Good news is hard to come by these days, so here’s a nugget about a business that’s found a silver lining in the economic clouds.
I grabbed breakfast this morning with Serguei Sofinski, CEO of Intermedia, a privately held software-as-a-service company that sells a browser-based version of Microsoft
Exchange e-mail that customers use for a pay-as-you-go monthly fee. Sofinski’s business isn’t immune to the economic climate – he didn’t see much growth last year, and December was rough – but he says things have been looking up in January. (Intermedia is cash flow positive, according to Sofinski, so it doesn’t have to worry about hitting up investors for funding during the downturn. )
In particular, Sofinski is seeing an uptick in business from individuals signing up with the service. He’s guessing it’s recently laid off workers who are striking out on their own and want the type of e-mail they’re used to from the office.
But that’s not the shiniest part of the silver lining. It turns out that Intermedia, which has about 200 employees, has a team of 25 engineers in St. Petersburg, Russia, who do a lot of the nitty-gritty software coding. The Russian economy and its currency, the ruble, have taken a dive lately with the steep drop in oil prices. But what’s bad for Russia isn’t so bad for tech companies.
The ruble’s troubles do a couple of things that help Intermedia. For starters, it makes those engineers less expensive, since many of Intermedia’s customers pay in dollars and the engineers get paid in cheaper rubles. More important, Sofinski said, it makes it easier to hire and retain top talent. “It’s nice to pay 10 percent less for an engineer, but that’s not my big concern,” he said. “I can get a quality engineer who gets the work done faster.”
That’s not great news for American engineers who are looking for work and have to compete with sale-priced Russian coders. But for tech companies that are pinching pennies, a ruble saved is a ruble earned.
A POSTSCRIPT: Some commenters have suggested that if companies are going to look overseas for programmers, they should do the same for management. It so happens that Sofinski, the Intermedia CEO, is Russian himself, and graduated from a school in St. Petersburg where his software team is now based. He works out of New York now, so he doesn’t qualify as outsourced labor – but he’s not your typical U.S. executive, either. (INTC) (AAPL) (CRM) (DELL) (EMC)