SevOne: Firm with UD roots is growing back home

SevOne CEO Jack Sweeney has overseen a doubling of employees during his year and a half with the company. Comprised of many University of Delaware graduates, the company will be moving to UD’s STAR campus.(Photo: DANIEL SATO/THE NEWS JOURNAL)

It made perfect sense to see a group of network specialists spending their lunch hour playing a video game as they sat in a glassed-off corner of SevOne’s 3rd-floor office in Pike Creek Valley Thursday.

After all, it was two friends’ mutual love of video games, and a conversation about data flow following a gaming session nearly a decade ago, that launched the Delaware-based firm, where employees spend most of their time helping firms predictively spot Internet bottlenecks that can slow down everything from playing games or watching Netflix to a stock exchange’s ability to handle trades.

Nine years after University of Delaware graduates Vess Bakalov and Jim Young had that conversation, SevOne is headed back to where it started and where much of its workforce graduated. On Dec. 12, the rapidly growing firm signed a 13-year lease for 50,000 square feet of space at UD’s growing Science, Technology and Advanced Research Campus, or STAR.

While one might assume the move is rooted in sentiment, officials say that’s not the case. “We’re outgrowing it,” Jack Sweeney, SevOne’s president and chief executive officer, said of the firm’s office space on New Linden Hill Road. “And it’s time to move.”

The network management company also has offices in Philadelphia and Boston, but close to half of its 402 employees worldwide work in Delaware. Eight months ago, the current Delaware total of 172 stood at a bit more than 100, according to Mike Shanahan, SevOne’s chief financial officer. Growth over the past 18 months has totaled 120 employees, he said.

“So, our growth has been very dramatic here,” he said.

More than 100 of SevOne’s employees are Delaware residents. It draws 70 percent of its interns from UD – 20 currently, but that’ll bump up to about 50 this spring, Shanahan said.

Growth isn’t the sole reason for the move; Shanahan said the Linden Hill area has seen four power outages in the past six months. The company has a “data farm” in the lower levels of its current building, where it maintains data for its operations as well as some of its clients. The company’s current backup power system is only adequate to perform what Sweeney called an “organized shutdown.”

“That’s not acceptable,” Sweeney said.

Talk about moving the data center to a more “tech-friendly” location morphed into a Realtor’s suggestion that they look at STAR.

They liked the more modern infrastructure. They liked having Bloom Energy, which opened a manufacturing center on STAR in 2013, as a neighbor. “We’re talking about” using “Bloom Boxes” – the company’s solid oxide fuel cells – for backup power, Shanahan said.

The opportunity to co-design the spaces to best enable the free-flowing exchange of ideas the firm encourages was also a draw. The firm wants workers to be able to grab something to eat without going far, for instance.

“If you think about what Google does,” Sweeney said. “Google doesn’t let you off their campus. You can go work out, you can go meditate, you can go take yoga classes, you can have a healthy lunch, you can have a cheeseburger – they don’t want you to leave. Right? They want you to stay.” SevOne wants to create the same sort of work environment, he said.

“We’re trying to bring a little bit of Silicon Valley here,” Shanahan said.

“Work hard, play hard,” added Sweeney.

STAR is a work in progress. The west side of the two buildings now erected is a rough-looking construction zone, Shanahan said. But, he said, “We could see it. We really see this as the ground floor of an opportunity for Delaware, and for the company to be part of that.”

Still, Sweeney admits he’s a bit of a romantic about the firm coming full circle.

“For me, to go onto the University of Delaware campus seemed so fitting, and so right, for the people that work here,” said Sweeney.

Vess Bakalov, now the firm’s chief technology officer, and his wife Tanya, SevOne’s chief of staff (and also a 2005 co-founder, along with several other UD grads), might have had something to say about that – they met at UD – but weren’t available to talk last week, as their second child was born recently, Sweeney said.

The company won’t leave Linden Hill entirely – it wants the extra room to accommodate growth, and still has a lease to honor, Shanahan noted.

Consumers made far fewer demands on the Internet as it came into popular use in the 1990s. Video downloads, for example, were practically nonexistent. There were network monitoring and management services that could search for and find blockages, as SevOne can do. But these, Sweeney said, “were built for the 90s. The world has changed dramatically.”

The sheer number of devices around the world that now access the Internet, the vast amounts of data being transmitted and the web applications needed to send or receive it are swamping the system, he said. Cisco Internet Business Solutions Group predicts that next year, there will be 25 billion devices connected to the Internet and by 2020, 50 billion devices.

On Aug. 22, 2013, NASDAQ’s computers shut down for three hours, the result of a technical glitch. “They never saw it coming,” Sweeney said. “Now they do. They bought some new tools.” Those belong to SevOne.

“We can tell you when it’s going to happen, before it happens,” Sweeney said. “Predictive.”

SevOne doesn’t fix the problems. It identifies them. “We’re a ‘tell’ software, not a ‘do’ software,” Sweeney said.

In addition to the NASDAQ, SevOne counts firms such as Verizon, Comcast and HBO among its clients – and others, including device manufacturers, data centers and federal government agencies Sweeney said he was not at liberty to reveal.

“The idea is simple,” Sweeney said. “Making it work is really hard. Really complicated. And that’s … why we’re such a growth company – because we’ve been able to make this concept work. Where we can ingest just infinite amounts of data.”

That means the firm is positioned to provide the same services as the world transitions to the next generation Internet, which will have space for trillions of new web addresses and better support growing demand.

Business is good. SevOne earned more than $39 million in 2013. The 2014 figures have not been finalized, but Shanahan said they expect it to come in “north of $60 million.” The firm remains privately held, with a $150 million of backing from Bain Capital, which invested that amount last year.

SevOne hires “only the best people,” Shanahan said. The jobs pay well – SevOne pays $50,000 per year and up to entry-level technicians, he said.

They’ll certainly love the new facility, which will feature a spacious, team-centered work space, large hammock nets for relaxing breaks, its own kitchen area, and showers – where workers can clean up after the 5 p.m. Friday Ultimate Frisbee matches, which will migrate to UD.

“It’s awesome,” said Matt Dickinson, 27, of Newark, a software architect and 2012 UD graduate who interned at SevOne during his junior year and never left. “It gets us closer to UDairy Creamery, which I’m a big fan of. And having a bigger space, and having our own space is, going to be very nice. … Being right next to and with UD is going to open more opportunities for myself and others. So that’s exciting.”

Dickinson was one of the game players spotted playing the new Super Smash Bros. game behind the glass partition. “We take lunch seriously,” he said with a laugh.

“It’s pretty laid back,” Dickinson said of SevOne’s work atmosphere. “As long as you get your stuff done, nobody really gives people a hard time about what you’re doing.”

Contact William H. McMichael at (302) 324-2812 or bmcmichael@delawareonline.com. On Twitter: @billmcmichael