56. dairyland, part 1

“H.I.S.-tory” by Vince Ciotti

© 2011 H.I.S. Professionals, LLC

Episode # 56:

DairylandPart 1

The Mini Revolution• So first, put your mind back in the 80s,

when shared systems were dominant:– McAuto’s “HFC” ruled in # of clients– SMS had the largest annual revenue– GE’s “Medinet” was still strong– Tymshare was growing rapidly…

• But mainly in larger bed sizes (100+)

• Smaller hospitals under 100 beds, many of which were in rural settings, could barely afford the next “big thing” then:

• Minis, running on hardware from DEC, DG, IBM, Four Phase, HP, TI, etc.

• With software such as HBO’s MedPro, McAuto’s HDC, SMS’ ACTIon, etc.

What’s a Small, Rural Hospital to Do?• Most of these large vendors concentrated

on where the large money was found:

– Large hospitals over 100 beds in size,• Avoiding rural areas like the upper Midwest,

where agriculture still ruled, and a 100 bed hospital was big; most were under 25 beds!

• Only a handful of vendors started their business catering to small hospitals by design, such as these two early mini pioneers covered in previous episodes:• JS Data – John Sacco’s Rhode Island

mini vendor that ran on IBM Sys 34/36/38.

• AR/Mediquest – Andy & Roger’s mini-based system that also on IBM’s Sys 34

Our Next H.I.S.-tory Hero• Enter another classic American entrepreneur: Steve Klick,

whose background was surprisingly not DP (“IT” then), but rather:– US Army where he served with the 25th in Cu Chi & Vung Tao.– Post ‘Nam, Steve punched cards for the local draft board,– Eventually becoming a DP auditor for a Fortune 500 firm.

• In 1980, he decided to start a DP firm in his own home town: – Sauk Centre, which is located next to “nowhere” Minnesota – (check it out on MapQuest: you’ll see what I mean…)

• The main (only?) business up there was agriculture, so Steve asked his attorney to help him pick a name for a new business in this “Dairy Place” and they came up with “Dairyland,” which was the name for many local businesses.

Let’s Debunk the First Myth…• The full name for the firm was Dairyland Computers & Consulting

which reflected his initial goal to target 3 market opportunities:1. Consulting to small businesses on the new world of computers2. Software, such as Payroll systems every small business needs3. Nursing Home Systems, an early niche no one else was filling

• It turned out, the first objective didn’t pan out at all: farmers just weren’t buying “consulting” so Dairyland never did agribusiness!

• But the other 2 were hot, so Steve was off to nearby Glenwood:

• Glacial Ridge Hospital needed a payroll system which Steve agreed to provide.

• However, he wasn’t a programmer, so he ran ads for one and an ex-hippie showed up for an interview named Mark Middendorf, and Steve hired him.

Ever Hear of “CADOL!?”• So what language would Mark write the payroll system in, and

what hardware would it run on? Remember, back then those two questions were inextricably linked: RPG = IBM, VMS = DEC, etc.

• Steve found a payroll system available in object code only; he negotiated a $500 deal for the source code from an odd firm:

• C.A.D.O. – strange name to us now, but back then, so were Four Phase, Microdata, et al!

• CADO systems was another 70’s start-up firm formed by ex-McDonnell-Douglas Information System (irony?) engineers in Torrance, CA.

• Their programming language was called CADOL (a COBOL pun?), and it was basically a high-level Basic system with 128 characters per record, 128 programs per library, 128 files per directory, etc.

• To quote Steve: “Everything happened by mistake, nothing was planned…” Sure sounds familiar to we user “victims” today, huh?

What Happened to CADO?• Glad you asked! They were acquired by Contel

Business Systems in 1983, and concentrated on vertical markets and small businesses systems:– Finance (General Ledger, Accounts Receivable…)– Wholesale distribution (Inventory, Point of Sales…)– Travel (Ticketing, Passenger Management)– Medical (Billing, Patient Records)

• Contel later merged with NDS to form VERSYSS

• Well, not that VERSYS, nor quite as fast! First systems built were the 8080 "/1"

systems with 3K of memory, an 8 inch floppy drive & 1 serial port for 1 user

The later “CAT” line in 1981 had an integrated CRT and actually looked like a MAC 20 years ahead of it time!

Dairyland’s Rapid Growth• With Steve selling and Mark heading up development, Dairyland

wrote a dozen software packages and sold them to scores of rural hospitals throughout the upper Midwest, including:– Holy Trinity Hospital – in Graceville, Minnesota, where Sister

Paula ran operations (called “Administrators” back then)– Lakeview Hospital – in Two Harbors, Minnesota, where Jerry

Marks was the Administrator (still friends with Steve today!)• Jerry Marks was CEO at Glacial Ridge - still with Dairyland today!

• Dairyland’s corporate “culture” was extremely client-centric – according to Mark, Steve always did what was right for the clients. He kept close to them on a personal as well as business level, something only a small firm can do:

Fertile Ground…• In time, Steve grew stretched

selling and running the company, so he turned to Mark Middendorf to head up sales & marketing next– That’s a shocker: anyone ever

hear of any other sales rep who started as a programmer?

– And was then promoted to be VP of Sales & Marketing!?

• Mark did so well that by 1985, Dairyland had 52 customers in 4 midwest states, most running the 12 financial packages he wrote.

• Dairyland soon outgrew its Sauk Center office space, and moved to nearby Glenwood, Minn., where the firm is based to this very day.

So What’s Steve Up To Today?• He’s still working 60 hours a week at:• Klick Foundation, Klick Consulting,

and Healthcare Anytime• Which I’m sure is no surprise to his

old friends (clients or employees). Give him a call or send him an email:steve.klick@healthcareanytime.com612/743-7095

• Next week we’ll continue the story of Dairyland as it grew into a larger firm,

• Acquiring other vendors/systems, and• Eventually being acquired, re-named…, • Tune in next week for all the details!