A Virtual Computer (Extract)

Billed as the first Israeli-Palestinian start-up, G.ho.st hopes to make the personal desktop obsolete and Microsoft Windows superfluous

09ghost224 (photo credit: G.ho.st)
(photo credit: G.ho.st)
Extract from an article in Issue 9, August 18, 2008 of The Jerusalem Report. To subscribe to The Jerusalem Report click here. Zvi Schreiber remembers the moment that "the penny dropped," as he puts it. "Two years ago, my daughter Keren asked me to send a file from her computer at home to her e-mail address, so she could read it on a school computer," he relates. It seems like a fairly mundane request. But for Schreiber, a serial entrepreneur who has founded high-tech companies that have been sold for millions of dollars, it was the spark for his latest venture. Why, he asked himself, shouldn't Keren access her documents on any computer via the web as easily as she gets her e-mail? "People are used to placing their e-mails, photographs and videos on websites, available for access any time from any computer," he explains. Follow that logic through, he continues, and why not place your entire computer on the web instead of being tied down to one particular desktop or lugging around a laptop? Two years on, that simple question has resulted in G.ho.st (an acronym of Global Hosted Operating System, available on the web at http://g.ho.st), which provides a free and complete virtual computer to users - a personal desktop entirely on the web, available through any web browser, unshackled from a specific hard drive. The company envisions a future in which computers won't have any physically installed software; the computer will consist solely of a monitor and keyboard, with all the software and data stored on the Internet. With 46 employees, $3.5 million already invested in G.ho.st and a major roll-out planned for the end of the year (after the postponement of the original plan for a "G.ho.stly" Halloween unveiling), it might seem as if the company is yet another highly promising Israeli start-up in a country chock-a-block with them. But G.ho.st has a distinction that the others don't: It is the first full-fledged Israeli-Palestinian high-tech multinational start-up. Its slogan, "going through walls," refers to the idea of a virtual computer not tied to a particular location, but also to breaking through physical and mental walls that separate Israelis and Palestinians. The company has offices in Ramallah, where 40 Palestinians work, and in Modi'in, where six Israelis are employed. And Schreiber has donated 25 percent of his founder shares in the company to a non-profit G.ho.st Peace Foundation, with the goal of promoting "peace in the Middle East through grass-roots social and commercial collaboration between the individuals on both sides" - a combination of business profit-seeking and Middle East peace efforts rolled into one. Schreiber, a tall and urbane man who speaks English in fully formed and grammatically impeccable sentences, is not the typical Israeli wiz kid who trained in a top-secret military technology unit before breaking onto the high-tech scene. He is instead a graduate of the University of Cambridge. Born in London in 1969, Schreiber lived in Israel with his family for several years as a child before returning to the United Kingdom. He earned a bachelor's degree in mathematics at Cambridge and continued from there to an MSc in physics (composing a thesis exploring theories of parallel universes) and a PhD in theoretical computer science from Imperial College, London. After briefly considering pursuing a career as an academic physicist, Schreiber instead chose to work in the computer software industry - and quickly proved to be a high-flier. Starting out as a software engineer in British companies, he returned to Israel in the mid-90s, creating a successful software market research and consulting company called Isratec. Noting the immense potential of the Internet, Schreiber seized his first big opportunity. After gathering a group of mathematicians around him in late 1998 to create algorithms for an entirely Internet-based marketplace for trade in raw materials and parts, several months before the term business-to-business e-commerce was even coined, he raised $3 million for the creation of a start-up called Tradeum. With Internet ventures all the rage, Tradeum, which had closed only one major deal with a client, was sold in March 2000, only 18 months after its creation. American corporation VerticalNet bought the company in a stock-swap acquisition valued at $508 million - at the time, the third largest purchase in Israeli high-tech history. Tradeum moved into a gleaming Jerusalem office and swelled from 30 to 100 employees. The jubilation, however, was shortlived. VerticalNet was burning through more money than it was earning, and the cratering of the dot.com bubble on Wall Street in mid-2000 cut VerticalNet's stock values more than 60 percent within months. Some Tradeum employees who had regarded themselves as millionaires given their share-option values on the date of the company's purchase rudely discovered that they owed more money in taxes than they held in total assets in the post-crash period. Caught in a downward spiral, VerticalNet began laying off employees and eventually shut down the company's entire presence in Israel in October 2001. Schreiber by then had moved on to another company he built from scratch, Unicorn Solutions, which created technologies for unifying enterprise data stored in disparate databases and formats. After several years at the helm of Unicorn, he negotiated a deal in April 2006 selling Unicorn to IBM under terms that have not been disclosed. The Unicorn team formed the nucleus of an IBM data research and development office in Jerusalem, and Schreiber, ever restless, immediately began drawing up the initial plans for what was to become G.ho.st. He then, however, found him-self stymied by the agreement he had just signed with IBM, prohibiting him from even talking about alternative job opportunities to ex-Unicorn, now-IBM employees, for three years. "All the talented people I knew were off limits to me," he relates. That's when the idea of working with Palestinians came to him. "I had always wanted to do something for the sake of increasing stability and peace," says Schreiber, "and when I realized I could do that by creating a business venture with Palestinians, another penny dropped for me." His initial efforts to identify Palestinian partners might seem naïve. "I was entering terms such as 'Palestinian software businessmen' into Google searches," admits Schreiber. The web search did, however, lead him to important first contacts. A request for assistance by the Peres Peace Center produced a recommendation that he speak to Tareq Maayah, who had in the past run the Siemens research center in the West Bank, and Maayah began the process of recruiting the first core G.ho.st team in Ramallah (Maayah maintains an important position on G.ho.st's board of directors but is no longer involved in day-to-day operations). The Ramallah office is now headed by Khaled Ayyash, who is a partner in decision-making at the company. "When I joined in April 2007, there were only 12 employees," recalls Rami Abdul Hadi, 32, director of marketing for G.ho.st. "And in Palestinian terms, that is already a medium-sized company. G.ho.st is an entirely new type of phenomenon in Ramallah." Abdul Hadi, who has degrees in business administration from Bethlehem University, and marketing and international cooperation, from the University of Granada, Spain, previously worked in Spain, where he was involved in developing business opportunities between the Arab League and the European Union. No Israeli company had ever undertaken a joint high-tech venture in the Palestinian Authority - even the brief period of sub-contracting of Palestinian engineers by Israeli firms in the late 1990s came to an abrupt end with the flare-up of conflict in 2000. As might be expected, the very idea of a joint Israeli-Palestinian start-up raised eyebrows. "It is always an issue," admits Abdul Hadi, "but we never hide it, and all potential employees know about it from the first moment. When they see the office and the good relations we have with our Israeli colleagues, and hear the details of employee salaries and benefits, any questions about this matter usually disappear. We have never had anyone who declined to work for us because of the Israeli connection. On the contrary, at this point we receive hundreds of CVs, much more than we can handle, from people who want to work at G.ho.st." G.ho.st has brought to Ramallah a Silicon Valley culture that was previously unknown in the Palestinian Authority. Employee share option plans have been standard fare for a long time in technology firms from California to Tel Aviv, but the employee shares offered by G.ho.st were an entirely new concept for Palestinians. "Whenever I hear negative comments [from outside the company] about the fact that we are working with Israelis, I point to the many benefits we are getting," Abdul Hadi tells The Report. "We have created dozens of jobs, and we are learning how to develop first-class world technology addressing international markets - this is a net benefit to Palestine. We can prove peaceful co-existence is possible in business, where politics have failed." Hiring Palestinian software engineers is certainly cost-effective relative to hiring Israelis - salaries for Palestinian programmers are about a third of what they are in Israel, whereas Israeli high-tech salaries in recent years have equalled or surpassed comparable American salaries - and G.ho.st's staff is composed of 40 employees in Ramallah and only 6 in Modi'in. Most of the Ramallah employees are in their early to mid-twenties, hired straight out of college with little professional experience. "We have graduates from Bir Zeit University, A-Najah, Al-Quds, Abu Dis and even Jordanian universities," says Abdul Hadi. G.ho.st invests heavily in on-the-job training of the new hires to bring them up to world-class standards. The main initial hurdle encountered by the G.ho.st team was the physical separation between Israeli and Palestinian territories that is one result of the longstanding conflict. Israelis are barred from travelling to the Palestinian Authority by the IDF, and Palestinians who lack permits to enter Israel are similarly unable to cross the border. Much of Schreiber's early work as CEO of the newly-formed company was conducted by telephone and e-mail. When it was absolutely necessary for the Israeli and Palestinian G.ho.st team members to meet in person, they would gather in the one location to which they all had access - a run-down restaurant lacking air-conditioning, located along the road between Jericho and the Dead Sea. "There were some romantic aspects to that location," recalls Schreiber, "such as the desert landscape and the shepherds, goats and camels that would walk by. But you can't seriously run an entire business from there." The company now conducts most meetings via large-screen teleconferences connecting the Ramallah and Modi'in offices - "we keep the teleconference connection running all the time, to give us the feeling of working in one big office" - and several of the senior Palestinian G.ho.st executives have obtained Israeli entry permits, but the Jericho restaurant is still kept as a backup. Modi'in is only about ten miles from Ramallah, but the location of the Israeli office wasn't selected for its proximity to the Palestinian office. The presence of separation barriers and roadblocks can make that short distance into a long and frequently impossible journey. Although the company is creating technology meant to overcome physical barriers, the real-world walls it must traverse can be daunting. "In April I accompanied Zvi to a major technology conference in San Diego sponsored by the Wall Street Journal," says Abdul Hadi. "He flew there directly from Tel Aviv. Because I lacked an entry permit [to Israel], I had to travel through Jordan. This added more than 40 hours to my travel time," he laments, explaining that the roadblocks traversed on the way to Jordan and indirect flights to the U.S. accounted for the delay. Both Palestinians and Israelis on the G.ho.st staff report that the cultural differences between them are minor, and in fact there are commonalities they share that can facilitate working together. "There are hardly any cultural differences," says Abdul Hadi. "We all speak English, and as a rule we don't discuss politics, only business. Working with Israelis is culturally much easier than, say, working with Japanese or Chinese firms." Schreiber adds that "Palestinians and Israelis tend to be frank and direct when speaking, which is an advantage in a start-up." Extract from an article in Issue 9, August 18, 2008 of The Jerusalem Report. To subscribe to The Jerusalem Report click here.