One of the local innovation economy’s greatest success stories has remained relatively unheralded—but it’s making a major contribution.
The story of how Gainesville became home to SumTotal, a corporation originally based in Silicon Valley, might not be as familiar to some. But the burgeoning global leader in human resource software now employs 200 locally, with the balance of its workforce of 1,000 spread across the United States and overseas. And the company plans to add another 100 jobs at its headquarters, located on Northwest 43rd Avenue, over the next year.
It has 3,500 customers in 156 different countries, including half the Fortune 500 companies, says CEO John Borgerding.
The story of how SumTotal landed here begins when University of Florida grads Jeff Lyons and Dan Boccabella founded MindSolve Technologies, a company specializing in employee-evaluation software, in 1997. SumTotal purchased MindSolve in 2006, and kept it in Gainesville.
In 2009, Vista Equity Partners bought SumTotal, took the publicly traded company private, and brought in Borgerding. And when he came in, they looked at their operations all over the world, he says.
“We were all over the place: We were in Silicon Valley; New York; Bellevue, Wash., and we had a presence in Gainesville,” he says. “We looked at the best spot to do our business, and Gainesville was the choice.”
The main reason? The abundance of talented people, including graduates of the University of Florida and Santa Fe College, and people from Orlando, Jacksonville and Tampa, Borgerding says.
“With the university and the surrounding cities, you have a very good talent pool of highly capable individuals who are available for a lower cost than in other areas of the country,” he says. “It’s a great place to run a software business.”
When SumTotal was headquartered in Silicon Valley, Google was its neighbor. “When we started to tell the industry that we were moving to Gainesville, they said, ‘Why would you do that? You can’t make that work,’” Borgerding says.
“Well, we moved, and we absolutely made it work. It’s a great testament to the community and the availability of talent and infrastructure here.”
The Business Report interviewed Borgerding, along with Lyons, who’s SumTotal’s chief of staff, and Boccabella, who’s the vice president of product management.
What was the initial idea for MindSolve?
Lyons: Our original emphasis was providing an easier and more accurate way for companies to evaluate employees. That need came to us from a human resources group in California that was struggling with a lack of useful products on the market and wanted to develop something better.
What was your background?
Lyons: We were doing software development at the time. We were working with the statistics department at Stanford, and that created the first product that then started MindSolve.
How did you make the connection with Stanford?
Lyons: We got to know Harold Fethe from ALZA Pharmaceuticals through Charles Steadham, our third partner in MindSolve. Once we won a bid to develop ALZA’s performance appraisal software, people from ALZA put us in touch with Stanford.
How long did the companies know about each other before the acquisition took place?
Lyons: The process took less than a year, beginning with SumTotal contacting us in early 2006 until the acquisition was completed in November of that year.
Analysts who look at various software companies had recognized MindSolve as an up-and-coming company. In addition, we had some joint customers with SumTotal.
Borgerding: If you think about it, back in 2006, SumTotal was only a learning company. It focused on learning applications for large corporations, and MindSolve came from the perspective of talent management and performance management. There was a very natural synergy between the two companies.
What distinguishes SumTotal among companies offering human resources software?
Borgerding: We offer fully integrated human capital management covering every single piece of software that touches an employee’s life cycle.
This includes finding employees, training them, taking them through succession planning, assessing their competencies and performance and preparing payroll.