CentreTEK finds niche in midsize market

Software company plans to taper down services

Small business

January 28, 2002|By TaNoah Morgan | TaNoah Morgan,SUN STAFF

Last year, Jay Miller just wanted to prove he could generate revenue for his CentreTEK Solutions, a startup software development company.

One year and $1 million in revenue later, he wants to refine his Ellicott City company's strategy and prove it can generate revenue well in a niche market.

"We want to taper [our services] down to a few things that we do really well," Miller said. "We have to get a little smarter about how we do business."

For Miller, "smarter" means focusing on a niche market, such as writing customer relations management software for midsize companies, where CentreTEK can grow.

According to one analyst, that's not a bad move.

Customer relations management, or CRM, is a fast-growing segment of the business process. According to the Yankee Group, a Boston-based market research company, the market segment in which companies spent about $4 billion last year is expected to reach $6.7 billion this year and grow to $10 billion by 2004.

Although the technology has traditionally been an exclusive amenity for Fortune 500 companies, it is the opportunities at midsize firms that will help push the growth of the sector, said Sheryl Kingstone, a program manager with the Yankee Group.

"If you look at the midmarket, it's virtually untapped at this point," Kingstone said. "Even [market leader] Siebel [Systems Inc.] has decided to enter the midmarket."

Miller knows the potential for this niche - he's seen a demand for it in the year since he and partner Jose Maldonado founded CentreTEK.

Of the dozen or so projects the group has undertaken, about a quarter of them were to develop a specialized CRM application for a midsize company.

CentreTEK's advantage is that it can write software for a single purpose much more cheaply than the multifunctional and multimillion-dollar systems companies such as Siebel have available.

"This is a fraction of that cost," Miller said. "It allows that smaller organization to get the same results."

For example, CentreTEK is working on an automatic e-mail responder system for a company that works with college and university admissions offices.

The system would help route incoming e-mails to the appropriate person to respond to them, and send out automated responses when necessary.

CentreTEK has grown to 16 employees housed in a lofty open-space office in Ellicott City, and Miller said he expects to keep growing this year. He projected that CentreTEK's revenue will double this year, and he said he expects to hire about as many as twice his current staff to keep pace.

Part of the business success has been in consistent government contracting, Miller said. So far, the company's client base has been split about equally between government organizations and private businesses.

As the company moves forward, focusing on CRM and streamlining its business processes, that's a balance that Miller said will continue to help the company grow.

"If you have steady, predictable contracts, you can use that to take more risk on the private side," he said. "Hopefully we'll add new accounts and continue to grow the current client base."

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