Tuesday, August 12, 2008

Career Choices - IB vs CEP Vendor

Which would you rather do? Work for a big Wall Street Investment bank, be guaranteed a good salary and (in good times), a decent bonus that might make you the envy of your neighborhood (unless you live in Short Hills, NJ or Greenwich, Ct), or work for a small, technically-savvy software company where you can be directly responsible for the bottom line?

This choice was recently faced by a colleague (let's call him T) at the big IB that I work for.

T is one of the top performance architects on Wall Street, and has personally been instrumental at improving the performance of several of our key systems. For various reasons, T felt that he wanted to explore some other opportunities, and within a few weeks, he had a few job and consulting offers. The fact that he could be so successful in his job search in this kind of market speaks volumes about his talent.

The position that T was going to accept was as a W-2 consultant with another large investment bank whose troubles have been in the news lately. T had never consulted before, so he had asked me a lot of questions about what it was like to be a consultant. Between the fact that T was new to consulting, only had a one-year contract, and was involved with an Investment Bank whose management was said to be a bit befuldled, I preferred to see T end up in another place. If this Investment Bank were to lay off additional consulting staff in the future, T would probably be one of the first ones to go. The Investment bank would have probably given T a small chunk of money to buy off the rest of the contract, and then T would have found himself back out on the street.

Coincidentally, a week before T was to resign from my firm, the CEO of one of the Complex Event Processing vendors contacted me to ask me if I knew anyone who would be available for a new position that his company had opened. Immediately, I thought of T. He was on his way out the door anyway, so I felt OK about referring him to the CEP vendor. Within two days, T had a third offer, and after another day, T inked the deal with the CEP vendor!

I spent quite a bit of time with T to help him through his array of choices. Almost every decision point favored joining the CEP vendor. The CEP vendor is certainly not a start-up, as they have been around for a few years and have about 60 people working for them, but it certainly has the feel of a start-up (sans the foozball table and loft in Silicon Alley).

The things that favored the IB were:

- The ability to interact with a large number of people and make a lot of new connections immediately. In consulting, your network is everything.
- The ability to work on a wide variety of trading systems, and to improve his domain knowledge.
- A great hourly rate

The negatives about consulting for an IB were:

- This particular IB has been particularly caught up in the credit crisis, and has recently dismissed a good number of employees, as well as a lot of contractors
- Being subjected to IB politics and processes
- The costs associated with being a consultant, which include paying 14% for Social Security (even though he was a W-2 of the consulting firm, they required him to pay the entire SS tax!)

The things that favored the CEP vendor were:

- Work in a start-up-type atmosphere where there should be very little politics and processes that get in the way of your productivity
- Work in a company of extremely smart rocket scientists that is very close to T's home
- In a pre-sales role, be able to directly affect the bottom line of the company and drive the future success of the company
- Have an opportunity to travel (well, some might look on that as a negative)
- Be able to meet a lot of different technologists from a lot of different kinds of companies. Since CEP appeals to hedge funds, there is an opportunity to gain some domain knowledge into hedge fund operations.
- If T is able to secure any kind of equity position in the company, then there is an opportunity to cash-in if the company gets purchased.
- Have direct interaction with the senior management of the company.
- Been involved in a technology that is visible in the Garter Hype Cycle
- The opportunity to be a jack-of-all-trades ... sales, technology, performance analysis, consulting

The things that were negatives about joining the CEP vendor were:

- Sales of infrastructure products are very difficult right now
- Deal with the very long delays in the procurement process that are endemic to every Investment Bank
- The travel schedule of a sales engineer might be very onerous, especially if you have a family
- Doing booth duty at trade shows

Did T choose wisely? I would be interested to hear your thoughts.

©2008 Marc Adler - All Rights Reserved.
All opinions here are personal, and have no relation to my employer.


Anonymous said...

It's an interesting dilemma. I faced a similar decision (from the opposite direction) earlier this year.

I work in software presales for financial markets accounts in London for a large vendor, who have various CEP technology offerings in addition to every other conceivable type of middleware. I was offered a presales role at a CEP pure-play.

In the end I turned it down for three reasons:

* Current climate - I suspect the pureplays will be hit hard by the downturn... there will be a flight to safety (regardless of technical merit)

* The exposure one gets to the different areas of a bank is greater at a vendor with a wider product range... a single product pure-play gives the opportunity to specialise but you'll be missing out on exposure to 99% of what happens in a large financial firm

* Not every technology that Gartner tracks ends up being big. I think CEP is cool and solves some real problems... but are they necessarily the biggest problems an organisation has at any given time? Perhaps... but possibly not as often as one might think.

However, the decision process is somewhat different if you're already working at a bank and looking outside.... not something I can comment on directly.

The advice I'd give your colleague would be to maintain his contacts in the business and remember that it is his technical and industry knowledge that makes him valuable. You have to make a conscious effort to maintain these things when working in presales... there are *lots* of demands on your time.

... posting anonymously as it's probably trivial to figure out who I work for from this...

Anonymous said...

Very interesting post. As a recruiter I work through these types of problems with candidates quite a bit. I've been successful in placing candidates from large IB's with a few CEP plays. I have always done a lot of business on the vendor side and found it very hard to get people to jump from IB to vendor. Not seeing that right now. Is the technology that great , and candidates believe in it? or are people over the Big Bank
politics and bureaucracy? I had one candidate that I placed tell me "its like a breath of fresh air over here".
It would be interesting to hear what others think.

Anonymous said...

Can I suggest a third option? I know this may be off-topic from CEP, but in general developers can get the best of both worlds: join a place where 1) you can still make use of your domain expertise in the finance industry while 2) enjoying the small politics-free atmosphere of a start-up-like firm. Come to the dark side, and join a hedge fund. Just make sure you pick one that is not in the red.

Anonymous said...

How is "T" getting on, one month later? I have a situation where I work in a bank (as a consultant) but may be offered a similar position to "T" at a CEP vendor. I am not particularly inclined to make the move, although I recognise that it has some benefits.

marc said...

I will see T in about a month, and will find out how he likes it. However, I did speak to his new bosses, and they are very impressed with T.

Good luck on your decision!