Editor's note: This is another in a series of Colorado company success stories as told by CEOs and business owners.
On August 9th, HEIT agreed to be acquired by Computer Services, Inc. in a transaction designed to enable HEIT to meet its growth objectives. To read more
Outside of banks and credit unions, HEIT may not be a household name. Yet within the financial services industry, the company continues to garner strong recognition as a specialized provider of cloud-delivered technology performance, compliance and security managed services to financial institutions.
Based in Fort Collins, HEIT currently has more than 200 managed services and cloud bank and credit union clients. When I recently met with Dan Holt, CEO of HEIT, the company was getting prepared to expand into yet another, larger space. This company has enjoyed significant growth with their managed services revenue growing by 50 percent per year between 2007 through 2010. HEIT was recently recognized as one of the 2011 Colorado Companies to Watch.
Why did you choose to specialize in managed IT services for banks?
In 2002, Troy Edington, our current COO, and I started a business in my basement in Silicon Valley, focused on security. With Troy's financial services background and my military operations background, we thought 'who needs security the most?' It was a logical extension to focus on the bank and credit union vertical market because we had expertise in the applications and business challenges these institutions face. The banking industry is highly regulated and has unique security, application, and reporting needs. Since we worked with larger banks initially, we developed higher level technical certifications which have become a competitive advantage.
We moved to Fort Collins in 2005, partly because it has more favorable a cost structure, but mostly for a better overall environment, talent, and its disaster-neutral locality.
Why do customers select HEIT?
We know banking. We understand the requirements of the FDIC and other regulatory organizations. We have become so knowledgeable about compliance, for example, that it has become one of HEIT's core competencies.
Managed Services in the cloud is growing very fast. What do you see for the industry?
Gartner research has predicted that 20 percent of businesses will have no IT assets after 2012. The cloud computing sector today is in a 'hybrid cloud" mode for banks and credit unions. Clients have some data and technology on-premise; some have moved to the cloud. It can take years for financial institutions to fully move to the cloud. There are limitations and complexities, especially for the larger banks. Some of the technology is not yet ready for the cloud. We want institutions to have a choice. We're here to help figure out the right strategy to leverage cloud where and when it makes sense for the institution, while providing support and guidance every step of the way.
You have accomplished growth both through acquisition as well as internal organic growth.
We were looking to establish further redundancy by adding an additional 24 x 7 operations center, so in 2010 we merged with Austin - based, Simpler-Webb. We added additional value to our offerings by gaining more effective disaster recovery and economies of scale. Our products were complementary so we benefited through being able to cross-sell and offer our client bases a broader offering.
What's in store in the future for HEIT?
We will continue to innovate better faster, cheaper ways to deliver our services, as well as new products and services like data recovery, the ability to run complete compliance programs in the cloud and more solutions related to storage.
We also will expand into geographical markets through the Midwest and east coast. HEIT is only serving a fraction of the 15,000 midsized banks and credit unions in the United States. We're currently operating in 33 states; we intend to increase the density of our client footprint in each state.
What keeps you awake at night?
As we approach 100 employees and $20 million in revenue, we will reach the next big milestone as a growing company. We have become much more process-oriented in order to scale effectively. We are hiring more experienced people and associating with resources that have "been there and done that."
Another area of attention is to continue to improve and provide the best security for our bank clients. I also constantly focus on what it will take for HEIT to maintain the terrific level of client service that our reputation is built on.
You have a young, energetic culture. How does that contribute to your success?
Our business is fast-paced. We talk about operating at the "speed of HEIT." We have been first-to-market with a number of solutions that have kept us ahead of the pack. We have a culture of winners - competitive people who want to be the best, whether that is in sales, operations or relationship management.
We cultivate learning. Someone will learn more here over the course of 12 months than they ever would learn somewhere else. We offer recognition and reward our employees for everything related to professional development such as paying a bonus for earning the next level of technical certification. We want our people to continue to grow so that they can provide greater value and service to our clients. Contrary to popular opinion, we believe that if we train you, you'll stay with HEIT.
In August, HEIT was acquired by Computer Services, Inc. Why did you agree to sell? Originally, we thought this would be a strategic alliance. But as we got to know each other, it became apparent that this was a good match. Computer Services is a $200M public company with 5,000 bank customers and was mainly a software provider with a small network managed services group. They did not have a full outsourced offering or managed compliance. It is also a great fit. When we spoke with CSI's clients we found that they were raving fans.
We saw that there was an opportunity for HEIT to gain access to a lot more financial institutions. We also saw that aligning with CSI was a win for our clients and our employees. Our clients gained not only with the stability of a much larger organization, but also the addition of more services and a lot more technical resources.