Business Journal

Friday, September 12, 2008

Software firm finds its niche behind bars

Minneapolis / St. Paul Business Journal –by Katharine Grayson

Renovo Software Inc., which for years has sold video network-management technology that supports long-distance learning, is making a break for a growing niche market: Prisons that want to better handle inmate visitations.

Tim Eickhoff and Tim Skaja founded Renovo Software five years ago with products that helped schools offer interactive-video learning programs and companies schedule remote meetings. The Edina-based firm landed its first corrections-industry client — Florida’s Orange County Jail — in 2003 through a partnership with an audiovisual hardware provider. During the past 18 months, however, Renovo’s penetration in that market has grown from one client to 18, with deals in Indiana, New Mexico, Virginia and Nobles County, Minn.

Last year, business from correctional facilities generated 10 percent of the company’s revenue. This year, Eickhoff and Skaja expect corrections to make up half.

They don’t disclose exact sales figures, but said revenue ranges between $5 million and $10 million. They expect overall sales to nearly double next year, thanks largely to prisons and jails.

Renovo’s software helps prisons schedule video inmate visitations. Short on staff, prisons are shifting away from traditional visitations, which require guards to check guests for contraband, manage waiting-room crowds and escort prisoners from their cells. Instead, they’re doing them via video.

“Correctional facilities around the country don’t have the budgets and labor to continue to operate the way they used to,” said Eickhoff, who’s co-managing partner of Renovo with Skaja.

The firm’s technology allows corrections customers to schedule visits, which can be conducted from offsite facilities through video networks that connect to an inmate’s cell. Renovo’s software also ensures that meetings follow strict policy guidelines, such as how many visitors can be at a facility at a certain time.

In addition, the technology allows prisons to record — and later easily track down tapes of — visitations as well as manage remote doctors’ visits.

Still, Renovo will encounter some challenges as it expands into the corrections market, said Eickhoff and Skaja, who also is chief technology officer. The firm faces competition from audiovisual equipment companies, though it touts its software and digital capabilities as an advantage over those firms. And overall, the prison market has been slower to invest in technology than other industries, taking a “tin can and rope approach” to visitation, Eickhoff said.

However, that’s quickly changing, said Thomas Herzog, president of the Corrections Technology Association and chief information officer for New York’s Department of Correctional Services.

Video visitation is becoming increasingly important to the industry, and corrections institutions are using similar technology to facilitate everything from court appearances to job interviews. “It’s an emerging issue in lots of states. With the proliferation of broadband networks, we’re seeing more inclination to use video networks.”

To meet demand, Renovo plans to add staff, Skaja said. The firm has 13 employees, but expects its staff to number in the mid-30s by 2011.

Also, while the company has put energy into expanding into the prison market, it expects to maintain a strong presence in the distance-learning area, which has long been its “bread and butter,” Skaja said.

kgrayson@bizjournals.com | (612) 288-2106

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