It also comes at a time when Ireland is keen to stress its credentials as a knowledge economy and Havok will no doubt overnight become the boilerplate example of the kind of company that can develop here.

Although hardly a household name, Havok's products have been used by a big chunk of the general public for some time now, since its physics engine is used by most of the world's top computer games publishers. Its software provides the framework around which designers can build the game, providing lifelike interaction between game characters and objects as they move around and collide.

The firm has also recently moved into the film business, providing Hollywood production companies with software which enables them to create more realistic special effects.

However, Havok is no overnight success and the story of how it became a hundred million dollar company is indicative of the challenges that Irish start-ups face.

Although the company is now growing revenues by over 50% a year and has a profit margin in the region of 40%, things looked very different five years ago, according to chief executive David O'Meara. While the company had great technology, it was struggling to make the big breakthrough.

"Havok had a very good business idea, but had run up against it financially. The founders had raised a lot of money and were starting to move on. It was really a question of whether it could be turned around and that required taking some very touch decisions, " he said.

Those decisions included asking half the company's staff to move to San Francisco without a relocation package or face losing their jobs.

While it was a touch call, shifting half the firm to the US provided a key competitive advantage.

"Between Los Angeles and Hollywood, southern California is our biggest market.

Moving there put our engineers next to customers, while our Swiss and Swedish competitors were still taking the university approach and doing long-distance support, " he explained.

The other main aspect to turning the firm around lay in creating a business model for selling its technology.

"We had to turn from being a company with a great idea to one with a model people could trust, " said O'Meara. "When I came on board in 2002 and started talking to the big developers who weren't using Havok at the time, their view was that we had an interesting product, but it needed to mature. Along with that, they weren't sure that we would be around in five years' time."

Persuading potential customers that they were there for the long haul was the key to success, since games publishers don't make one-off purchases.

"It's not worth their while.

We've built a business model that's repeat. Their teams get trained in the use of Havok and once they're finished with one game, they go on to use it with the next, " said O'Meara.

According to O'Meara, the restructuring of the firm didn't sour relations with the firm's founders, Steve Collins and Hugh Reynolds, who started Havok in 1998 in Trinity College.

"The guys had everything you'd expect of an entrepreneur but hadn't worked in business, as they came to it directly from college. It was a transition, but a very amicable one. Steve and Hugh had lost a lot of their equity in the company between various rounds and the ownership had transferred to the venture capitalists, but they never sold their own shareholdings and we still keep in touch, " he said.

Collins went back to Trinity and is now teaching a master's in entertainment technology, while Reynolds now lives in Kerry and works as a technology adviser.

As the client base has grown, so too have revenues for what O'Meara terms professional services.

"We have been involved in over 150 games released and 100 more in production, so we now have the expertise in which we help the game developer now take advantage of these technologies, " he explained.

That expertise provides clients with peace of mind and ensures projects meet deadlines . . . crucial in an industry where a missed deadline can mean tens of millions in lost revenues. The average gamer spends around 250 a year on games and publishers are under pressure to release in time for the main game buying periods, primarily the run-up to Christmas.

"A lot of people out there think our customers are buying sexy technology. They are actually buying a successful business model, which will get their game out on time.

Electronic Arts, Sony, Microsoft all have to give earnings guidance and have to give launch dates. If they miss them, they are in trouble, " he said.

As it transpired, when Intel came calling, Havok had no plans to sell. O'Meara was happy with the progress the firm was making under its own steam, while investors had a profitable company on their hands that seemed to be growing in value with each passing year.

"We had become attractive to a number of third parties but we had no interest in selling to anyone. The reason was the type of people who might have been interested in buying us would have had a partisan interest in the marketplace.

A publisher or a console manufacturer would have been more interested in serving their own needs rather than the needs of their competitors. The ethos here is that we are cross-platform, nonpartisan and available to all publishers, " O'Meara explained.

Intel was different, however. The company wasn't backing any particular horse and wanted to see unrestricted growth in all segments. Essentially, Intel wants the biggest possible market for it to sell hardware into. Havok's software and the games it powers place big demands on computer hardware and gamers are often some of the earliest to upgrade their systems. In short, better software from Havok will require better chips from Intel, which can be then used by Havok to create a better gaming experience.

"From our own point of view, we wanted to grow in Asia, but we don't really have the presence to do that on our own. For example, in China there are issues of intellectual property security. If Intel owns your intellectual property you are going to have less problems. They own fab plants the size of Leixlip out there and as a result they have serious clout, " he said.

O'Meara also thought Intel could help with expansion into other industries beyond gaming. The most obvious one is military training, where existing simulation technologies are years behind those now being used by the computer game industry. Other training applications, along with the creation of crowd control or disaster simulation models, could also be arenas for expansion.

"All of those things can be simulated using physics and, because those industries are not as innovative as gaming, to me it's blindingly obvious that we go there, " he said.

The takeover by Intel will not mean that Havok will disappear to become yet another department of a corporate behemoth. The company will continue to operate as a separate business, maintaining its own brand and identity.

Indeed, according to O'Meara, the perception that the company has fallen out of Irish ownership isn't necessarily correct either.

"We've gone from a situation where we were primarily owned by venture capitalists to now being owned by Intel.

Venture capital isn't necessarily Irish money, it can be raised anywhere, " he said.

Rather than say that Irish software firms cannot take to the world stage on their own, new ownership may allow them to become bigger than they hoped for before, he believes.

CV

DAVID O'MEARA
Age: 54 Job: Chief executive, Havok Education: Terenure College and Trinity College Family: Partner and two grownup daughters
Hobbies: Sports, particularly rugby, GAA and swimming, along with gaming and films
Career to date: Founder of PostGem in Ireland. Later headed US e-procurement service provider Commerx.