Cincom Systems CEO Tom Nies: Microsoft deal is catalyst for growth

Partnership strategy could triple new business

CINCINNATI - There's no stopping Tom Nies, considered the longest-serving CEO in the software industry who might just be Cincinnati's original tech entrepreneur.

Nies' Cincom Systems Inc., a company that develops database management software, celebrated its 45th anniversary this week by proclaiming itself a growth company.

Cincom remains a privately-held company with 25 shareholders, including Nies, its 77-year-old founder, controlling owner and CEO, who is featured alongside Bill Gates and Steve Jobs in the Smithsonian Institute’s Computer History Collection .

Nies told WCPO that a 19-month-old partnership with Microsoft – coupled with smaller deals with 20 other new partners - could triple the company's annual new business revenue to $60 million in annual revenue within five years. Cincom declined to reveal its total revenue for the fiscal year that ended Sept. 30.

“We’ve organized a strategy and a system around partners to accelerate the growth,” Nies said. “We’re looking for the classic hockey stick growth curve now.”

The growth is not likely to have a major impact on local employment, which now stands at 309 people. Cincom has close to 700 employees in other cities, many of them at client sites across the globe. Still others work for Cincom through third-party suppliers in China, India and the Ukraine.

Microsoft Deal Spurs Growth

Nies said the company’s four-year-old relationship with Microsoft emerged as a growth catalyst.

“It not only helped us advance our product technology, but it’s also introduced us to Microsoft’s large ecosystem of partners,” he said. “This has truly helped us to expand our own partner network.”

Cincom signed a Global Independent Software Vendor agreement with the Redmond, Wash. –based software giant in March, 2012, enabling it to develop advanced manufacturing software for the popular Microsoft Dynamics platform.

“We approached Cincom because we recognized them as subject matter experts in this area of software called complex manufacturing,” said Morgan Wheaton, director of global partners for Microsoft Dynamics. “It lets them get out of the business of writing nuts and bolts accounting software and focus on that part of the application that is really kind of at the tip of the spear when it comes to working with complex manufacturers.”

Apart from Microsoft, Cincom signed 20 new contracts with resellers and technical partners in the last 12 months. Some of Cincom’s new partners include Workforce Management Software Group, PlanetTogether, Dynamicweb North America and eLogic Group.

“Resellers allow us to expand into new markets we wouldn’t otherwise invest in with a direct sales strategy,” says Nies. “It provides us a lower cost of entry and spreads business risk across the ecosystem.”

The company said one reseller brought two new customers to Cincom, each bringing more than $1 million in new business.

Office Has Lending Library

In his ornate office suite, decorated with art, sculpture and a book collection that rivals many libraries, Nies strives to create an atmosphere of learning and cultural enrichment.

“You can tell he likes Don Quixote,” said Wheaton, the Microsoft executive who likes "tilting and windmills” himself. On a recent visit, Wheaton was delighted to see art works devoted to the man of La Mancha, a fictional character from the 17th century.

“They’re a neat organization to work with,” Wheaton said. “The fact that they’re still privately owned and led by Tom Nies gives them a real interesting, familial kind of culture. It’s neat to see the level of commitment they have to their employees, their customers and for that matter Cincinnati.”

Nies’ office, at 55 Merchant St., is a lending library with books on history, theology and philosophy. One section includes a biography of every U.S. president. On the door jam leading from his office, you’ll find a row of Post It notes with favorite quotations. Nies likes to share quotes with employees daily.

“I believe that a company should be a social community as well as a business enterprise,” he said. “People spend more time at work than they do at home or with their family. So, we try to create an environment here that it stimulating and uplifting in every respect.

"Encouraging people to read is part of it, but providing pleasant surroundings, having a good social environment and nice adornment are also part of creating a better environment,” he said.

It’s an environment that Nies has cultivated by avoiding venture capital investments, capital infusion through public offerings and acquisition offers.

“Our strategy is of a company built to last. We’re not here to get rich quickly but we deeply believe in our future and we do want to increase the value of the wealth for current shareholders,” Nies said. “We’re happy

to talk with different companies. One never knows what kind of alliances could be developed. But there is no for sale sign on the building, nor has there ever been.”

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