Information technology bouncing back

Spending expected to grow 6 percent to 8 percent; local firms expanding

The information technology sector, which was hit hard during the technology market decline a few years ago, is starting to see a slight upswing in demand.

The increased activity has caused a number of IT companies to expand in the area.

According to Forrester Research, IT companies with less than 1,000 workers will spend $374 billion on IT equipment, software, service and staffing in 2005, up 8 percent from $346 billion in 2004. Large companies are on track to increase spending by 6 percent this year to $411 billion.

Among those expanding companies is Ironworks, a Richmond, Va., firm that this fall opened an office in Cary to accommodate its increasing customer base in the Carolinas and Georgia.

"We have seen tremendous growth in the last six to 18 months for the consulting services that Ironworks provides," said chief executive Scott Walker.

The company started in 2001 in the middle of the dot-com collapse. It adapted a conservative strategy, opposed to the fast-paced operations of other high-tech firms. For example, it avoided hiring permanent workers unless it planned to keep them long term and instead relied more on partnerships. It now has more than 100 employees. The Cary office has 13 employees and plans to add more Web designers, consultants and project managers as business increases, Walker said.

One of its popular services is its usability study, in which it films people using a company's Web site to observe how well they are able to navigate it and suggest improvements. Walker said that a big part of the company's business comes from expanding or replacing work that was done during the tech boom of the late 1990s.

Robert Albright, spokesman for the Council of Entrepreneurial Development, said that part of the increased demand for information technology comes from more companies incorporating the Internet into their daily operations. "Several CED members have experienced strong growth by serving technology-centered companies that are using the Web and other applications to drive their businesses," Albright said.

Peak 10 responded to its customer growth by announcing that it would build a second data center at its headquarters in Charlotte. Earlier this year, it also expanded its Research Triangle Park site by 30 percent. The company focuses on providing IT services such as data centers and managing data security.

Earlier this year, Arsenal Digital Solutions, which sells services to protect critical data, obtained $15 million in debt funding for its marketing, sales and international expansion. The Cary company has been steadily adding workers for the past couple of years, bring its current total to about 100.

Other companies expanding in the IT market include Hosted Solutions of Cary, which last year opened its third data center and is now in the process of filing 10 positions, which would bring its total to about 45 employees; Lohmueller of Raleigh, which recently landed an IT support contract with Xcelecom Technology Solutions, a $300 million Connecticut company; and StrikeIron, a Web services company in Durham that recently raised $2 million in private funding to further develop its software and expand sales and marketing.