/University, indoctrinated me into right ways of doing things.

I had to learn same things, but much harder.

I've always wondered what design methodology does ThoughtWorks apply to most business systems. Is it the same modeling of use-case driven data-based design, as used by most outsourced development companies?

Edit: grammar

Bought by Apax

How is it gonna impact the developers now?

What would it mean for the Devs, QAs etc of ThoughtWorks?

Recent CompSci grad, I went down the interview path with both TW and my current employer, ended up cutting the TW process short as I decided to accept the latters offer. This is very interesting.

So it's official.

Thanks. We've put that URL above. (The submission originally had no URL.)

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