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Silicon Valley Firm Transfers Roots to San Diego

Technology: Bay Logics Is Latest Tech Transplant

Bay Logics Inc. is a $6 cab ride to Lindbergh Field, just the way the company’s president and CEO Sam Borgese likes it.

After all, in this day and age, customer and business convenience is crucial to a company’s survival, the 51-year-old said.

San Diego’s lower cost of doing business is another reason why Borgese, a Del Mar resident, recently moved his software company to Downtown San Diego from Novato in the Bay Area.

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Situated in a 2,000-square-foot office in the same building as Karl Strauss Brewery on Columbia Street, Bay Logics is one of several tech companies making its move Downtown.

“We were able to find some space here that was affordable,” Borgese said. “As a North County resident since 1973, I’m excited about working Downtown.”

Bay Logics, a real estate asset management software developer, serves more than 250 of the world’s most high-profile companies, including Starbucks, Sears and Staples.

Borgese, a real estate professional by trade, helped restart Bay Logics in May 1999. The company, originally formed in 1987, moved from developing straight software applications to developing business-to-business E-commerce solutions, allowing companies to manage their real estate assets via their desktops, the Internet and Intranet.

Borgese said a virtual workplace is becoming increasingly important to companies like Starbucks.

Brick Vs. Clicks

“The brick-and-mortar businesses are under a tremendous amount of pressure to increase their profit margins because of the click-and-mortar businesses like Amazon.com.

“Our economy is based around the virtual workplace, allowing people to have hot links to make critical business decisions,” Borgese said.

He said Bay Logics plans to capitalize on this technology trend. Noting that the company’s market niche is worth $1 billion, Borgese said Bay Logics plans to target 30 percent of the market. The company is doing a market penetration analysis.

As for this year’s revenues, Bay Logics, backed by Peterson Ventures in Salt Lake City, will just about break even, Borgese said. The company, which laid off nearly 60 employees during its restructuring last spring, plans to hire 75 people this year, mainly software engineers and sales and marketing specialists.

Borgese sees strong growth in the future.

To prepare for that growth, the company recently leased an additional 5,000 square feet of office space.

Bay Logics, which has about a half-dozen competitors, plans to add instant messaging and chat rooms this year to its list of technology services.

Strategic Partnering

The company will continue to look for strategic partners.

Bay Logics’ current partners include IBM Corp., Microsoft Corp., Oracle, Crystal Reports, Sybase and the Staubach Co.

Bay Logics also has an agreement with United Airlines in which customers can go directly to the airline’s reservation center.

Borgese predicted Bay Logics will either go public or be purchased within the next 18 to 24 months.

“We believe our core strategy is strong enough to support an IPO,” he said. “We’ve really built a sustainable business plan.”

Borgese may not be a hardcore tekkie, but he has learned a lot of the lingo in the last several months. He even has a hip, purple-and-gray laptop.

“I’ve learned how to be a technology geek,” he said, smiling, as he navigated the Web.

Having a true tekkie lead a technology company isn’t always the best thing. So says Byron Jacobs, Bay Logics’ chief operating officer.

“One of the key factors is having a practitioner who knows what the hell is going on. A lot of companies don’t have that,” said Jacobs, a former management consultant.

He said Borgese is definitely tuned in to what’s going on.

Customers’ Needs

“You cannot create applications unless you have someone who understands the customers’ needs. It’s important to have a real expert and marry that with the latest leading-edge technology and the new millennium of the Internet.”

Although most of Bay Logics’ customers are based in the United States, the company plans to spread its services throughout the globe. The firm is in discussions with value-added resellers in Singapore and India.

Although an Internet-based company can pretty much be based anywhere these days, Borgese said San Diego is the place to be.

“It’s exciting to be in technology in San Diego,” the Philadelphia native said.

“We’re not finding the same volume of talent and support services here that the Bay Area has, but we’re finding good people.”

“It’s the quality of life issues. It’s the same reason why the (former) CEO of Gateway moved his company here.”

Bay Logics is one of more than 2,000 software and Internet companies in the San Diego region, according to the San Diego Software and Internet Council.

“This is still a very desirable place to work,” said council President Richard Custard. “The infrastructure is here , the communications infrastructure, the banks, the lawyers, the accountants, the people we need to be in business.”

High Wages

Custard said while Southern California has a high cost-of-living reputation, technology workers earn more than above-average wages.

“In this industry, six-figure incomes are kind of normal.”

Custard said as more companies like Bay Logics move into San Diego, the stronger the region’s tech base will be.

“I always go back to the analogy of the telephone. A single telephone is worthless. A telephone’s value is its ability to connect to everybody. Our network here keeps getting bigger and better all the time.”

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