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Software—Software firms dominant among high-achievers

Although public investment interest in technology waned after April, private San Diego software companies continued to forge ahead.

So far ahead, that they represented 24 percent, or 12 in number, of the 50 companies on the San Diego Business Journal’s Fast-Growing Private Companies List this month.

The List analyzed the revenue growth for all local, private companies over a three-year period.

The average growth for all of the software developers on The List was a remarkable 664.9 percent. The combined increase in monetary revenue from 1997 to 1999 was $68.21 million.

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Times are good, but this is nothing, conceded several CEOs of software companies on The List.


– Record-Setting Revenues Expected

In fact, they said, expected revenues this year will outperform prior records.

Of course, continued growth all depends on acquiring enough qualified employees, they added.

The prospects of expanded growth sounds exciting, but becoming a market leader was not for Acucorp, Inc., said CEO Pamela Coker. The San Diego-based firm finished No. 38 this year with a three-year revenue increase of 40 percent.

Through the year, Coker’s 12-year-old firm captured more and more of the market as the number of competitors shrunk without much attention.

“There’s a perception in the marketplace that what we do is dull and boring, but it’s very necessary,” she said. “Some people have gotten out of the business because it doesn’t sound as sexy to the stock market as they wanted it to sound.”

Acucorp designs software that enables any business, regardless of size, to modernize essential computer-based programs such as payroll.

The company has sold products in over 70 countries and Coker estimates the firm has more than 10,000 direct clients and a million more in-direct clients.


– Big-Name Clients Served

Clients include Ben & Jerry’s ice cream, DaimlerChrysler’s United States auto dealerships, and the New York City Transit Authority.

“The demand for what we do has not gone down,” Coker said. “It has only gone up.”

But Coker is finding qualified technical employees are more interested in working for the bigger, and what is perceived to be better, firms in San Diego.

One software developer that doesn’t have a problem attracting employees by the nature of the business is Edvision.com Corp., No. 18 with 87 percent growth since 1997.

The Downtown-based educational technology firm is one of the many growing software companies that develops and designs computer programs used in classrooms across the country.

The majority of employees at Edvision.com are former teachers who transferred their internal drive of accountability from the classroom to the workplace, said CEO Bill Tudor.


– Products Widely Used By Schools

The company’s products are used by over 2,000 school districts and in 24,000 schools nationwide.

Tudor credits his company’s customer service skills as the top reason Edvision.com clients, that operate on fixed budgets as most school districts do, prefer his products.

“If you give the customer more than they expect, they become life-time customers,” he said.

But like all successful industries, the software development field is driven by customer demand. And with the rise of the Internet, traditional, commercial programmers such as St. Bernard Software, No. 16 behind 91 percent growth, have retooled their services to mirror customer needs.

Over the past three years, the San Diego-based firm has moved away from strictly developing commercial software programs to creating Internet infrastructure programs.

“The growth of the Internet happened so fast that it outpaced an awful lot of skills and capabilities of people to manage it and we think they need these tools to manage it,” CEO John Jones said.

He expects revenues to top $10 million this year. In 1999, St. Bernard ended the year with $9.16 million in revenue.

By the end of this year, Jones expects St. Bernard will triple the number of employees in development from last year as the firm attempts to keep pace with demand.

“It’s a great market out there and it looks like it’s going to be that way for awhile,” he said.

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