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"35 Software Firms Develop Local Industry Trade Group"
by Jennifer Beauprez
Published in Crain's Cleveland Business

The last thing Don Scipione wanted to do was tell competitors about his company's struggle with finding talented high-tech workers. But when Mr. Scipione and 34 other software company leaders met last month to form a software trade association, he realized he wasn't alone.

``I was skeptical at first, but it was quite a good meeting. Everyone else has this problem, too," said Mr. Scipione, president of Acme Express Inc. in Cleveland. The 12-employee company produces software for truck routing and employee staffing, and it needs to add six people to handle growth.

As a result of an Oct. 15 meeting organized by the Greater Cleveland Growth Association, 35 software companies have joined together to form a local industry association. The association doesn't have a name as yet, but it does have a couple goals: to create a greater awareness of Cleveland as a technological hub and to help ease the challenge of finding the high-tech workers and financing necessary for continued growth.

``One of the most important things we can do is find a better way to bring qualified employees into the area for everyone's benefit," Mr. Scipione said. "An organization can attract people better than an individual company."

InfoRad Inc., a maker of wireless messaging software in Cleveland, has faced the problem of securing financing and finding a lending institution willing to recognize as assets InfoRad's few computers and the intellectual property represented by its skilled employees.

``The perception of the value for software is harder to determine than it is for a manufacturing company," said Paul Fitzgerald, president and CEO of InfoRad. Like many software developers, Mr. Fitzgerald said he hopes an association can help InfoRad secure the financing it needs to grow.

The trade group could work to educate banks and lending institutions on the benefits of lending software companies capital, said Kerry Dustin, chairman of Falls River Group, a Cleveland merchant banking firm that buys and sells software companies. Mr. Dustin is leading the effort to organize the association.

``Banks and financing institutions don't want to lend to companies whose principal (asset) goes home every night," Mr. Dustin. "They're so used to investing in smokestack America, where you have land, machines and equipment."

Cleveland technology consulting firm Realogic Inc. hopes the trade group can push for more economic development financing for software companies and perhaps can establish Greater Cleveland as "the technology hub in the Midwest," said Lee Weingart, Realogic general counsel.

``There is strength in numbers," Mr. Weingart said. He said a trade group "not only gives us a voice in Columbus, but nationally."

The success of similar software groups in Cincinnati and Chicago is promising, said Bill McClung, business retention consultant for the Growth Association. Mr. McClung said Chicago's software association grew to 450 members from 40 in just three to four years.

The organization could lead to more partnerships and joint-venture opportunities among Cleveland-area companies, he said.

Even without a trade association, Cleveland's software industry appears to be thriving. A Growth Association poll conducted last year showed more than 640 software-oriented companies that are generating more than $1 billion in annual revenues are operating in Northeast Ohio.

Mr. Dustin said the goal now is to let the rest of the world know about Greater Cleveland's growing industry.

``Software is alive and well here," Mr. Dustin said. "We're not only the rust belt -- we're the knowledge belt."

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