Wednesday, March 17, 2004

Future's bright for software firm

'It'll be like Microsoft ... putting their arms around our shoulders'

By James Pilcher
The Cincinnati Enquirer

When the three friends and tech specialists left Fifth Third Bank to start their own business, they knew there were "bigger and better things out there," says one of the founders.

This week, the trio that started Dirigo Inc. is about to hook up with the biggest name in the computer software industry, which could turn the local company into one of the biggest tech firms in this area.

On Monday, at a network management summit in Las Vegas, Dirigo was introduced as a partner with Microsoft. Also this month, the company signed an expanded agreement to develop more software for the IBM subsidiary Tivoli, expanding on a relationship with another major name in the IT world.

The new agreements could mean massive growth for the privately held company, which is a subsidiary of the umbrella firm Xpert Business Solutions & Services LLC (XBSS).

"We've been in business for about nine years now, and we've had quite a few successes, but we've never blown the top off of the thing," said company president Peter Jula, who started the company in 1995 with fellow former Fifth Third information technology workers Larry Steinberg and Robert Schutte. "But that's all about to change."

Leaps and bounds

The three met at Fifth Third in 1990, and the friendship soon turned into ideas about a new business.

Dirigo (pronounced duh-REE-go) develops software to help managers of large computer networks monitor their systems as well as connect new software such as Oracle to existing networks. It also has a service division, which is how the company began. The trio soon started getting ideas for new software, and that turned into the development side.

Company officials from Dirigo and XBSS predict annual revenue could hit $50 million in five years; it was just over $1 million last year.

"If we won't triple what we did last year this year, we're all screwing up," XBSS partner Anthony Kelly said.

Dirigo, which employs 14 workers, is looking to double its work force with high-tech programmers and could need as many as 40 employees within the next year.

"We're already out of space and looking for a new office," said Schutte, vice president who oversees the company's professional services division.

Big boost

The partnership with Microsoft is different from the one with IBM's Tivoli.

The arrangement with Tivoli started in 1997 when Dirigo came up with a piece of software that better integrated that network management system with other software. IBM pays for the software and plugs it into its own system, packaging and marketing the product as part of a software package being used by thousands of networks in 35 countries.

The tie with Microsoft, however, is one of association. Dirigo will be responsible for developing, manufacturing and marketing its own product. But those new programs, due out in June, will be listed on Microsoft's Web site as a recommended way to integrate different products for network managers.

Dirigo has its own booth this week at the Microsoft Management Summit in Las Vegas, but also will be featured at the Microsoft Operations Manager booth at the trade show for network managers.

"We can leverage that into more possibilities," Jula said. "It'll be like Microsoft will be putting their arms around our shoulders and telling other companies that we are the guys that can make it work together."

Jula said the new deal could lead to other development possibilities with companies such as Oracle, PeopleSoft or SAP.

He and his associates say the long-term future of their company is bright as well because advances in hardware technology and such mean that networks always need to be upgraded.

"We fancy ourselves as a tech company, not a marketing company," said Steinberg, the company's vice president for software development. "This just came together like a perfect storm for us, and this arrangement with Microsoft could drive our business for years even if we don't talk to other potential clients, which of course we will."


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