Office of University Relations
SDSM& T News
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FOR IMMEDIATE RELEASE:
( July 10, 1997)
SDSM& T HAS STRONG TIES TO DAKOTA SCIENTIFIC SOFTWARE COMPANY’S GROWTH
Dakota Scientific Software, a South Dakota company based in Rapid City, attributes some of its growth and success to the assistance it received from SDSM& T’s Technical Assistance Program ( TAP). Diane and Mike Boucher, president and vice president (?) respectively of Dakota Scientific Software, started their small software company in December of 1990.
The Bouchers, who are both South Dakota Tech alumni, put $ 10,000 of their own money into starting the company and received $ 16,000 in TAP funding from the Governor’s Office of Economic Development . The funds were used to hire Tech faculty members and four students to further develop their software product featuring an optimized math library. This software was the fastest math library available for UNIX workstations from Sun Computers.
Despite having an excellent product, the first couple years were lean ones for the small start- up company. Initial marketing efforts did not produce the anticipated software sales. With the help of a grant from Stewart Bellman( sp?) of the Bush Foundation, the company produced brochures and staffed a booth at the International Conference on Industrial and Applied Mathematics Conference. After selling absolutely nothing at the ICIAM conference, the Bouchers tried advertising their software product on the Internet in 1991- 1992. That too proved unproductive.
The company’s first break came when Australia’s America Cup team approached the Bouchers about using their software as the exclusive linear algebra supplier for One Australia. After the exposure of their product during the America Cup, Fujitsu contacted them about licensing their software and sent two officials from Japan to Rapid City to visit with the Bouchers.
Having no experience in dealing with Japanese businesses, the Bouchers again turned to the TAP program and SDSM& T President Dr. Richard J. Gowen for assistance. Dr. Gowen’s knowledge of Japan, coupled with the High Plains Center’s referrals to others in the community for legal representation, was extremely helpful to the Bouchers. TAP officials also stepped in to help Dakota Scientific Software officials draw up meeting agendas and a good business plan.
“ The real value of TAP for us was not so much the actual dollars received, but the contacts and referrals within the local business community,” according to Mike Boucher. “ The problems in business are not lack of money or access to capital. If a company has a good business plan, it will have access to the capital it needs.”
As a result of the advice from other local businesses and information provided by the Governor’s Office of Economic Development, the Bouchers learned that the wrong people were coming from Fujitsu and declined to turn over their technology to them. At this point the Bouchers realized the need to either go full time or do nothing more with their company.
They decided to go full time and seek outside financing. Again, the advice and contacts
from TAP were “ very helpful.” The Bouchers learned that some of the regulatory restrictions on certain government small business programs can be modified under certain conditions, most importantly having a good business plan. With TAP’s assistance and referrals to local banking officials, Dakota Scientific Software was able to change its “ perfectly miserable” business plan into something good. With a solid business plan in place, the Bouchers then successfully pursued and obtained funding from the Graduate Education Loan Program ( GLEP), the Rapid City Economic Development Revolving Loan program, the State of South Dakota’s REDI program, and an SBA- guaranteed loan from Pioneer Bank and Trust.
Even with financing in place, immediate challenges faced the company. After spending $ 60,000 of its newly obtained funding, the Bouchers discovered that same weekend on the Internet that another company, Cray Research, had developed software that did the same work for the same computer as Dakota Scientific Software’s product. Because Cray Research had been a well known and respected company in computer circles for 15 years, this discovery was unsettling and intimidating news. After making the decision to spend $ 2000 to buy Cray Research’s software, the Bouchers found that their software was faster than Cray’s!
Dakota Scientific Software proceeded to take two accounts away from Cray Research. Sun Microsystems, which had 90% of the market and was still growing, was looking for a high performance math library and a FORTRAN compiler ( which Dakota Scientific did not have). In 1994 Sun bought the rights to license Dakota Scientific’s software and also Cray’s FORTRAN compiler. Again, TAP officials were very helpful in providing advice and putting them in touch with the right people to assist in negotiating and writing the contracts. Without the network of advice and expertise which TAP plugged them into, it would have been very easy to “ make a horrible, stupid mistake.” Because of Sun’s market dominance, TAP advisors suggested that DSS request minimum royalties to guard against their product being “ bought and put on the shelf.”
TAP’s involvement with helping DSS get started is akin to a “ high tech barn raising” by the network in the local business community. When Sun Microsystems was looking to buy a math library for its Spark Station 10, DSS was hamstrung by the fact that this equipment was way too expensive for DSS to buy while Cray Research probably had 700 of the machines sitting around. DSS again turned to TAP for help in obtaining the equipment in order to develop and test their software on it. A friend leased this equipment and let the Bouchers use it. Another exciting moment came when DSS beat Cray’s product!
After all of this, the Bouchers realized that TAP had been a chance for people to watch them work and then decide how much time they were willing to give to help DSS succeed. DSS then licensed a couple of compiler vendors operating in that UNIX market. They started hiring people and now have 13 employees, all except one being Tech alumni.
Dr. Gowen was “ a wealth of advice” and “ very helpful.” Although legally an uninterested party and not a stockholder, Gowen “ has remained very interested” in helping DSS grow and succeed. His extensive network of contacts and introductions into that network has been invaluable, according to Mike Boucher. Dr. Iyer, ( title with TAP?) offered stronger held opinions on what they should do and also have been a wealth of information.
Today DSS leases space from SDSM& T similar to many other TAP companies on other university campuses. The cooperative arrangement with SDSM& T works quite well. In addition to helping teach some classes, the Bouchers also let Tech faculty and staff use their equipment when preparing grant applications. DSS has more modern equipment and access to newer software which they have let the EE- Computer Engineering Departments use.
DSS has not been in the TAP program officially for 5 or 6 years, but it continues to benefit. TAP gets a small % of DSS’s revenues and SDSM& T continues to benefit as well.
Currently DSS is developing and improving its fast math libraries and also doing consulting/ contracting work. Vendors hire DSS to work with key suppliers, such as:
Structural Analysis vendors – Chrysler to crash cars, Boeing to crash planes on computers
Sun Microsystems – chip design; optimization of future CPUs
Los Alamos National Laboratory— 3 year research contract for computer simulation of bomb explosions. Comprehensive test ban treaty no longer allows bombs to be actually
blown up. Simulated bomb testing— the more detail, the slower it runs.
All major vendors who sell compilers for Sun now have their library. One year from now their library will be available for vendors who sell compilers for Windows 95 and NT. Most people have supercomputer backgrounds, and nobody in the PC market knows how to make them go fast, which supercomputer people take for granted.
He is initially came to Tech to fill in for faculty on supercomputers. SDSM& T is a good match for DSS. DSS supplies jobs for the area and they need the product which SDSM& T produces. It is easy to recruit Tech graduates – they all left and want to come back to the area if the jobs are available. The 12 people they recruited are “ here to stay” in South Dakota. 1. Local governments cooperative
asy to recruit qualified and talented people (* only 1 employee left voluntarily in past 2 yrs)
nfrastructure in place – Internet, Fed Ex, etc. ( only things missing is a good technical bookstore and non- Chinese food)
eople are available if willing to pay relocation expenses
ost of doing business is low – taxes, real estate, etc.
RC/ San Jose: 2/ 3 less salary but more spending power
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