Hudson-based Procentive pioneered software as a service

It seems everyone is going to the cloud nowadays. But Hudson-based Procentive was a pioneer in offering software as a service.

Now the company founded by Randy Zimmermann and Jeff Burton has a new 6,300-square-foot building in St. Croix Business Park East, bringing it some well-deserved attention.

Procentive provides what Zimmermann, the company president and CEO, calls a "practice management software suite" for providers in the behavioral health industry -- counseling offices, mental health clinics, drug and alcohol treatment centers, and some county programs.

Instead of buying expensive management software, the provider leases the web-based Procentive product on a monthly basis for its record-keeping.

A stand-alone spin-off company named Billcare does the billing for small offices that don't want to pay for a full-time biller on staff.

"To the best of my knowledge, nobody else was delivering the product the way we did eight, nine years ago, when we really got into this," said Zimmermann.

Now, a lot of companies are going to the software-as-a-service model, giving Procentive new competition.

"The business we're really in is customer service," Zimmermann said. It's listening well when customers call about a problem and providing a solution.

"If we do that well, they'll always love our software," he said.

Zimmermann isn't taking credit for coining the term cloud to describe the use of software accessed through the Internet and the storage of data on remote servers. But that's how he described the model to potential clients when Procentive was getting started in 1999.

"I'm not surprised that it is now the buzzword," he said. "That's what we've been doing. We were doing the cloud before it was ever called the cloud."

The start

The founding of Procentive is a story in itself, with Faith Community Church playing a central role.

Zimmermann and Burton met in a Sunday school class at the Hudson church in the mid-1990s.

Burton, 48, a town of St. Joseph native and Hudson High School graduate, owned a couple of software businesses at the time. He sold one of them to a Silicon Valley, Calif., company and went there, along with his family, to work for a year and a half.

Upon returning to the Hudson area in the late '90s, Burton told Zimmermann he was looking for the next thing to do.

Zimmermann, meanwhile, had had a talk with Steve Gray, founder of Family Innovations, about the problem Gray was having finding a good management software for his counseling clinics. Gray, too, attends Faith Community Church.

In a conversation at Hudson Wendy's restaurant in November of 1998, Zimmermann scratched out his ideas for Procentive on a napkin, and Burton said he was in.

Family Innovations was their first client, and remains one.

"He's customer No. 1," Zimmermann said of Gray. "Steve really helped us found this thing and has played a big role in the whole product."

Zimmermann, a youthful-looking 50, grew up in Cottage Grove, Minn. He has degrees from Moody Bible Institute in Chicago and Bethel College (now University) in St. Paul.

He and his wife, Sheri, reside in Afton and have two sons and two adopted daughters. He worked in medical sales before starting Procentive.

Burton, the company's head of technology, is the son of Jim and Ruth Burton, who now reside in New Richmond. St. Joseph Fire Chief Ron Burton is his uncle.

A 1983 graduate of Hudson High, Burton began working with computers when the math department at the old Hudson Junior High acquired one.

"I would stay after school every night and taught myself programming there," he said.

While still in high school, Jim Richardson, the late president of Nor-Lake Inc., gave him a job doing programming for the refrigeration company.

"That was great. That was my first software job, and I learned a lot there," Burton said.

He attended Rice University in Houston after high school, but didn't major in programming there.

"I've learned along the way. I kind of picked it up on the job," he said.

Burton and his wife, Lisa, have a home near Boardman. They have five school-age sons: Isaac, Aaron, Noah, Adam and James.

The staff

Procentive currently has 22 people on staff, some working full-time and some part-time. Part of the staff, especially salespeople and software developers, is able to work from home.

Zimmermann said the training staff tend to be teachers or people who majored in education in college.

"Why? Because they are used to standing up in front of a classroom and educating," he said.

Customer staff members are either brought to the Procentive training center to learn the software or trainers go to the client's site.

"We've grown very methodically, because it does take a fair amount of work to train in customers," Zimmermann said.

He said the company now has well over 100 customers in the five-state region including Wisconsin, Minnesota, Iowa and the Dakotas, plus other customers scattered throughout the country.

A third spin-off company, Tevera, will provide services for faith-based and charitable organizations that might not be able to afford Procentive's services.

Procentive and Billcare are growing. Zimmermann said two more additions to the building are planned, which will give it a horseshoe shape when it is completed.

"The rate we're going right now, if God continues to bless, we may be kicking off the next phase here in a year or so," Zimmermann said.