The Sale of Terra Soft to Fixstars
An interview by Kristen Tatti, Reporter for the Northern Colorado Business Report, with Kai Staats, founder and former CEO of Terra Soft Solutions.

Just shy of ten years from the formation of Terra Soft Solutions, I am proud to have sold my company to Fixstars of Tokyo, Japan. This experience was truly positive, well timed and well executed, a blessing in challenging times as described in the following interview with NCBR.

> Has acquisition always been a possibility for Terra Soft?
> Have you entertained previous offers?

The potential for acquisition is about being willing to sell, yes, but more importantly about someone wanting to acquire. Some companies are built to be sold, an acquisition the most common exist strategy. While I was open to the possibility of selling Terra Soft, and had entertained two conversations twice in Terra Soft’s history, it was not until working with Fixstars and Miki-san that this became a real opportunity.

> What was Terra Soft’s relationship with Fixstars prior to the acquisition?

Fixstars had for the prior two years used Yellow Dog Linux in their work with IBM, Sony, and their systems which use the Cell Broadband Engine micro-processor.

> Was selling the company a difficult decision to make? Why/why not?

Not at all. A risk, yes. But a difficult decision, no. The timing was right. The acquiring company was a good fit. But most important, I was ready to let go because I recognized that through the acquisition my team and our product line would be accelerated beyond the level otherwise afforded by our then current path.

> How will your role/responsibilities change as the COO of Fixstars?

Very similar to what I was doing as CEO, actually, but with opportunity for more focus on key customer relations and systems integration and knowledge sharing between our North American and Japanese offices.

> Are you releasing financial details of the acquisition?


> I noticed that the Fixstars Solutions subsidiary is headquartered in San
> Jose. Is that office already set up? Will you be working out of the
> Loveland office still?

While working through the due diligence of the acquisition, we were also busy establishing the new company in San Jose. There are no permanent employees in that office location yet, but that team will be built in 2009. My team remains as we were with Terra Soft, in Loveland with home offices in Montreal, Quebec and Victoria, B.C.

> What does this acquisition mean for you and the Terra Soft team
> (ie: new capabilities, focus, markets)?

With the offering of a complete ecosystem, meaning hardware, operating system, and optimized applications, we will be focused on deliver of turn-key, vertical market solutions such as medical imaging, industrial inspection, and financial modeling.

This is the best means by which we can deliver systems built upon the Cell processor, which otherwise presents a challenge to many code developers due to the rather immature, multi-core programming paradigm and associated tools.

> Do you anticipate growth (revenue and employment) at a
> faster/slower/similar pace as a part of Fixstars?

Must faster.

> What will be the biggest change for you, personally?

I am truly excited to work for someone else for the first time in thirteen years as it frees me to focus on my strengths and worry less about my weaknesses.

> What will be the biggest change for the Terra Soft team?

Greater financial stability. Being part of a larger, international organization. With the addition of Japan, we now have four, soon to be five countries represented by our employee and contractor base. This has been a hi-light for me, personally, as I see cross-cultural business interactions as a bridge to greater personal empathy and understanding.

> Looking back at the past 10 years, what was the biggest challenge Terra
> Soft faced?

The chicken-and-egg reality of trying to gain the trust of larger organizations who recognize and appreciate the value of our products, but questioned our ability to support them or their customers. We could not grow our team without larger customers, but could not gain larger customers without growing our team.

With Fixstars, we have moved from a half dozen engineers to over 80. With the largest Power architecture Linux development team in the world, this is resolved.

> What was the biggest success?

There were many. Building a company for which my employees enjoyed working. Every product launch. Travel across the world. Building personal relationships with talented, smart, kind and caring individuals that transcend the confines of business. Navigating the challenging, intricate relationships in Sony and IBM. Helping process the images from the Mars rovers. Working with Lockheed Martin, the Sony SCEI (PS3) and B2B (BCU-100) teams. And beating the odds, again and again and again when so many people said it was impossible.

> Any regrets?

None. There were many mistakes, but there is no value in regretting them. Experience comes in many forms, and positive or negative at the moment, it remains a valued experience.

> What will you miss about being a business owner? What will you be glad to be done with?

Nothing :)

> Would you consider starting another business in the future?

Already have two in motion.

> What challenges do you see in the future for Linux operating systems? What
> challenge has Linux already overcome?

Linux is like no other product on the market. It evolves rapidly, finding entropy in the midst of what may appear to be chaos, a community of like-minded, talented individuals diligently applying their ever-increasing experience to improve the quality of thousands of applications.

In recent years, those larger organizations have adopted open source paradigms, finding value in embracing the open source community as a means of delivering a higher quality product with less internal overhead.

IBM once painted the sides of New York City skyscrapers with Linux advertisements, but now it is Google that is causing radical shifts in open source product development, recently launching “Android”, a Linux operating system for PDAs and Cell phones.

Ten years ago it was exciting to see Linux adopted in any new device, but now it is so commonplace that no one thinks twice. Televisions, cell phones, real time image processing systems on-board military aircraft, land, and sea vehicles; embedded medical image processing systems (ie: CAT) and weather modeling supercomputers all run Linux.

Linux has overcome the challenge of being adopted and made common place. It’s future is truly limited, as the license enables (in the truest sense of this over-used word), only to the imagination of those who work with it and the power of the new hardware which it supports.