Hans Peter Bech - 5,460 Miles from Silicon Valley: The In-depth Case Study of What Became Microsofts First Billion Dollar Acquisition Outside the USA

Hans Peter Bech

5,460 Miles from

Silicon Valley

The In-depth Case Study of What Became Microsofts First Billion Dollar Acquisition outside the USA

The story of Brdr. Damgaard Data: Erik and Preben Damgaard establish their software company in 1984, embark on a strategic partnership with IBM in 1994 (only to dissolve it 4 years later), list their company on the Copenhagen Stock Exchange in 1999, merge with Navision Software in 2000 and are eventually acquired by Microsoft in 2002.

English translation by

Sinad Quirke Kngerskov

A great book about two companies that continue to serve as role models for many entrepreneurs.

Peter Warne, Venture Capitalist

This is a true, detailed and honest story. Should be mandatory reading for any entrepreneur.

Toke Kruse, Investor & Serial Entrepreneur

An obvious case story for all business and management schools. And for practitioners.

Freddie B. Jrgensen, Management Consultant

5,460 Miles from Silicon Valley is a textbook for everyone who deals with entrepreneurship and business in general.

Ole Mller-Jensen, Regional President, Danfoss .

This book should be part of the curriculum at any business school. It provides a great insight into how a business is created and all the big and small challenges you will come across.

Hans Christian Markvardt Pedersen

If you are interested in the details of a success story with bumps on the road and at the same time getting an overview of the development in the IT-industry for the past 35 years, then this is a book for you.

Birgitte Borgen

5,460 Miles from Silicon Valley

The In-depth Case Study of What Became Microsofts First Billion Dollar Acquisition outside the USA

(Original Danish title: Fra Damgaard til Microsoft)

Copyright Hans Peter Bech

Published by:

TBK Publishing

Leerbjerg Lod 11

DK-3400 Hillerd

Denmark

www.tbkconsult.com

All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. For permission requests, write to the publisher, at publishing@tbkconsult.com.

Translator: Sinad Quirke Kngerskov

Editor: Annie Hagel

Proofing: Emma Crabtree

Layout and design: Mette Schou

Cover: Jesper Frederik Emil Hansen

Cover illustration: Extract of an advertisement from Damgaard A/S from the period 1999-2000 developed by Blue Business A/S (www.bluebusiness.com). The image of the fly in the glass is by photographer Jens Honor. (www.jenshonore.com). The text for the advertisement was: Finally: an ERP-system that will not stop your e-business plans. The fly in the glass was supposed to represent companies with outdated ERP-systems. In the context of this book the fly in the glass is a metaphor for Damgaard Datas troublesome cooperation with IBM.

ISBN: 978-87-93116-36-8

E-book version

1st edition, June 2018

To Sue, Maria and Daniel

Foreword by Preben Damgaard

I have been asked quite often, over the years, whether I would be willing to contribute to a book about the experiences my brother Erik and I had while creating and developing Damgaard Data into an international company.
A book about Damgaard Data can hardly avoid focusing on both myself and my brother Erik, which personally I dont think is all that interesting. An attitude that I am sure is shared by my brother. I worked closely with the books author, Hans Peter Bech, in Damgaard Data for many years and, therefore, I was positive and accommodating when he first told me about his project. And I have to admit, I was also sceptical. However, the more he elaborated on his thoughts, the more positive I became. Scepticism had now been replaced by curiosity. Hans Peter wanted to emphasise the technological, pioneering work so characteristic of the time he wanted to chronicle. Just as he wanted to share the stories of not just the Damgaard brothers but also the many talented, committed and witty people who helped create Damgaard Data. Colleagues and partners, many of whom are now life-long friends, and without whom Damgaard Data would never have been as successful as it was. Unlike previous inquiries about book projects, he didnt want to write a book about Preben and Erik alone. He wanted to write a book about a company. He wanted to write about Damgaard Data.
That is a story to which I am happy to contribute. Not for my own or my brothers sake, but for the many colleagues who put so much work and energy into creating something together over the years. And also because Damgaard Data was the first entrepreneurial project in which I was involved. A project that, for me, lasted almost 20 years. Since then, I have been involved in a variety of start-ups, and hopefully Hans Peters book and the story of Damgaard Data can prevent others from making the same mistakes that we did. This biography may even inspire or motivate others to start their own business.
Thus - just like previous colleagues, partners, customers, suppliers, board members and so on - I have contributed with how I remember my time in Damgaard Data; our victories, defeats, triumphs, challenges, struggles and, not least, the funny moments.
With his impressive research, extensive fact-checking and use of both written and oral sources, Hans Peter relates his story of Damgaard Data.
Some may find the book a little nerdy, but entrepreneurship appeals to a very special kind of person. For me, personally, the book has been a trip and a look down memory lane. Hans Peters biography has reminded me of many encounters, events and experiences that I still hold dear. In Damgaard Data, we not only learned how to develop, market and sell our software to customers throughout the Western world; we also learned about life, about the satisfaction that comes from creating something and the joy that emanates from achieving results with others. A joy I personally have felt privileged to have been involved in at such an early stage in my life.
I am grateful for all the work that Hans Peter has put into this book. His level of detail has enabled me to relive an amazing time. And it has reminded me of why I enjoy developing businesses and working with young entrepreneurs to this day.
Preben Damgaard
Holte, August 2017

Authors foreword

The inspiration to write a book about Damgaard Data arose after a conversation with Preben Damgaard in early 2014. In connection with preparing a series of courses held on behalf of University in Istanbul for top managers within the Turkish software industry, I wanted to use Damgaard Data as an example of how a company from a small country can achieve huge results in just a few years.
My chat with Preben took a little longer than expected as I could feel both his great desire and need to tell his story. In the weeks that followed, my thoughts continued to return to our conversation. Slowly the idea of writing Damgaard Datas biography was formed.
A biography about the company and not just a portrait of the brothers, Erik and Preben Damgaard. Though, naturally, they would come to play vital roles in the book. I contacted Preben again to see if he and Erik agreed with my idea. They did, and in April 2014 we met to discuss the terms; their involvement as primary sources and access to material that they no doubt had kept from the company. They agreed with those stipulations and the work began in earnest.

As early as the first interview it became clear that the memories of what had happened so many years previously differed greatly. Some could recall in detail events which, it later turned out, they hadnt been part of. Others gave very different accounts of episodes in which they had been instrumental. It quickly became evident that successes have many fathers and mothers, while failures are largely orphans. However, as more and more details were unearthed, the questions I posed to my sources became more and more accurate I could now relate their inconsistencies to the other sources. It was a tremendous help for the memories of most, but it didnt eliminate all the situations where there were completely different perceptions of what had passed. I havent evaluated who told the true version. Therefore, I have chosen to refer to the different perceptions in a number of cases. It is difficult for even the best of us to remember the exact times of past events and with good reason. Fortunately, I had Preben Damgaards personal notebooks to support me. Moreover, internal staff papers and documents, and newspaper and journal articles covering the entire period helped to determine what took place when. Getting the chronology in place has been instrumental in determining the quality of a large number of statements from the over 100 interviews that were carried out. Many episodes often presuppose each other.