November 20, 2011 -
by, Wayne Heilman
Cherwell Software wants to become the largest technology company headquartered in Colorado Springs by creating a platform for midsize enterprises for all
of their software, including information technology management, sales leads, customer service and others.
Unlike many technology companies, Cherwell has taken a different path to become what Forrester Research calls an "emerging leader" in the part of the
information technology industry that focuses on service management — keeping an organization's computers, network and other equipment running properly.
Cherwell has received no venture capital or sold stock to outside investors, and thus has no exit strategy to go public or be acquired by a larger
competitor, said Vance Brown, Cherwell's co-founder and CEO.
Brown and two partners were former executives of software developer FrontRange Solutions before it was sold and moved its headquarters from the Springs.
They started Cherwell in 2004 and rolled out its first product three years later, software to operate an organization's help desk and information
technology service management operations. Cherwell's revenue has more than doubled every year since the first product was launched, and the company now
employs nearly 50 people at its headquarters in the Northgate business park. The company hit a major milestone this year, selling its software to two
Fortune 500 companies Brown declined to name.
Colorado Springs has been a key player in the help desk, or technical support, industry for decades, since Ron Muns moved Bendata (which later became
FrontRange Solutions) to the Springs and started the Help Desk Institute here, Brown said.
"What better place to start a company to develop software for that industry than the birthplace of that industry. There is an incredible wealth of talent
in that industry here, and that is why companies like Hewlett-Packard and Oracle established those types of operations here."
Brown was CEO of FrontRange when it grew from 100 employees in 1996 to 600 four years later. The company went from being a niche player to an industry
leader and eventually acquired GoldMine Software, expanding FrontRange from technical support management software into customer relationship management
Cherwell co-founders Arlen Feldman and Tim Pfeifer were chief software architect and general counsel, respectively, for FrontRange, while Muns serves on
Cherwell's board and also is director of innovation.
They named Cherwell for a river in central England that is a major tributary of the River Thames where authors J.R.R. Tolkien and C.S. Lewis walked
together and talked about the stories that would later become "The Lord of the Rings" trilogy and "The Chronicles of Narnia" series of books.
Brown said the partners wanted to avoid venture capital and outside investors. They found that earlier in their careers, they spent 80 percent of their
time as executives dealing with investors, investment banks and related service providers.
"Our plan is to become larger than FrontRange in terms of the number employed when it was headquartered here, but there is no schedule for reaching that
goal. We grow as the market demands and hire when we can afford it based on revenue and profitability, not financed with debt or venture capital," said
Brown, who declined to reveal Cherwell's revenue or other financial information. "The Colorado Springs market has given us all the expertise we need to
grow, and we have been able to grow quickly because we have been cash-flow positive since 2008."
Cherwell's local customers include Ent Federal Credit Union, Focus on the Family, The Navigators and the University of Colorado at Colorado Springs.
Elsewhere, customers include the cities of Wichita, Kan., and Olympia, Wash.; Western Carolina University and California State University-Fresno; the Royal
Household in England; and the two Fortune 500 companies Brown declined to name.
Cherwell targets midsize organizations with 1,000 to 10,000 employees and offers its software to purchase and install or to lease and use online; the
average customer spends more than $100,000.
Ent installed Cherwell's software in 2008 to replace aging software, according to a case study posted on Cherwell's website. Ent also was looking for
software to help it manage far-flung computer systems and data storage as well as move to integrated and more efficient business processes, the case study
said. Cherwell's software helped Ent reduce the time it spent developing new software for its own use from six months to two weeks. The software also
helped Ent's network become faster and more reliable, and Ent staff were able to fix problems more quickly by keeping better track of service requests.
"Ent has been using Cherwell for process automation and data gathering for nearly four years. The flexibility and capability of the system to match our
business processes has helped support our efforts for continual process improvement." said Chad Graves, Ent's senior vice president of information
UCCS installed Cherwell's software in 2009, allowing the school's help desk for the first time to log all service requests received by telephone, email and
in person and track them until the problem was solved, said Chris Wiggins, supervisor of the UCCS help desk. The software also included an automated
password recovery capability that reduced the help desk's password-related workload by nearly two-thirds, freeing up staff members to handle other
information technology problems, such as fixing faculty computers, he said.
"Our previous help-desk software was email driven and sometimes users never got a response. Now we record every transaction and track it until the problem
is resolved. Users no longer have to call the help desk multiple times," Wiggins said. "The Cherwell software also allows us to provide consistent support,
so if you call three times about the same problem, you should get the same answer all three times. That is a big issue for us because the help desk is
operated by student employees, so we have a very high level of turnover."
Cherwell's software also is designed to be expanded and customized to work with other software, such as accounting functions like expense reports. Brown
said he is trying to position the company to become a primary vendor of enterprise software, like SAP AG, the German information technology giant that
makes software that manages everything from business operations to customer relations.
"Out of the box, we are a service-management provider, but users can build other tools to meet their needs — without a programmer. We want (our software)
to be affordable and easy to operate and configure. If we do that, we can offer business GPS for all the data in an organization on any device," Brown
said. "We also want to host our own (business) app store where companies can share applications they have developed with others. They will be able to take
applications written by other companies and merge them into their common platform."
Contact Wayne Heilman: 636-0234 Twitter @wayneheilman