Merchantz has built one sweet software company

May 29, 2006

BY MICHAEL KRAUSS

Chicago tech companies are being scooped up. Atlanta's Infor is acquiring SSA Global Technologies. Santa Monica's Boingo is buying Concourse Communications. Who's next?

"Lakeview Technology is a hidden gem," says Fred Hoch, president of the Illinois IT Association. Hoch isn't suggesting Lakeview is for sale. He's praising the company.

"Lakeview CEO Bill Merchantz has done a great job over the past 15 years building a solid company, with substantial revenue and presence. They don't get the recognition they deserve," adds Hoch, and he's right. Merchantz has built one sweet software company.

Merchantz, 49, is an unlikely Chicago tech pioneer. Growing up at 79th and Campbell, he played center on Bogan High School's basketball team. He still remembers losing a three-point heartbreaker to state champ Phillips High School his senior year.

He got his start in technology when coach Bruce Robinson threw a Fortran IV programming manual his way saying, "Don't hang out on the street corner. Read this book."

It led Merchantz to a part-time job as a programmer. It ultimately made him rich.

UIC grad

Merchantz earned a scholarship to the University of Illinois at Chicago, graduating with a business degree in 1979. He stayed two years as an assistant coach, but realized technology, not athletics, was his calling. His skill in systems led to jobs at Federal-Mogul and Skidmore Owings and Merrill.

In 1984, Merchantz was one of four co-founders of Whit- man Hart. He met CEO Bob Bernard though classmates at UIC.

"Our first office was a file drawer in a closet at a headquarters facility on West Bryn Mawr," Merchantz says.

Naperville-based Tellabs was an early client. "Tellabs had critical business information sitting on a server," he recalls. "They were concerned. What if they lost that server?"

He cut a deal with Tellabs founder Michael Birck to create software to back up the data, provided Whitman Hart retained the intellectual property.

"We owned the IP. The rest is history," Merchantz says. As Whitman Hart scaled in IT consulting, Merchantz focused on selling software and Lakeview Technology was born.

"There were resource issues," Merchantz says. "Do we put more resources into services or software development? I decided to take the software, spin it out, and sell my interest in Whitman Hart to Bobby and his investors."

Lakeview builds products that protect critical transaction data.

"The New York Mets use our software to keep their ticketing system up and running," Merchantz says.

The team sells tickets. That data has to be backed up in real time. If there's a disruption, they can't afford to lose a transaction. You might come to the ball park and find they resold your seat.

Merchantz MIMIX product avoids that scenario.

"Allstate uses us to secure their Web sales information. Our software sits on company's computers. We capture real time any transaction that occurs. We pull those transactions off, and put them on a backup resource anywhere in the world," Merchantz adds.

Is it a good business?

You bet.

Says Merchantz, "Because we sit in the company infrastructure, we play in every industry. MIMIX has been installed at 3,000 sites worldwide. Not surprisingly, his largest business partner is IBM. Clients include CDW, Cingular, Honda, Qualcomm, Motorola, the USDA and the U.S. Mint.

Son of a brick layer

Merchantz credits his parents for his entrepreneurial skills.

Merchantz says, "My mom and dad were very smart. My dad was in the trades. He was a brick layer who used to run all the jobs. I have vivid memories of him with the blueprints sitting there figuring material the night before the next job. My mom was a bank teller for over 30 years. They were bright people, but didn't want to take the entrepreneurial step.

"They didn't want all the headaches and issues associated with starting, growing, and running a business."

But they taught him the skills and inspired him.

Merchantz wanted the entrepreneurial challenge, and he succeeded.

The only question remaining is will he grow the company or sell?

Either way, Merchantz is a winner in my book.

Michael Krauss is a Chicago area tech writer and consultant.

 

 ©2006 Marion Consulting Partners