Optimal Paths

The Register Guard (Eugene, OR), March 2, 2003 | Go to article overview

Optimal Paths


Byline: Sherri Buri McDonald The Register-Guard

PETE CACIOPPI of LogicTools Inc. and Matt Ginsberg, CEO of On Time Systems Inc., both make a living writing sophisticated computer software to help businesses or government agencies run more smoothly and save money.

Both firms have software development teams in Eugene and specialize in the fields of scheduling and optimization software. LogicTools helps major corporate customers figure out, for example, where to locate warehouses; On Time Systems helps the U.S. Air Force schedule flights to minimize fuel use.

Yet neither man settled in Eugene based on the outcome of one his optimization programs. Rather, each was drawn to the area's high quality of life - a compelling but hard-to-quantify asset. And they say they've had no problem finding other software developers who want to share that lifestyle.

"It used to be the case that programmers were 20, single and workaholics, and you couldn't get them here," Ginsberg said. Those hard-driven individuals gravitated to Silicon Valley, where if things didn't work out at one employer they could easily switch to another, he said.

"Now, programmers are in their 30s," Ginsberg said. "They have wives, kids, and all of a sudden the quality of life in Eugene is important."

Both firms are small: Chicago-based LogicTools employs about 10 developers in downtown Eugene; Eugene-based On Time Systems has 12 employees at the Riverfront Research Park near the University of Oregon. The firms say they're flourishing in Eugene and have no plans to move away.

These are the relatively high paying knowledge-based jobs that local politicians and economic development officials desperately want more of in Eugene-Springfield.

Yet, LogicTools and On Time Systems discovered Eugene on their own. They weren't lured by tax breaks or other subsidies.

"The biggest thing that Eugene does that's supportive is it is Eugene," Ginsberg said. "We're not looking for handouts. We're looking for good schools for our kids. We're looking for good neighbors.

"When I'm looking at hiring someone from far away, I can wax lyrical about how good things are here," he said.

Software development can be done virtually anywhere. Realizing that, a growing number of U.S. -based companies are hiring programmers offshore, from India to Romania, to do the work at one-fifth to one-tenth the cost in the United States, said Larry Wade, president of the Software Association of Oregon.

But scheduling/optimization software is so complicated that it appears to be in a different league.

Worldwide, several dozen firms compete in the field, said Gerald McNerney, senior analyst at AMR Research based in Boston. Players include ILOG, based in Paris and Mountain View, Calif.; Dallas, Texas-based i2; Manugistics Inc. of Rockville, Md.; and Insight Inc., which has offices in Manassas, Va., and Bend.

The math involved is so complex that it tends to be the domain of academics, McNerney said. It's no coincidence that firms specializing in this type of software tend to be in university towns or have affiliate staff at universities, he said.

The road to Eugene

LogicTools opened a Eugene office largely by happenstance. Cacioppi, who has a master's degree in computer science from the University of Chicago, was working on a Ph.D. there in 1996 when he realized he wanted to apply his knowledge, rather than study more theory. He roved the Internet for academics doing research and came across David Simchi-Levi, then a professor at Northwestern University in Evanston, Ill. Simchi-Levi now is a professor at MIT.

Cacioppi said he contacted Simchi-Levi and learned that he had just founded LogicTools.

"How's this company doing?," Cacioppi asked. The answer, he recalled: "Well, we have no clients, no office space and no money." But Cacioppi wasn't dissuaded. …

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