Outsourcing: Nothing to fear but fear itself

November 29, 2004


Should we fear outsourcing or harness it? This Thursday, Lisle Technology Partners CEO Adarsh Arora steps to the podium at the Chicagoland Entrepreneurship Center to tell Chicago's emerging technology companies to capitalize on outsourcing.

"Adarsh has been a leader in elevating the discussion on the impact of outsourcing," says President David Weinstein, of the Entrepreneurship Center. "He woke many people to the realities, and helped frame the discussion for Chicago's emerging tech firms to embrace outsourcing."

Arora, 51, is no run-of-the-mill speaker. He's an accomplished entrepreneur whose network extends from Silicon Valley to Boston's Route 128 across the globe to Bangalore, India.

Arora's company plays a pivotal role building products for high tech start-ups. Lisle Tech takes modest cash fees, and assumes an equity position with clients. "We really love entrepreneurship," says Arora. "We have equity in six or seven companies." Arora expects three will do very well; one has gone bankrupt and the others are struggling.

Arora came to Chicago from New Delhi at age 19 to study computer science at Northwestern. He earned his Ph.D. in 1978, and joined Bell Labs, where he became bored and took a leave to teach at IIT.

"It's fun stuff but it just doesn't pay enough," jokes Arora, who joined Gould Research Center in Rolling Meadows. At Gould, Arora won a $1 million contract to explore graphic interface technology for the U.S. Air Force.

When Gould was sold in 1986, Arora formed his own company, Vista Technologies to complete the work. His company built software for the largest computer-aided design firms in the world.

Arora's next venture, Beritus Software Services, focused on software maintenance. He merged Vista into Beritus, and went after the Y2K opportunity. In July 1997, Montgomery Securities took him public. Arora and his colleagues started the road show seeking $8 to $10 per share, and on the day of the offering, investors paid $16 per share.

"The first trade was $27 a share," says Arora. The market cap reached $498 million.

At the same time Beritus was going public, Arora's wife took an expatriate assignment to set up an R&D center for Motorola in India. He began commuting between India and the United States, establishing a research and development center of his own for Beritus in Bangalore.

Seeing the Y2K phenomenon peaking, Arora left the company in 1998. He experimented with a $12 million angel fund in Silicon Valley before launching Lisle Tech here in 1999 with three colleagues from Gould days; Sowmitri Swamy, a Ph.D. from Brown who taught at the University of Illinois at Urbana-Champaign; David Kopac, a Ph.D. in artificial intelligence from Northwestern; and David Hurst also a Northwestern graduate.

"We're seeing a lot of businesses being formed, but people don't know how to build successful products," says Arora. They bought the Bangalore R&D center from Beritus and today they build products for emerging technology companies here and in India.

Chicago tech Pulls RSNA'04

If you work in a Chicago restaurant this week and business is good, thank Ellen Barry, CIO of the Metropolitan Pier and Exposition Authority.

Barry's technology is a key reason the Radiological Society of North America is back in town at McCormick Place. The show, called RSNA'04, runs through Friday, and is expected to draw 60,000 visitors to Chicago.

"McCormick Place is unique in the convention business in providing cutting-edge technology like our Internet2 connection," says Barry. "Internet2 is a separate connection to a separate network that allows large volumes of data to move quickly without interference. It's especially important when demonstrating remote surgical techniques like haptics which give surgeons thousands of miles away the feel of tissue or bone," according to Barry.

Ballmer at Executives' Club

Microsoft CEO Steve Ballmer comes to town Tuesday to speak at the Executives' Club of Chicago. Chicago's clearly an important venue for Microsoft and Ballmer's visit is significant. Microsoft recruits more engineers from the U. of I. Downstate than any other school. Microsoft currently employs over 300 at its Wacker Drive offices. Ballmer's topic: "Beyond information technology, using innovation to drive your CEO's agenda." Watch for Ballmer to unveil a major investment in Chicago's civic and quality-of-life infrastructure.

Michael Krauss is a Chicago-based tech writer and consultant.


 ©2004 Marion Consulting Partners