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Letting grow Featured

1:16pm EDT September 22, 2003
Arthur Divell is late. He is in the building, though.

In fact, he's just in the next office. You can hear his voice through the wall.

Divell is late because he's debriefing a couple of technicians about a recent installation of his firm's service management software package. Those duties are not unusual for the CEO of a 35-employee software developer, but Divell has been trying to hold fewer of these meetings in the last few years.

In 2000, he and the other founding partners of Garfield Heights-based Data-Basics Inc. hired a management team to run the day-to-day operations so they could focus on long-term strategic planning. Sometimes, however, it's hard to let go.

"I have to admit, I do get pulled back in sometimes," Divell says. "But the more stuff you have to do in other areas, the less the temptation there is. The worst thing that can happen to me is not to have anything to do."

Divell has been busy lately expanding the company beyond the construction and engineering industries where Data-Basics honed its niche. He's out pitching the retail and facilities management industries, going to trade shows and writing articles for industry magazines. And Divell has hired a public relations firm for the first time in his company's 29-year history.

"If we hadn't built the new management team, we wouldn't have come to that conclusion," Divell says. "Now we can look at the medical market, food service, elevator companies, companies that sell material handling equipment. It's just enormous."

There aren't many software developers founded in the 1970s that are still around, especially smaller firms, which are usually crushed by the major players or acquired.

Not Data-Basics, which traces its roots back to 1972, when Divell met fellow Case Western Reserve University graduate students William App and Rick Martin, who would form Data-Basics two years later.

Through the university, the students won a contract from Texas Instruments to write business-to-business software applications. The success of their first project led to more work for the trio.

"We decided we were bringing a lot of money in and we wanted to form a company," Divell says. "We wanted the university to share in that. They really didn't want to do that, so we incorporated and did it ourselves."

Eventually, the entrepreneurs grew tired of writing software for other companies and decided to create their own business management applications for service contractors, construction companies and architectural firms.

"I looked at one of my partners and asked, 'Do you know about accounting? Because I don't know anything, but how bad could it be?' says Divell, who now laughs at his youthful hubris. "He was a math major, and furthermore, he has a photographic memory. He's one of the brightest guys I've ever met."

In 1974, Data-Basics was founded in Cleveland, and eventually built a name nationally as the preferred job-cost accounting software for construction firms and civil architectural and engineering firms. In the early days, however, there were some setbacks.

"The first job we did, we put in a complete system for $4,000 and it took us two years," Divell says. "You have to be good enough to survive your mistakes. The whole thing: The people, the product, the organization. If there's a problem with any one of those, you're done."

Enter the personal computer, which in the late 1970s was still a novel concept.

"They were working on mini-computers and mainframes," says Jean Knox, Data-Basics' technical marketing manager and author of three software training books. "In the 1980s, we have this next batch of new technology that we have to be able to respond to. The question is, where is the world going to go? Is it going to stay on these Wang computers or is it going to adapt to the PC?"

The answer was obvious to Divell.

"It was clear in our minds, even at that time, that the way the chip technology was going that performance was going to be increasing drastically and price was going to continue to go down," he says. "You could see that PCs were going to be the future."

In 1983, Data-Basics' software, then called CMAS, was re-engineered for the IBM PC. Five years later, it was updated for a multiuser, networked environment.

The software development cycle is not unlike that of the auto industry. What you start working on today won't come to fruition for five or even 10 years. Data-Basics' flagship software suite, SAM Pro Enterprise, has more than 2 million lines of code and continues to grow. In this industry, you have to be thinking where the market is going to be in the next decade, not what it's demanding now.

That's why, when a new software operating system called Windows came along in the early 1990s, Divell had to once again play the prognosticator. Should he reconfigure his software for Windows or just do a quick fix like many of his competitors and make it look like it's Windows-compatible, leaving the same DOS-based architecture underneath?

"We knew that it would be three to four years before the hardware would even keep up," Divell says of the first Windows version of the software. "The machines were just flat-out too slow."

Banking on the success of Windows, Data-Basics started from the ground up, re-engineering its flagship product and renaming it SAM Pro Enterprise.

"As it turns out, it worked out because the Internet builds on what we have," Knox says. "We didn't have to throw it away and start over again. That was taking a chance. It's an informed chance because these guys really know what they're talking about, but it's still flipping a coin in the air to a certain extent."

In 2000, Data-Basics reached the point where it needed to tap new markets. Divell stepped down from his day-to-day operational duties to seek those markets.

Co-founders App and Martin focused strictly on new software development. A new president, a director of product engineering, a lead software engineer and a marketing manager were added to run the daily operations.

Divell, though, has not lost sight of what made Data-Basics successful in the past as he looks to the future. Just as he was able to predict in the 1970s that the PC would dominate the industry, later followed by Windows in the 1990s, it's safe to say he will know where to lead his company today.

"Marketing needs visions of the future, too," he says. "It's a matter of spending time, getting out and trying to develop some vision of what markets you attack and are viable for you, that you can adapt the product to."

Divell's first target was the facilities management industry, which resulted in a 50 percent increase in Data-Basics' client base. To date, it has 500 clients worldwide.

"It's an area we could be a dominant player in within the next year-and-a-half, two years," he says. "We're quickly becoming the dominant player. We've sold systems to a number of vendors who are at these shows.

"Now the problem we have is, who do we go after next? It's exciting, actually." How to reach: Data-Basics, (216) 663-5600 or www.databasics.com