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ARCHIVED  October 22, 1999

Software firms short-handed

Labor woes stifle companies’ expansion, productivity

As the year comes to an end, software developers in the region deem it a good one, marred only by a dearth of qualified workers.

“This last year has been another profitable year for us; we’re looking forward to more growth,´ said Rick Valdez, vice president of marketing and sales for Optimus Corp., a Fort Collins developer of electronic document-distribution software.

“You can talk in very broad terms about software development,” he said, attempting to gauge the industry’s health. “Certain segments grow very fast, others not fast at all. I don’t know if there’s significant growth in the number of software companies in Northern Colorado, but another measure is to look at the [level of] competition for qualified people – and there’s a lot of competition for qualified people.”

The Northern Colorado Business Report’s list of Largest Software Companies echoes trends in the national industry, with many niches and markets represented and local owners, managers and presidents unanimously citing what has become the industry’s most well-known challenge and greatest irony:

While the growing number of software firms (both regionally and nationally) work to further eliminate the need for human contribution in countless applications, their greatest hurdle is the need for more humans to help them do it.

“Finding top-quality people” is his company’s biggest challenge, said Relational Solutions Inc. president Dana Van Hoesen. “Getting the best of the best instead of the best of the worst.”

“For whatever reason, people are not flocking to this industry in terms of school, and the industry is growing in leaps and bounds that can’t be supported by the number of people coming in,” he said.

A 1997 report issued by the U.S. Department of Commerce, Office of Technology Policy titled, “America’s New Deficit: The Shortage of Information Technology Workers,” highlighted the industry’s plight:

“Between 1994 and 2005, more than a million new computer scientists and engineers, systems analysts, and computer programmers will be required in the United States – an average of 95,000 per year. One difficulty is that the formal, four-year education system produces only a small number of the workers required. Only 24,553 U.S. students earned bachelor’s degrees in computer and information sciences in 1994.”

As a result, everyone is looking for qualified personnel.

Miner and Miner, Consulting Engineers Inc., which tops The Business Report’s list of Largest Software Companies, is no exception:

“It’s probably our biggest hurdle right now,” reported Roger Meyers, director of operations for Miner and Miner. “I’m spending 90 percent of our time on it right now. That was part of why we just moved over to the west end of Windsor – we were in Greeley in an older building, but the employment base moved from a majority in Greeley to probably, a majority in Fort Collins.”

Besides the competition for people, Meyers is also challenged by the effort to stay current with hardware.

“It’s sort of a catch-22 that the hardware guys come out with new stuff that makes everything run better and faster, but when a new version of Visual Basic comes out every year, and every year it takes more memory to run the thing, we have to update our hardware to keep up. It’s not as expensive as used to be, but it’s not cheap.”

Technology, by all appearances, is growing faster than the body of minds working to advance it. The software and hardware industries are rapidly becoming much more than – and perhaps too much for – the sum of their parts.

Ann Griffith, research director at the Software and Information Industry Association in Washington, D.C., watches trends in the high-tech industry closely.

“The pieces are growing at wildly different rates,” she said, stressing that the software-development industry in particular is almost impossible to track as a whole: There are just too many segments.

Consumer-market software, products intended for home use including games and entertainment software, is “a big chunk,” she said, and despite the industry’s squeeze for employment, remains a $5 billion market with an annual growth rate of about 13 percent.

The broader business-software industry in the United States is another major piece of the overall market – about $50 billion a year – including enterprise, customer-relations management, resource management, manufacturing and productivity software.

A third segment, vertical-market applications (software packages tailor-made to suit a particular industry), is “growing very nicely,” and more than other areas of the market, is attracting startups.

Griffith explained: “It’s not a big upfront, in-your-face kind of an industry, but the profit margins are usually quite good. In a sense, it’s because a lot of the markets for the broad, cross-industry applications (such as Microsoft’s office applications) are so difficult to enter at this point – it doesn’t do you any good to invent a new spreadsheet, but if you can come up with a better system for, say, managing health-insurance invoices, then that’s wonderful.”

But even Griffith, who maintains an optimistic impression of the industry as a whole, can not ignore its ongoing challenges. “Work-force issues are huge nationally and internationally – everywhere,” she said.

Van Hoesen once more lamented: “I keep having dreams at night that it will turn around, but I think we’re stuck here.”

Labor woes stifle companies’ expansion, productivity

As the year comes to an end, software developers in the region deem it a good one, marred only by a dearth of qualified workers.

“This last year has been another profitable year for us; we’re looking forward to more growth,´ said Rick Valdez, vice president of marketing and sales for Optimus Corp., a Fort Collins developer of electronic document-distribution software.

“You can talk in very broad terms about software development,” he said, attempting to gauge the industry’s health. “Certain segments grow very fast, others not fast at all. I don’t know if there’s significant growth…

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