By Garret Ellison | email@example.com
on January 09, 2013 at 7:50 PM, updated January 09, 2013 at 10:15 PM
GRAND RAPIDS, MI — A local tech firm that makes software monitoring products for Fortune 500 companies is going through a growth spurt this year after getting an infusion of cash from a pair of West Michigan venture capital funds.
Blue Medora, a software development company that spun-off from Atomic Object in 2008, got a combined $1.25 million from Start Garden and Grand Angels this week, money that company CEO Nathan Owens said will help the firm expand into new markets.
While the $750,000 Grand Angels chunk represents the largest investment portion, the $500,000 from Start Garden marks the largest single investment by Rick DeVos’ firm to date, and is the latest in a series of recent gambles on more seasoned, second-stage companies demonstrating market potential.
“With the Blue Medora investment, we invested aggressively into seasoned entrepreneurs working in a space with huge potential that they know very well,” said DeVos.
Blue Medora writes plugin efficiency software that helps larger companies manage databases and monitor internal infrastructure using systems like Oracle Enterprise Manager and IBM Tivoli. Among other things, such programs help companies understand available data storage capacity, avoid server crashes and optimize applications so the company can do more with the software they already have, said Owens.
Global enterprise monitoring is a “multi-billion dollar.”
“It’s definitely not as dynamic as, say, the mobile applications market, where you develop something today and three months later it’s out of date,” Owens said.
The market for monitoring software tends to be more stable because large companies tend to adopt new technology at a slower rate, he said. That allows firms like Blue Medora to evolve products over a period of several years without the constant worry of immediate obsolescence.
“Companies tend to buy these packages and keep them a long time,” he said. “They don’t like a lot of constant change.”
Today, Blue Medora has 22 employees and hopes to grow that number to 35 by mid-2014 using the new growth capital. Owens started the business in 2007, incubating the company at Atomic Object, a surging web development firm headquartered on Wealthy Street SE with offices in Detroit.
Owens took the company standalone in 2008 when IBM liked their first product, a monitoring solution for the PeopleSoft Oracle package, which IBM decided to sell under its own name to customers.
Owens has expanded the relationship with the multinational tech giant since then and has been recently branching into larger relationships with Oracle, which is the world’s third largest software maker by revenue, behind Microsoft and IBM.
He said Blue Medora, with a client list around 50, is gaining velocity in the marketplace and beginning to attract the attention of analyst groups like IDC and Gartner.
“Systems management is rapidly evolving,” he said. “Companies are moving away from single solution systems management and demanding more customization and integration into cloud-based solutions like VMware.”
Owens said his staff is almost entirely comprised of graduates from Michigan universities like Grand Valley State, Western Michigan, Eastern Michigan, Central Michigan and Michigan Tech
“We’re finding a good pipeline of talent coming out the (computer science) programs in those schools.”
TROUT CREEK VENTURes
A regional co-investment fund specializing in angel and early stage private equity.