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IT firms combine to grow

Rochester Business Journal
December 7, 2012

Two Rochester information technology support firms have merged, increasing potential revenue by 30 percent, officials said.
 
Joseph Oster, president of Structured Technologies Inc., and Timothy Scahill, president of Layer 8 Group Inc., said their firms merged this week.
 
The newly formed company, Managed Services Team LLC, will reside in STI's office on Cascade Drive with a combined 35 employees. Managed Services Team plans to add 10 more employees in 2013.
 
The two companies' help desk and technical operations have already been combined. Their development and administration operations will be merged fully by the end of December, Oster said Wednesday.
 
"Tim and I have known each other for a very long time," Oster said. "We've referred business to each other for a very long time and sometimes stolen business from each other. We went to lunch a few months ago and got to talking. As it happened, this was a great fit."
 
The Rochester Business Journal's most recent list of IT support firms ranked STI No. 6 and Layer 8 No. 18, based on number of local support engineers.
 
STI was founded in 1989 as Edgemere Inc. and later became Networks Inc. It became STI after Networks merged with Structured Technologies in 2001. Oster said the company has been focused primarily on managed services for IT support since 2004.
 
Layer 8, which was founded in 2005, also offered IT support but focused on application development, e-commerce, cloud services and Web hosting-something STI stopped doing.
 
"We offered similar services and services that the other didn't offer," said Scahill. "The biggest benefit is what this is going to do for our customers. Putting these two companies together gives us twice as many engineers and better resources for our clients."
 
Scahill and Oster will serve as managing partners of Managed Services Team. Oster will be in charge of finance and sales; Scahill will head service delivery and operations.
 
Oster said the merger will have a significant impact on revenue because the two companies now will be able to handle all IT services in-house. In the past, STI has had to pass off Web and data hosting services to other companies, while Layer 8 had to outsource some of its more elaborate IT support work. That is not the case anymore.
 
"Our business will grow immediately," Oster said. "We're probably looking at a 30 percent increase in revenue right off the bat."
 
Managed Services Team has several hundred small-business clients in Upstate New York. Some of the enhanced services those clients will see include additional sales resources, advanced IT ticketing, reporting and tracking, and more comprehensive data center resources, Oster said.
 
The merger also brings the addition of Dana Abramson, founder and president of Achieve Results Training Corp., a company focused on teaching users to format and use Dragon Naturally Speaking software. Scahill said the addition of Abramson makes Managed Services Team a major player in the local health IT services segment for private doctor offices.
 
"Dana is very experienced when it comes to health IT," Scahill said. "Health IT was a good business for Layer 8, and now it only gets better. It also gives Dana a much bigger team at her disposal for clients."
 
Scahill said bringing in smaller companies such as Achieve Results Training will be part of the company's growth strategy.
 
Layer 8 was no stranger to using acquisitions to increase the company's service portfolio and add talent. In 2008, it acquired two operations from Internet service provider DigiNex. In 2010, it acquired website development and hosting company BlueLineIT Group.
 
Scahill said Managed Team Services will look to make similar acquisitions.
 
"We're looking to grow through small acquisitions," he said. "We're hoping Dana's company is the first of many small companies that have few people who can come in, add to our team and have clients that can benefit from all the new services that we offer."

12/7/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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