Software firms' innovations for others pay, even in tough times

A couple of local software companies are proof, even amid all this economic turmoil, that we can build growth companies by making health care and other industries simpler and more efficient.

It's tough to stay optimistic amid massive layoffs and hundreds of billions in federal bailouts to financial conglomerates where leaders betrayed their stakeholders and the country with reckless get-rich schemes. So it's heartening to report about grass-roots capitalists building job-producing enterprises.

A couple years ago, Chris Heim and Dan Mayleben, two veteran software industry entrepreneurs, decided to create a company through small, friendly acquisitions that they hoped would generate $50 million in revenue by 2010.

Edina-based Amcom Software went from $11 million to $50 million in two years. Amcom employs nearly 250 people, 75 of them in the Twin Cities area. And that should be 100 by the end of the year.

"We see an opportunity, over the next three or four years, to be a $100 million- to $150 million-revenue company," said Mayleben, the chief financial officer. "Health care is no longer a 'cost-plus' business. There's a tremendous drive to become more efficient. And a lot of our solutions help hospitals and clinics cut costs and improve patient safety."

In short, Heim and Mayleben bet they could take some of the best solutions from among the five small software firms they have acquired and spread them across their product portfolio. One example: Amcom's Commtech Wireless unit, acquired in 2008, centralizes the information from various monitors and patient technology and sends a wireless message to the appropriate doctor or nurse when they are needed.

About 1,250 of the 6,000 hospitals in the United States rely on Amcom solutions, including 16 of the top 19 hospitals as ranked by U.S. News & World Report, said Heim, the chief executive officer.

A lot of consolidators I've watched focus too much on "cost takeouts" and a growing bottom line that will be fleeting if you treat people poorly. Heim said that if you listen to employees, exploit their talents and share the wealth, they work hard, share knowledge and drive superior services across customers.

"Each deal we've completed has added terrific new team members, customers and solutions," Mayleben said.

Amcom's principals are backed by $100 million pledged two years ago by CIBC Capital Partners, a private investment unit of CIBC, the huge Canadian bank holding company. CIBC became familiar with Mayleben, 47, when he was CFO of Adaytum, another Minnesota software firm. Adaytum was sold to Cognos in 2003 for $160 million.

Heim, 44, was a founder and CEO of HighJump Software who wisely decided not to go public during the tech boom of a decade ago as he grew the company organically before selling it to 3M in 2003 for about $90 million in cash and stock. He helped increase revenue to about $80 million before leaving huge 3M in 2006 in search of his next entrepreneurial gig.

Amcom has ample capital to continue acquiring and growing organically and has no plans to go public.

CEO John Feikema was employee No. 7 of VisionShare in 2001. Now the company has 85, all but five in the Twin Cities.

VisionShare software cuts through the Byzantine billing codes and dead ends of third-party reimbursement to help 7,000-plus hospitals and clinics get paid by private insurers and Medicare.

"Over five years, our annual compound growth rate was over 50 percent," Feikema said. "We had 80 percent revenue growth in 2008."

VisionShare's Secure Exchange Software and managed services help health care providers ensure security, reduce liability and decrease costs associated with delivering confidential patient and financial information over the Internet and across networks.

The electronic guts of health care, including patient records, increasingly will need to incorporate easy access, broad-based solutions for users and lower costs for organizations. These are a couple of growing, low-profile Minnesota-based outfits that seem to be making a difference.