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Co. Makes Case for Handling Firms’ IT

Abacus Data Systems Inc. is riding into 2016 on the popularity of cloud-based IT for professional offices, mainly law firms.

With new backing from an Eastern private equity firm, Abacus wants to build on its record of 188 percent growth over two years. It’s betting on more growth by expanding its offices and putting out the call for 80 new employees.

Market forces seem to be spurring the growth.

In three years, CEO Alessandra Lezama said, there will be no business case for small and mid-sized companies to have their own information technology equipment such as computer servers.

“It simply will make no sense,” Lezama said.

Meanwhile, she said, high-speed Internet connectivity is becoming as ubiquitous as electricity and running water.

Abacus Private Cloud, which the company introduced in 2014, will run any application on any device anywhere — as long as there is a Wi-Fi connection. The company markets the product as DaaS, or desktop as a service.

The place where the legal market intersects with information technology is a good place to be, said one of Abacus’ competitors. Forrest Blair, who owns Utah-based AirDesk Solutions, called it “a prime opportunity.”

There are several hundred thousand law firms in the U.S., Blair said. Fewer than 5 percent have migrated fully to the cloud. Many do only portions of their business in the cloud. For example, some might use a service such as Dropbox.

The market has also attracted large businesses such as Tokyo-based Ricoh Group, which acquired mindSHIFT Technologies Inc. from BestBuy Co. Inc. in 2014 for undisclosed terms. MindSHIFT offers managed IT, cloud, data center and professional services to small and medium-sized businesses. It has a San Diego office.

“Legal is a huge market for Ricoh,” said Richard Young, mindSHIFT’s director of marketing.

Abacus took the No. 21 spot on the San Diego Business Journal’s most recent Fast 100 rankings, racking up 188 percent growth between 2012 to 2014. The list spotlights the region’s fastest-growing private companies.

New Owner

Abacus grew from $6.31 million in revenue in 2012 to $18.2 million in 2014. Growth continued in 2015, though revenue for that year is unavailable under the policy of Abacus’ new owner, Providence Equity Partners LLC of Rhode Island. Providence took a majority stake in December for undisclosed terms.

Providence Equity seems to have diverse interests. Earlier this month, the firm announced it had invested $96 million in Skybox Security, a Silicon Valley-based security analytics company. In mid-February, the Rhode Island firm announced an undisclosed investment in Dallas-based Topgolf Entertainment Group, which is expanding its group of entertainment centers that host 8 million people annually.

Providence Equity has $45 billion under management.

Abacus reported 140 employees today, up from 78 employees this time last year.

The San Diego business expects to significantly increase the number of employees in 2016, bringing its head count to 200. The 80 new jobs at Abacus will be in sales, development, engineering and client services. Lezama says she wants people who are passionate about helping clients.

Abacus’ employees sit in a large open office, part of the 19,000-square-foot space that the company recently took over. There is fresh paint here and half-finished construction there. Yet to be installed is a game room, complete with 1960s-era pinball machines.

Lezama’s new corner office looks out on the Crate & Barrel store and the busy intersection of La Jolla Village Drive and Towne Centre Drive. It is Abacus’ second office expansion in 18 months.

More than 250,000 individuals use Abacus offerings. The company offers its services not just to the legal market, but to the health care and financial professionals.

More Data Center Space

Abacus’ growth push also included securing more data center space in January. The company operates in three data centers in San Diego, Las Vegas and Texas.

If disaster comes to one center, client data will be backed up at the others, a company spokeswoman said.

Abacus offers a turnkey solution for law firms with time, billing and accounting functions.

The business is familiar with the legal community, its unique accounting needs, bar association rules — and security concerns.

Security is getting more and more complex. “Who’s got the time, who’s got the money” to bring in experts, Lezama asked.

In addition to software, Abacus has a division that offers services tailor-made to a law firm’s needs.

In short, Lezama said, Abacus offers products to increase revenues, reduce costs, maximize efficiencies and make clients’ lives better.

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