Digital Hidden Champions in Austria

by Armin Ronacher

Hidden champions are successful companies that are typically not recognized as such by the population at large as they are selling their products to other companies. They do not produce consumer products, but they create components that are necessary for those products to exist. Austria is known to have quite a few of these companies but it’s easy to miss that some of these exist in the digital space.

Hidden champions are successful companies that are typically not recognized as such by the population at large as they are selling their products to other companies. They do not produce consumer products, but they create components that are necessary for those products to exist. Austria is known to have quite a few of these companies but it’s easy to miss that some of these exist in the digital space.

Austrian readers will without doubt associate the Austrian business environment as one where the words "Zulieferer" (supplier) and "Hidden Champion" are one of the first to fall when one goes out looking for successful companies. Traditionally those words are typically used in the context of manufacturing.

Modern supply chains do not just consist of physical products, they extend to the supply of digital goods and services. There is a hidden transformation of software development which has moved towards Open Source, open protocols, open standards and other reusable components. Even proprietary operating systems like Apple's iOS or macOS are composed of hundreds of Open Source libraries that contribute to it. Open Source doesn't just mean one can look at the source code of the library but also means that different people from around the world are able to contribute to it.

Open Source programming languages with Open Source reusable libraries are now the underpinnings of many of the most popular services in the world and some of them have their origin in Austria or got significant contributions from here. For instance many iPhone applications will be using the Fastlane library for automation which was originally created in Austria before it was acquired by Google. My own Open Source libraries such as the Flask web framework are now powering parts of some of the largest websites in the world such as LinkedIn. It's not just Open Source that does well out of Austria. With PSPDFKit we have a company in Vienna which provides a PDF processing library for Dropbox and countless other high profile clients. It's very likely that on a daily basis you're using applications and services which depend on software with significant contributions from Austria.
On the other hand there are services. And some of these are also supporting a lot of our modern life without necessarily being recognized as such. We at Sentry for instance are supporting some of the most popular websites and applications. We provide a system which monitors applications for crashes and give their developers insights into what went wrong. Valued at 1B$ and entirely Open Source, we're also having a significant development presence right in the heart of Vienna. Here we're working on the core crash reporting, performance monitoring and processing components.

Austria and in particular Vienna turns out to be a good location to build such an engineering team. While it can be hard to launch a consumer facing product in Austria because of the small initial market, building a SaaS business comes with no such disadvantages. We can provide developers with a good work environment that's something a bit different than the hustle and bustle from the Silicon Valley. To build a complex system like Sentry one needs the right talent and be able to retain that talent and we have a very low attrition rate in our Vienna office to show for. We're building something highly technical with interesting challenges, modern technologies in the most livable city. That's not something to sneeze at.
While it can be a challenge to get the right talent since the market is small, we made good experiences with hiring international talent from within and outside of the European Union. Despite that, Austria also has a lot of expertise in this field. With Sentry and Dynatrace we have two large and well known companies in the wider application monitoring space with large engineering presences in Austria. And it's not just application monitoring: Bitmovin for instance was started out of Klagenfurt and is now one of the most promising companies which perform video encoding for online streaming services. Again, a company not known by many but highly successful.

This type of software development is a real chance for IT businesses in Austria and we have something to show for here and there is a lot more potential for the future.

• Read more about digitalisation in Austria.

 

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