- September 7, 2024
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ENTREPRENEURS TO WATCH: LEE/COLLIER
ASG SOFTWARE SOLUTIONS
Arthur Allen
In the early days, Arthur Allen built his business on his house.
In 1981, Allen sold his first software company for $18 million. He retired to Naples at age 34 and bought an oceanfront house on Gulf Shore Boulevard.
Although he made millions of dollars investing with New York options trader Victor Niederhoffer and perfected his tennis game, Allen quickly grew bored with early retirement.
So Allen created ASG Software Solutions (ASG stands for Allen Systems Group) in March 1986 with $2,000 in cash and a $100,000 loan from Barnett Bank. The collateral was his home.
Allen, who bears an uncanny resemblance to former General Electric chief Jack Welch, calls his home his "angel investor." He's used it to collateralize more than 30 deals to acquire smaller rivals and create the 10th-largest privately held software company in the world today.
Allen says the best decision he's made as an entrepreneur happened in 1998 when he decided to grow by acquiring competitors and complementary businesses. In two years, Allen says he expects the company to reach $1 billion in annual revenues.
In June 2007, ASG made its biggest acquisition, the $211-million purchase of competitor Mobius Management Group. The Mobius acquisition gives ASG another edge in helping companies manage huge troves of data by automation, therefore improving clients' productivity. ASG customers include giants of industry, such as Merrill Lynch, Toyota, American Express, Coca Cola and Fidelity Investments.
Forrester Research estimates the business of providing software that manages companies' data to reach $3.9 billion this year. Companies now need better and more efficient ways to sort through massive amounts of data stored in different ways.
Unlike most of its big competitors, ASG is privately held. That's an advantage because the company can take a loss without suffering a backlash from shareholders and directors. Since Allen owns the company, it's his call to make. Still, he says it's important not to offer products that are too far ahead of their time. For example, Allen devised an email system in the early 1980s but it did not catch on.
Allen is known for his devotion to customers and is fond of saying: "Protect customers with your life." ASG says it charges 30% less than its competitors list prices.
Allen has developed a vast network of contacts in the technology industry over nearly 40 years in the business. He jets around the globe in a Gulfstream 550 to personally visit customers in Asia, Europe and Latin America. In fact, he spends more time on the road visiting more than 80 offices around the world than at his company's headquarters in Naples.
The face-to-face meetings with customers by the man whose company bears his name is crucial to landing new business, Allen's associates say.
Entrepreneurial TIP:
Q. What's the toughest challenge you've faced as an entrepreneur?
A. "Dealing with banks is the toughest challenge," says Arthur Allen, president and CEO of ASG Software Solutions. "When credit tightens, banks always try to renegotiate the loan." That's especially so now as credit-market turbulence shakes the financial world. Allen tells his top-management team that breaking loan covenants is one of his "pain points" and to be vigilant. "I dream about tripping covenants," he says.
BY THE NUMBERS
ASG SOFTWARE SOLUTIONS
Year Revenue* % change
2005: $169.3 million
2006: $181.4 million 7%
2007: $237.0 million 31%
3-year avg. annual growth: 19%
Employees
2005: 964
2006: 1,023
2007: 1,200