Chattanooga's IT industry eyes continued growth

Chattanooga's IT industry eyes continued growth

January 28th, 2012 by Ellis Smith in Business Around the Region

The quiet technology revolution in Chattanooga got a little louder in 2011, when local firm InfoSystems announced 20 percent growth over 2010 and grew its sales to more than $35 million last year.

Local interest in a grass-roots tech sector swelled in 2011, culminating at a community event called 48-hour launch, in which independent developers linked up to create moneymaking ideas.

But established businesses are expanding, too.

InfoSystems, founded by President and CEO Clay Hales in 1994, hired seven new workers in a year that saw some traditional companies scaling back their operations, shuttering plants and eliminating employees.

"Really, there's no kind of magic bullet here," Hales said. "We just try to keep reinventing ourselves."

The business began in the 1990s running network cable through old buildings and setting up servers in basements.

For many customers, Hales was setting up their first server, so none of the wiring existed that was necessary to connect computers together.

"We'd have to rewire the building," he said, a highly physical task that required an entire division of wiring experts.

Fast-forward 15 years, and most buildings already are wired for the Internet age, and new buildings come wired with all the necessary connections.

Rather than throw in the towel, he retooled his business to focus more on consulting, helping a company decide on the front end what it needs to make IT problems go away.

"We still have all those certified people, but most existing buildings have all the right cable, so the structured cabling is a piece of the business that we do ourselves anymore," Hales said.

Part of the new challenge is offering expertise in a market that is so dense and complicated that no one person can know it all.

And while all this is going on, he's been retooling the company day by day, upgrading his own software, hardware and processes.

"It's like we're driving 100 miles per hour down the road and we've got to replace all four tires and rebuild the carburetor and I can't stop," he said.

Perhaps lured by his success, Alabama-based tech firm CTS expanded to Chattanooga last week, opening an office to offer custom software development to area companies.

Ashley Grizzell, who heads up the new Chattanooga office, said the company came to town in part because it scored a major contract with TVA.

"We have a couple of applications that we've developed that we sell for energy and utilities, and TVA purchased one of those," she said.

Grizzell hopes to hire another six employees over the year to join the current team of two, as CTS plies its custom software to other local businesses.

"From what we have seen, there aren't a lot of local companies that have services which we provide, so we're really interested in working in the local economy and being someone who's right down the street, versus someone in Nashville or Atlanta," she said.

CTS hopes to reach $500,000 in local revenue this year, after growing sales 15 percent among its five offices in 2011.

InfoSystems, too, is setting its sights high for 2012.

"My expectation is that we will see a minimum of 10 percent growth in Chattanooga," Hales said.

But experiencing another year like 2011 would be a tall order.

"Back-to-back 20 percent years would be a stretch," he said. "I don't think that's unreachable, but it would really be heroic."