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Small businesses leading Greater Lansing’s technology revolution

Monday, May 1, 2017  
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 While other communities often receive more notoriety for their space in the technology industry, the Greater Lansing region has quietly developed a robust IT sector. The Capital Area IT Council says that more than 13,000 people in the area are employed in IT-related jobs and that jobs in IT are growing almost seven times faster than the rate for all jobs. Insurance, healthcare, government and education are responsible for much of the growth.

Greater Lansing is home to more than 400 small IT related businesses. Those firms combined are creating thousands of jobs in the region and growing rapidly. Two of those companies, Doberman Technologies and ASK, were recently named to the prestigious Michigan 50 Companies to Watch as part of the 13th Annual Michigan Celebrates Small Business awards dinner.

“The companies selected this year give us an understanding of Michigan’s successful entrepreneurial ecosystem,” said Jennifer Deamud, director of Michigan Celebrates Small Business and associate state director of the Michigan Small Business Development Center. “These companies are significant drivers of our economy. In addition, they play a critical role in their communities as job creators.”

Ian Richardson, founder and CEO of Doberman Technologies said receiving the award is a ‘very large honor’ and noted the significance of both Lansing area companies receiving recognition in the technology arena.

“I’m really happy to see that both companies are in the IT provider space,” said Richardson. “There is just a lot of really good talent here.”

“It’s a validation of everything we have been doing,” said Mike Maddox, CEO of Lansing-based ASK. “It validates our approach of doing the right thing for the clients, having a solution mindset, not taking short-term profit over long-term relationships and treating our staff professionally.”

Doberman Technologies and ASK are two of many IT companies in the region that are enjoying explosive growth. The Michigan 50 Companies to Watch designation is recognition of their role as small business leaders creating jobs, investing in the community and poised for continued growth.

ASK: Taking the hassle out of technology

The common evolution for a successful IT startup looks something like this: computer geeks working out of their home or dorm room at college turn a hobby into an idea for a business. The company starts with one or two people, works with a few small businesses, establishes its niche in the marketplace and grows from there.

For Lansing-based ASK, the story is a bit different. ASK was formed by three former IBM executives in 1993. The company used their IBM connections to service large corporations. ASK focused on the mainframe universe and relied on very little sales and marketing to support their business. That worked well until the main frame started to reach the end of its life cycle.

“The world was becoming a Microsoft distributed Windows world,” said Maddox, a former IBM employee who joined ASK in 2004 and now serves as CEO. “The owners of the business realized that though they had a successful business, they needed somebody to come in and take the company in a new direction.”

That new direction was what has become known as Managed IT Services, in which companies like ASK become the 24 hour a day IT provider, handling all IT functions for organizations for roughly what it would cost a company to hire full-time equivalent employee. ASK has evolved into a technology consulting and security company.

“We don’t believe in selling technology for the sake of technology,” said Maddox. “There is no value added in our opinion in just selling hardware or software. If you don’t understand and address the fundamental technology problems that a business has, selling them more hardware and software only makes their problems run faster. You have to get to the root of the problem.”

Tied to that approach is the issue of cyber security which has become the number one IT concern of businesses large and small. ASK has a separate division of its company, solely dedicated to enhanced security services, which is now the fastest growing part of ASK. Ironically, ASK’s success in this arena has led to many of the large corporations that ASK worked with in its early years to bring the company on board as its security consultant.

“Most of these companies are saying ‘we don’t want to pay a big cyber security firm millions of dollars a year and not get a return on investment’,” said Maddox. “We can do the same thing that the big guys can do or more for a small fraction of what they are charging.”

ASK has been in a period of rapid growth, which Maddox thinks will evolve into a period of hyper growth in the next few years. ASK and its 40 employees are bursting out of its current headquarters on Lansing’s south side and will be looking for a new home. Geographical growth with potential offices in Detroit and the west side of the state also loom as possibilities for the company.

“I think with our organic growth and the growth of our cyber security division, which has led us to about 20 percent growth per year, I think we will see that grow by another 20 percent,” said Maddox. “We’ll continue to add people and jobs for the foreseeable future.”

Doberman Technologies: Keeping talent at home

Ian Richardson might be viewed as a poster child for the notion of homegrown technology talent. Richardson grew up in Okemos, attended Lansing Community College (LCC) and graduated from Northwood University. While at LCC, Richardson started Doberman Technologies on a part-time basis in 2005. He left the security of his career at LCC to take the business full-time in 2010 and hasn’t looked back.

Since 2010, Doberman has steadily built a successful business that specializes in acting as a third party IT management firm functioning as a fully outsourced IT department for organizations.

“Anything an IT Department would do from the day-to-day service and customer support through purchasing, budgeting and helping companies meet business objectives is what we do,” said Richardson.

Though Doberman has clients in a diverse array of industries, the company has become a leader in working in the healthcare industry. The firm has experienced steady growth, averaging better than 30 percent year-over-year growth, and surpassed a 60 percent growth rate in 2016. Being in tune with the clients’ needs is what Richardson feels has been a key differentiator for Doberman.

“In general, the IT industry has done a bad job in the past, coming up with bad pricing models and all sorts of IT lingo, which makes it pretty confusing as to who is in it to be a partner with an organization versus who just wants to take the money and leave,” said Richardson. “We truly try to be different and understand our clients’ needs from their business point of view.”

Richardson feels that Michigan and the Greater Lansing region deserve greater recognition around the country as a leader in technology. He notes that the state has made a significant rebound from the devastating recession of the last decade, regaining seven out of 10 lost jobs, and moving from one of the worst unemployment rates to being better than the national average.

“Lansing is leading that charge,” said Richardson. “There is major investment from large scale employers and small businesses, and there is top-tier talent, born and raised right here in the Capital.”

Richardson foresees strong growth for Doberman and expects to duplicate the firm’s 60 percent increase again in 2017 as a result of a recent merger. Doberman completed a merger with Nonik Technologies Inc., an IT management company based in Hillsdale, Michigan. The merger brings the Nonik staff, along with their operations in Hillsdale, under the Doberman brand.

“We’re very excited about the potential to move forward and grow together along with the Nonik team,” said Richardson. “Nonik has longstanding relationships in the Hillsdale community and was a perfect cultural and technological fit with the Doberman team. Together, we’re looking forward to reinvesting in the Hillsdale community and continuing to grow alongside the community.”

Richardson also expects Doberman to continue to add jobs and eventually outgrow its downtown Mason property. He hopes to be able to acquire nearby property and eventually construct a new corporate headquarters, and potentially see creation of a technology district in the Mason community.

Tech trend line moving up

Michigan is at the forefront of IT growth nationally. The state added 10,700 tech jobs in 2016, and currently ranks tenth in the nation in the number of IT jobs and is top five nationally in terms of IT growth. The Greater Lansing region is making its own mark on the tech front. The region is learning to leverage its diverse economic base along with its many assets to retain great talent in the region, including a low cost of living, improving entertainment and cultural options, good schools and easy commutes. The region is also the proud home of an entrepreneurial spirit that is reflected in the success and growth of its small business sector. With the continued success of IT leaders like Doberman Technologies and ASK, the tech trend line is certain to continue moving up for years to come.

Click here to download the May issue of FOCUS.


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