Small software firms join Goliaths in Tartan collaboration

0 Comments | Sunday Herald, The, Aug 10, 2003 | by Valerie Darroch

SCOTTISH Enterprise has given its backing to "Tartan Stac", an innovative concept developed by Sun Microsystems to spawn greater collaboration between multinationals and small Scottish software companies.

The project will launch this autumn if a current test phase proves successful.

The Tartan Stac (Scottish Technology Collaboration) concept was devised by Gordon Cameron, the US software and hardware giant's regional sales manager for Scotland, as a means of helping innovative, small software companies work with multinationals to arrive at best-of-breed technical solutions and of showcasing Scottish IT talent on a global stage.

Since Sun exclusively unveiled the idea in the Sunday Herald at the beginning of the year, Oracle, IBM and BT have pledged their support and have been inundated with approaches from small firms.

Cameron said that Sun and Oracle are working with a test team of five small technology companies and with law firm Masons on drafting a legal framework. He added that the aim is to address the issue of large companies' reluctance to buy mission-critical software from small companies.

Potential solutions under consideration include the idea of a type of insurance scheme: "We want to conquer that fear of dealing with small companies," he said.

Scottish Enterprise chief executive Robert Crawford believes Stac offers ways for indigenous IT companies to get onto the radar of multi-nationals.

This is currently a problem as 90% of Scotland's software and e- business firms employ less than 50 people.

Crawford hopes Stac, which will have a web-based infrastructure, can engender the same kind of collaboration in Scotland as happened in Silicon Valley. Stac members will focus on creating solutions for the energy, e-learning and biotechnology sectors.

Crawford defined Stac's potential benefits as bringing value to the Scottish economy, opening routes to global markets for Scottish companies and helping Scotland to be recognised for innovation and excellence.

He said: "I am convinced the Stac concept will prove to be a winner and may yet prove to have a pivotal role in the growth of Scotland's indigenous ICT industry."

Bob Downes, director of BT Scotland, was also a supporter. "It's a practical way of small companies working together and of using routes into the market which large companies in Scotland offer," he said.

For BT, it also dovetails with its efforts to source "smart content" from innovative players in communication, media and IT.

Scotland's small business and technology start-up community is set to receive another boost next month when the European Commission is expected to grant Scottish Enterprise's application for additional funding to boost its (pounds) 40 million Co-Investment Fund (SCF).

The SCF is a (pounds) 20m equity investment fund set up by SE to invest from (pounds) 10,000 to (pounds) 500,000 in company finance deals of between (pounds) 20,000 and (pounds) 1m. This public money is matched by private sector investors, including venture capital funds, business angels and angel syndicates.

The new European finance, worth (pounds) 25m, will be classed as Objective 2 funds designed for those operating in industrial, urban and rural areas in need of assistance. The funds will be matched by (pounds) 25m from SE.

With a potential total of (pounds) 90m available, the Co- Investment Fund (which has already made eight investments in companies) should become a vital source of funding for a variety of Scottish businesses.

A spokesman for SE said: "Negotiations are ongoing and we are expecting an announcement in the near future."