ERCIM News No.24 - January 1996 - GMD

Spin-Offs from GMD - An Effective Way to Prosperity

by Günter Wagner and Gilbert Kalb

Technology transfer, marketing, and time to market are important factors for the prosperity of the European economy. Innovative ideas and their fast transfer into new products are necessary. Spin-off companies from the German National Research Center for Computer Science, GMD, show an efficient way to reach that goal.

GMD spin-offs are founded by former employees of GMD. They know GMD internal structures and the state of the art in research and development of their working areas. With the high motivation to take the chance for new and risky work spin-off companies are a valuable link between research institutes, industry, and the market. Although most GMD spin-offs were established only a few years ago, they already play a very successful role in the market and in a large sector of applied computer science. GMD provides valuable support to these companies, by providing for example access to GMD infrastructure, joint workshops and similar ventures.

The cooperation of GMD and its spin-off companies is developing very fruitfully. It combin es research and application. This is of high value, especially in new and innovative fields. In our opinion, this kind of cooperation shows a good way to reach high synergy effects.

Currently, GMD has generated 10 spin-off companies. Their activities are mainly focused on the development of software for different application areas such as telecommunication, multimedia, tools for VLSI system design, CAD for architects, and software services for the government. A symposium, where all GMD spin-offs introduced themselves by speeches and presentations of their products to local industry and politicians, was held at GMD in May 1995.

Spin off operations on the market

Activities of spin-off companies are focused mainly on regional customers. Personal contacts as well as the well known experience of GMD seem to be a big help in getting contacts and contracts.

In the region of Cologne/Bonn some of the German radio stations as well as television companies are located and form an important part of the local economy. They are looking for new ideas and simultaneously for ways to save money. GMD, as a research center for information technology, and its spin-offs are confronted with this challenge.

Based on a contract with a television company, spin-offs together with GMD have already shown their position at the leading edge in virtual reality in a very impressive way.

The longer a spin-off exists, the more it becomes independent of GMD. It makes its own steps as a successful competitor of other companies and possibly grows up to be an internationally operating company. Two of the GMD spin-offs have already been active in the international market place.

Utilization of knowledge generated at GMD

The success of spin-offs mainly depends on "filling the right niche". Whereas the main task of GMD is to create new ideas in the area of information technology and to show their value, spin-offs help to transfer those ideas into products.

However, resources of the spin-offs usually are limited and so they have to estimate the size of the project carefully. They have to be aware of fast increasing costs during the development of a new product. Sometimes a project is done by GMD together with a spin-off from the early stages of the planning. Through this kind of cooperation, knowledge transfer from one partner to the other is automatically guaranteed.

Some of GMD spin-offs are located at the GMD-TechnoPark. Here, employees of GMD and spin-offs work together on the same floor and therefore, information exchange is optimized, time to market is shortened, and the chance of success in the market is significantly increased. A good example of an ERCIM collaboration is represented by Edelweb, a spin-off, located in the area of Paris. It is supported as a spin-off by GMD and as a "société de technologie" from INRIA.

How spin-offs contribute to knowledge

Whenever two parties work together on a successful project, both sides benefit from this work. In case of GMD, there are two types of benefit: promotion of team work and profit in terms of increasing knowledge. Spin-offs often use the ideas born in the mother institute and transfer them possibly into different products. Familiar with the needs of the market, they learn how to commercialize on given ideas, how to implement knowledge in practice, and to "fill the right gap". As a feed back, GMD may explore suitable applications and build prototypes, later on realized as products of spin-offs or other companies.

Please contact:
Günter Wagner - GMD
Tel: +49 2241 14 2201
or Gilbert Kalb - GMD
Tel: +49 2241 14 2244

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