1 pepper rating

Twenty years ago “offshore” for high-tech services and manufacturing meant Ireland and Scotland. Today Ireland is one of the most well-off countries in the world, no longer a low-wage default. When the Berlin Wall came down, North Atlantic tech companies flooded eastward into Europe to tap the output of the strong scientific and mathematics educational systems of the former Soviet bloc. Over the last few years, as the cost of labor in Central and Eastern Europe has risen, the low-cost work has shifted to lower-wage countries like China and India. As those countries become more entrenched in the worldwide economic system, we can see the value of their labor — and their purchasing power — rise. Higher wages are one of the drivers for the rapid growth of the Chinese economy.

Moravia Worldwide (née Moravia IT) is a case study in this trend toward globalized technology and services. It is headquartered in Brno, the second city of the Czech Republic. It has offices in the U.S., Ireland, Japan, China, and several Eastern and Central European countries. Last year it set up QA Sight, its testing business, in Nanjing. In 1992 you would find cheap labor in the Czech Republic — now the Czechs go to China for low-cost testing staff and to Japan so they can plug into local expertise “A Quick Take on Japan”. Onward marches globalization.

Both the Czech government and Japanese trade council recognized Moravia for being the first Czech — let’s say the first Central or Eastern European — company to open an office in Japan. What was once a “family business” of a Czech national and a Mexican citizen has become a global enterprise with professional management and international staff. The company is headed by CEO Kati Forstigerova, Ernst & Young Entrepreneur Of the Year for the Czech Republic in 2000. The Asian thrust is spearheaded by co-founder Arturo Quintero, a Mexican by birth, who attended university in Poland and now spends most of his time in Asia. Its sales growth is fueled by former Berlitzer Joe DiDamo, located in the Austrian-governed state of California.

Moravia is one of five Microsoft Premier Vendors. Its client roster includes marquee names like Oracle and Hewlett-Packard which once used the company only for Slavic languages, but now turn to Moravia for all language combinations. Moravia clients seem to value their level of service and are ready to pay a premium for that, further dissociating the company from its 1995 legacy of being a low-cost provider.

Moravia shows up as #15 on our list of top 20 language service providers — with the ambition to break into the top 5. Its main challenge will be to manage growth at the pace that it needs to approach the pinnacle of the market. As it aims for the big time of being a business process outsourcer, Moravia will have to become less risk-averse, buy or merge to gain scale more quickly, and hire professional management from outside the industry — as SDL did when it was growing quickly.