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Owner of IT firm MK2 tieing future to software - June, 2009

Deal for ProSource boosts customizing capabilities

Donald Kasper has big plans for what just became a bigger operation.

The owner of MK2 Technologies LLC of Cleveland has acquired a significant portion, though not a majority, of ProSource Solutions in an effort to beef up the two companies' custom software development efforts.

The two companies now both are housed at MK2's Cleveland headquarters at 4650 State Road, with ProSource paying a fee to MK2 for use of its administrative services. ProSource was based in Solon.

Mr. Kasper, who serves as president of both companies, said he expects MK2 will be aided by the added software development firepower provided by ProSource: MK2 is shifting its focus toward software development after spending its first three years in business concentrating mainly on contracting out IT employees to other firms.

“We'll always do staffing, but our goal is to become really more of a software development company,” Mr. Kasper said.

Mr. Kasper took a big step toward that goal when he and two ProSource officials acquired most of the equity in ProSource and its 25 employees, many of them software developers, under undisclosed terms from IT staffing firm 4TechWork Inc. of Akron. MK2 has 12 developers among its staff of about 50. Most of those 50 are contracted out to other companies.

The two companies, which will operate under their own names but eventually may be combined, will follow MK2's new software development strategy of retaining the intellectual property after developing software for a customer so that the software can be repackaged and sold to others, Mr. Kasper said.

Mr. Kasper admits that negotiations to keep rights to the software may not always be easy, but he said they can succeed. MK2 already has launched two software products in this manner: KidSafe, which is aimed at helping child care centers track when children arrive and leave; and Advantage Zone, a web-based program that allows companies and organizations to give their employees or members access to discounts on various goods and services.

MK2 and ProSource will create new companies for their software products, Mr. Kasper said, noting that MK2 is in the process of forming a limited liability corporation for Advantage Zone.

ProSource also brings with it an advantage in custom software development. The company, which also provides other IT services, is a Microsoft Gold Certified Partner, while MK2 has a lower rank in the Microsoft Partner Program. The label is good for the ProSource brand and allows the company to receive more work opportunities directly from Microsoft, Mr. Kasper said.

“We're pretty interested in what that could mean to us,” he said.

Joining Mr. Kasper as ProSource's primary owners are ProSource director of operations Lowell Messner and ProSource vice president of sales Jeff Welch. A few other individuals own smaller pieces of the company, Mr. Kasper said.

Mr. Messner said he believes the companies will work well together, especially with Mr. Kasper at the helm.

“I've known Don for a while and have always been impressed with his leadership,” Mr. Messner said.

ProSource in 2008 had revenues of between $6 million and $7 million. Mr. Kasper declined to disclose MK2's revenues.

The economy has reduced demand among MK2's customers, particularly on the staffing side of the business, but Mr. Kasper said he expects demand to return quickly as the economy improves because customers will need employees quickly.

“We should see a spike in our business before the others do,” he said.

Chuck Soder