Technology evolution drives opportunity, challenges for firms
The constantly expanding and shifting world of technology provides a lot of opportunity for small businesses, but it also opens challenges for them to keep up with the big budgets of larger firms, executives said.
"The most interesting change is the kind of solutions we can offer and the solutions the market is demanding," said Eric Etkin, vice president of Seisan, a Lancaster-based tech company that develops custom mobile and Web-based software applications.
The expanse of new technologies such as smartphones and tablet computers, as well as more connectivity in automobiles, presents many small tech companies with opportunities to capture business with their larger brethren, he said. The devices also expand opportunities for tech firms such as Seisan that have focused on location-specific apps.
For example, Seisan designed some of the location-specific software for rental car company Hertz's NeverLost navigation devices, including consumer-facing apps and some of the backend reporting, Etkin said.
In a way, the technology world has an excited feel similar to the industry boom of the late 1990s, except this time a viable business model is required instead of having someone pay $10 million for a dog food website with no functionality, he said.
"It was so inflated and fake then, because everyone wanted to be online but they didn't understand," Etkin said.
Despite the abundance of opportunity, small companies can be tested by keeping up with the constant evolution of technology in software and hardware.
"The challenges for many (small companies) are the cost of the technology, especially around the first or second years," said Scott W. Thomas, president of S.W. Thomas Consultants Inc. "Whether it's servers or storage, the cost of some of these things can be prohibitive."
S.W. Thomas is a Cumberland County-based managed services company that acts as the IT department for small and mid-size businesses. The Camp Hill company's growth during the past 10 years has been slow and steady, Thomas said. Today, revenue is about $500,000 and the company employs three people.
Small IT companies really need to concentrate on getting their names out to potential customers and pricing their services so they don't lock out clients while still meeting budget, he said.
"For us it's an even bigger challenge, because we have to keep up with all the latest technology," Thomas said.
That means buying and using the same computers, servers and other hardware they sell to clients in order to be able to recommend it, he said.
Other companies try to tackle workforce issues in the ever-changing world of technology.
The right kind of talent isn't easy to find, especially when it comes to mobile apps and other enterprise programming, said Paul Benninghove, principal of Harrisburg-based software and e-commerce company Mudbrick Creative. In some cases, what's being taught at some colleges isn't the latest, greatest thing, he said.
"There's a bit of a lag between the training available and what the market is demanding," he said. "Honestly, some of the best programmers I've seen are self-taught, those who took the initiative to go out there and learn these new skills."
Benninghove declined to share the company's revenue figures. The company has been growing steadily in recent years, expanding its client base and employees. Two weeks ago, it hired three new people for a total of 10.
Technology has been a fast growing part of the midstate's economy, he said. Six years ago, there were many companies that didn't use a lot of technology in their business, he said. But that's changed, and more companies are embracing the Web as a way to drive marketing, even if they're true business-to-business companies, he said.
"Today, they're realizing they need it, because no one's going to be looking for them in the Yellow Pages," he said.
In a competitive environment, there's a certain rush to being a small company in the technology fields, Benninghove said.
"(I like) the speed of it, how quickly you have to make decisions and be proactive," he said. "You take risks, but the rewards are great when you're successful."
The ones and zeros of midstate technology
Central Pennsylvania's technology sectors are some of the more robust in the state because of the bountiful government presence, as well as large companies, around the capital region. Here are the digits for computer systems design and related services:
• The South Central Workforce Investment Area — an eight-county region that includes Cumberland, Dauphin, Lebanon and York counties — had the fifth-highest number of establishments at 413 company locations in 2009, the most recent statistics available.
• The sector employed 4,070 people for the same region, making it the fourth-largest in the state. The sector doesn't include all tech companies or industries.
• Lancaster County Workforce Investment Area had 118 establishments and 626 employees in computer systems design and related services, placing the county ninth overall in the state.
• The top 10 are rounded out by the Lehigh Valley, Philadelphia and its suburbs and the Pittsburgh area.