Israel’s Hi-Tech Sector Soaring Bringing Palestinians on Board
By David E. Kaplan
This may not be the much touted “deal of the century” but it is Israel’s deal of 2019 – “so far” – and its only March!
Based in Santa Clara California, Nvidia’s acquisition of Mellanox is the “second largest ever” in the Israeli high-tech industry after global behemoth Intel bought Mobileye – the vision-based advanced driver-assistance systems providing warnings for collision prevention and mitigation – in 2017 for $15.3 billion.
This deal augers well for sustaining Israel’s hi-tech global branding.
Jensen Huang, founder and CEO of Nvidia, said the company was “excited to unite Nvidia’s accelerated computing platform with Mellanox’s world-renowned accelerated networking platform under one roof to create next-generation datacenter-scale computing solutions.”
Huang said he was “particularly thrilled to work closely with the visionary leaders,” of Israel’s Mellanox “and their amazing people to invent the computers of tomorrow.”
Nvidia will continue investing in local Israeli “excellence and talent,” calling Israel “one of the world’s most important technology centers.”
The acquisition will unite two of the world’s leading companies in high performance computing (HPC). Nvidia and Mellanox will together power over 250 of the world’s TOP500 supercomputers and have as customers – every major cloud service provider and computer maker.
Nvidia, will pay $6.9 billion cash to acquire Mellanox (MLNX) -twelve years after the Israeli company’s IPO on Nasdaq.
Mellanox develops and sells high-speed communications equipment using InfiniBand and Ethernet technologies.
Billion Dollar Man
Founded in 1999 by its CEO Eyal Waldman, Mellanox surpassed in sales an impressive $1 billion in 2018.
This will be Waldman’s second exit in two decades. He sold the Israeli chip company Galileo Technology Ltd – which he co-founded – to Marvell in 2000 for $2.7 billion. Marvel Technology, like Nvidia, is also based in Santa Clara California.
A kite boarder and a scuba diver, Waldman, studied electrical engineering at the Technion – Israel Institute of Technology in Haifa.
Responding why Mellanox is important in this marketplace, Waldman explains:
“So, if you look at the world today, the most important asset or resource on the planet is DATA. A long time ago it was real estate; then it moved to energy and now its data. It is the most important asset people can gather and own; the more data you have, the more powerful you become.”
Eyal Waldman is living testimony!
The Times of Israel describes Waldman as a CEO that is “perpetually in a rush, tends to eat fast food, gets joy from his success but spends as much time as possible with his family.”
Asked to describe himself, “I’m just a normal guy.”
The name “Mellanox”, Waldman reveals, comes from combining the sound of “Xerox” with “Millennium” – because the firm was founded in 1999 – and “Ella”, the name of his wife at the time.
While Nvidia redefined modern computer graphics and sparked the growth of the PC gaming market, Mellanox’s solutions include adapters, switches, software and silicon that accelerate application runtime and maximize business results for a wide range of markets including high-performance computing, enterprise data centers, Web 2.0, cloud, storage, and financial services.
Waldman said the company shares the same vision for accelerated computing – “a great fit given our common performance-driven cultures. This combination will foster the creation of powerful technology and fantastic opportunities for our people.”
By ‘people’, Waldman, includes Palestinians as Mellanox is one of several companies with Palestinian employees in the West Bank and Gaza, a source of pride for the firm.
“I think a lot of employees became millionaires overnight, and I’m very proud of that. In Israel and in the Palestinian territories, we have employees in Gaza, Rawabi, Nablus, Hebron who also have Mellanox shares, and I think we will all benefit from this sale,” Waldman told Israel’s Channel 12.
The word is out: Working together is “a win-win for all”.
“We need engineers for high-level programming and together with the Palestinians we can build a large Silicon Valley for the Middle East,” said David Slama, senior director for Palestinian Authority activities at Mellanox Technologies. “We’re missing talent that the Palestinians have on their side. Together we can build a bridge that develops great products for the whole world.”
Instead of outsourcing abroad for engineers, Slama says Israeli companies should look no further than the Palestinian Authority areas, noting that some 3,000 Palestinian information and communication technology graduates enter the market each year.
Setting an example, Mellanox and ASAL – a software and IT services outsourcing company based in Ramallah that employs some 250 technical experts around the West Bank and the Gaza Strip – began cooperating at the start of the decade. Mellanox was among the first Israeli companies to outsource to Palestinian software developers in the West Bank and Gaza. Today, more than 120 Palestinian engineers and software developers work for Mellanox.
Addressing the elephant in the room – namely the Israeli-Palestinian conflict – Tahboub says “it is not a social stigma” to work with Israeli companies. “On the contrary,” he asserts
“Political news is not only what the Palestinian people are all about. We want to have an export-oriented economy based on knowledge and innovation. This is our biggest vision. Innovation, technology and entrepreneurship is the way for the future,” he says. The latest Palestinian Mellanox employees are based out of the Rawabi Tech Hub, in Rawabi, the first planned city built for and by Palestinians in the West Bank, just 20 kilometers outside Jerusalem.
Rawabi is in the middle between Tel Aviv and the Jordanian capital of Amman. “It could absolutely be a hub for innovation not just serving the Israeli and Palestinian markets, but serving the whole region,” asserts Tahboub.
Behind the high-tech “Rawabi City” – Palestine’s first planned city – is Palestinian entrepreneur, visionary, and property developer Bashar Masri who is also the founder and Chairman of the Board of Massar International.
‘Massar’ is an Arabic word meaning “path” and symbolizes the vision of its founder – to create a company that would successfully link the very best of local professionalism in Palestine with international standards.
Says Al Masri:
“We are relying on our historic enemy, Israel, to be our best friend in moving forward. Israel is riding high. Israel is a super-advanced country. If we piggyback on their economy, I hope they will benefit, and they will benefit, and we stand to benefit exponentially. It’s a win-win situation for all of us.”