Five Questions For Inforonics CEO Bruce Mills

Inforonics (No. 463 on the 2004 VARBusiness 500) has been around for more than four decades. After weathering the highs and lows of the Internet boom, the Littleton, Mass.-based company has built up its managed services model for custom applications and recorded more than $23 million in sales for 2003. Inforonics CEO Bruce Mills, who earlier this year was named to the advisory board of the MSPAlliance, an industry consortium of managed service providers, shares how his company has evolved over the years.

VB: Your company has been around since 1962. What was Inforonics doing back then?

Mills: The founder of the company was in publishing, so we developed one of the first databases for the U.S. Library of Congress and also did the first conversion of the card catalog for the Boston Public Library. We were a database-centric company back then, and we did a lot of content publishing. We developed a lot of experience working with customized software.

VB: How did you convert to managed services?

Mills: We started doing managed services and hosting for custom-built applications around 1994, and that became our niche during the dot-com boom. We got into the Web in a big way, and the company grew during the height of the boom to about $50 million in sales. We realized we had been doing managed services for custom applications from the beginning, and we became much better at defining our core service offerings. When it became clear the bubble would pop, we started an acquisition strategy for that core business. At the same time, we broke Inforonics into pieces and kept our managed services business, but off-loaded other parts of the company, which became their own separate entities, like Prospero Technologies, which is a software developer and, like us, is owned by Mallory Ventures.

VB: Do you run into a lot of clients who don't really know what the value proposition of managed services is?

Mills: Sure, because it's a cultural thing. Some customers are receptive to the managed services mode and really embrace the idea because they want to outsource nonessential work. With other companies, you just run into a brick wall because they don't want to relinquish control of their IT in any way. We specialize in midmarket companies, and to build trust with clients initially, we usually start off with some type of small solution that's relatively innocuous so they can get comfortable with us. After that, the sale is quite easy. We position our managed services as sort of an insurance policy, and we explain to them that we have the expertise and infrastructure to monitor their software much more cheaply than the customers could do it by themselves.

VB: Are you feeling competitive pressure from offshore outsourcing at all?

Mills: Not really. Customers like having their applications managed and serviced here and not somewhere far away. They're able to have a closer relationship with us. We have run into companies that have tried offshore outsourcing, didn't like it and then came back to us. They figured out what component of offshore outsourcing they liked, which is commodity software work, but it just doesn't seem to work for a lot of the bigger custom-developed applications.

VB: Last question: What did you do when the Red Sox won the World Series?

Mills: I think we all just sat back and let out a sigh of relief.