I knew that Tuan’s wife graduated in Orléans and Tuan himself spent there some years. Yesterday Monica and Tuan have realized they have a common friend in Orléans. Tonight we dined with Tuan and his wife… Bingo! They discovered that the 3 of them attended the same party in Orléans 5 years ago!

One from Brasov, the other two from Hanoi. And when I think I had to go to the other side of the planet to meet this guy!

I promise I will reveal some other surprises on this guy! One true revelation we have had during a podcast made on Highway 4 in Hanoi (where you can eat fantastic roasted grasshoppers with ginger).

Monica vs. the grasshopper. Who’s going to win?

These 3 know each other for 5 years. Even before Monica joined the Pentalog team.

Monica and I, we discover the Vietnamese transportation.

Welcome Tri! I felt really great on Saturday when Tri confirmed his decision to join Pentalog. Therefore, this young man will move for several months in Romania to join one of our important Java teams. On our automated testing, Tri has had one of the best test scores for a beginner. Tri speaks perfectly French and English. Our rate of French speakers has now reached 100%!

But above all, I like the fact that Tri comes from Saigon, already foreshadowing Pentalog Vietnam based on a mature and balanced relation between the Nord and the South. The fact that our second collaborator comes from the South will facilitate our establishment/presence in Saigon, this 9 Million-inhabitant megalopolis. I love this city. We will also open an office there as soon as possible. I would like to thank Duc, Zhui, Quang, Maxime, Hanh Nhi and the Brazilliers for their hospitality. In fact, the more I think of it, I can only agree with Monica on the excellent Saigon cuisine, which is amazing!

You could read on this blog many news Fred wrote lately about Pentalog’s current development plans. There’s a lot of things currently happening on the international level. Plans with Asia, Ukraine, Germany…

Pentalog’s business model made the company one of the most innovative, solid and fast-growing-ones of its sector in Europe. Always one length ahead of its competitors, the group managed to make its offer evolve quickly in order to meet market evolution and seize new business opportunities, as well as to assert its position in the cities and countries where its offices have been set up. I think we can say without blushing that we have achieved a “global”
position in terms of service range, and we are now on the way to become a global provider from a geographical point of view also.

To sustain our expansion and growth objectives we expect to achieve in the short- and mid-term, we need to set up strong partnerships with IT companies accross countries where Pentalog has already started developing business relationships (Germany, Austria, Belgium) but also in new areas where we feel the Pentalog model may be successful. We think of countries like Sweden, the UK, the Netherlands, the USA, hosting top-edge mid- and big sized companies in the IT service sector. Those companies could find in Pentalog the ideal leverage to develop their offer and market shares in offshore IT outsourcing. The current financial and economical context is likely to lead more companies to turn to offshore to remain competitive. This should generate all the more new opportunities for outsourcing vendors.

In 2007 we already set up an R&D department through our joint-venture alliance with a French company that enabled us to improve our expertise in embedded systems, and now representing an important service range in the group’s activities (18% of the group’s turnover). In 2008 we created a commercial branch in Germany and gained 10 new clients since then, within 6 months. We are now about to create a new development centre in another country. We really have gained substancial experience in company creation projects in foreign countries, managing cross-cultural relationships with our partners and learning a lot out of it. We are definitely ready to apply our model on a much larger geographical scale now, involving new languages, new technical skills, new time zones, new climates…

I feel the coming months are really going to be an exciting period for all Pentalog team members involved in the implementation of the company’s international growth strategy. I am delighted at the thought of the Europe map on our corporate flyer turning into a world map with plenty of new dots standing for all Pentalog locations!

So if you think you are one of these potential partners we are looking for, please contact us

In the past few months Pentalog invoiced 3 continents:
- Europe represents the majority with France, Germany (Munich, Hamburg, Hanover and Frankfurt), followed by Switzerland, Belgium, Austria, Moldova and Ukraine! Each of these European operations bring from a few ten thousand Euros up to one million Euros per year.
- The US only represent a small part of our sales since we have just one single client (but it is a permanent-one).
- Asia: Pentalog gained 2 clients from Hong Kong in 2008.

The group’s independency, which has always been an edge (the biggest client in 2007 accounted for 8% our sales figure), continues to improve since the geographical origin of our clients has strongly diversified these last months.

60% of the group’s growth is generated by international business.

We have achieved these results thanks to a true international expansion policy. We created an export manager position 3 years ago, then the German subsidiary and more recently the Ukrainian one.

In addition, our clients and prospects have access to our online catalog with 132 types of services offered, perfectly identifiable, with a unitary price, in dollar or euro zone, and they also have access to the CVs of our 250 engineers and technicians. This catalog, as well as all of our websites, is available in French, English, and German and will soon also be available in Romanian.

Thanks to Pentalog.com and to our international results, our group asserts itself as the “Amazon” of European IT services.

Thanks to its Pentalog Technology branch (R&D outsourcing activities) the Pentalog Group just won the biggest outsourced R&D contract of its history. For the next few years, this project will involve at least 30 persons (maybe even up to 50), on top-edge embedded technologies. This will be the biggest mobile phone software development team in outsourcing mode in Romania. Our office in Sibiu I was telling you about a few weeks ago (see the pictures) will be fully occupied by the end of this year. We will relocate in a more commodious building during the first quarter of 2009. I thank my colleagues for their patience since I was very busy and not really available these days. Monica, Manu and I have been on the go for 4 uninterrupted weeks. I thank them for their commitment. We are now about to start production for this prestigious client. This exciting contract should lead Pentalog to cross the 300 employee threshold by the end of 2008.

Pentalog’s German subsidiary was officially created a couple of weeks ago in Frankfurt. This branch will be a gateway dedicated to the development of the Pentalog group’s offshore nearshore business in the German-speaking area. And I think this is a very important step in our minds.

Entering the German market was not an easy thing, especially for a company with a French background, working mostly with French customers, even if are used to deal with interculturalism and multilinguism through our offices and activities in Eastern Europe. We had to work hard on the company’s international maketing, communication and sales capacities. It seems to me that we have now reached an encouraging level of international presence. I will not say a satisfaying-one because we are aware that we have to follow along the path we have paved to achieve even better results in the near future.

But for now a new contract has just been signed with an innovative company from the chromatography sector. Two young developers based in Romania just spent a few weeks on the company’s Munich premises with very posititive feedback from the customer. Another dynamic German company from the CRM sector just started working with the Pentalog Group. The team is likely to reach a level of 6 persons by the end of the year.

In addition already existing contracts were extended in Germany and Austria and those represent a sales figure amounting EUR 150.000. This is a good start for this newly created Pentalog office, isn’t it?

I wanted a long time ago to write about this, but I continuously postpone it; little because of lack of courage in front of such a hot subject as unpopular.

And then suddenly last week, travelling through Tunis, Laurence Parisot, the President of the Movement of French Enterprises (the largest union of employers in France), gave me the free pitch, declaring that externalization creates opportunities for the West. Even better, she called (I took it for myself) to better explain the value added chain… I could not stand back anymore. Thanks Laurence!

In my field, I could say that globally, even in France, the concept of globalization is tolerated, even recognized, but from here until to consider it honourable, we won’t have to go too far.
Still, I see at least two series of reasons for which France would have to think about the unappeasable depression: industrial and fiscal.

- Industrial reasons: France lacks engineers as well as qualified workers nowadays. Who saw an unemployed engineer? Who saw a R&D developer or a software developer unemployed? I have to be very clear about this subject. France, as well as Germany, has a deficit of labour force which suppresses the creative and the productive capacities of our companies. Are you aware of the fact that France could arrive to the state of not being able of delivering the nuclear power stations it sells so easily, due to the lack of engineers?
The capacities which the French firms mobilize abroad come to be inserted into a French process of creation of value. In other words, jobs produced abroad, as part of a global production process, will benefit of the added value chain and will there be sold for better prices which will allow firms to pay better their employees, to remunerate French stockholders, but also to pay higher taxes as if they would have had produced more expensively but local. (yeah..)
To this we add the fact that none of my clients, and I have some experience as an offshorer (you can take a look at this list of success stories, but not all of them are offshore treated), discharged any of his employees after having entrusted us an externalization contract. Even better, this allowed them to lighten their software production. In return, this liberates the experience acquired by the previous generation of developers, in terms of creativity, comprehension, project planning, architecture, so liberates it from finally avoidable tasks of production and management. I don’t even speak about testing… services economically incompatible with the Western Europe production costs, since we speak about competitors with products established in the Extreme Orient. It’s a matter of value creation capacity, through innovation, which will grow by matter of activity transfer… which will allow to developing economies to know the benefits of our great occidental world.
A last question, as a conclusion: what country predominantly supplies the Indian production of software? You found it, isn’t it? Is this country threatened in its capacity of software innovation? Are these firms on the point of disappearing? In parallel, this year, France has just lost one of its rare representatives at the end of the food chain of software package: Business Objects, in the deepest silence. At this level, it comes to mind, only Dassault Systems.

- The fiscal level now: the explication is shorter, because it derives from the whole industrial level. France and its lack of labour force, but also the lack of competitiveness of its systems, is in need, from the fiscal point of view, of revenues that French companies will generate abroad. For France, these companies externalizing their production enlarge the fiscal cake. It’s the ground 0 of being an economist.

I don’t have to go far to search for an example. Pentalog France generates, by its production capacities, a profit of 2%… not because we try to reduce it, but because France has the highest social costs from all over Europe with the smallest price level of consulting (and I speak now from experience, because I know really well the functioning of European consulting markets).

For 2007, we will declare in France, thanks to Romanian and Moldavian production, a turnover 5 times higher than the one generated by the French team and a 7 times higher profit and taxes.

Is it okay like this, Laurence?