Chapter 1 of OTG Software's story goes something like this: After co-founding two companies in the area in less than a decade, a man decides to go for a third, so with his own money he starts a small technology operation in Bethesda.
The tale has now reached Chapter 2: The company is established and has made a profit in four of its six fiscal years of existence, although being privately held it does not disclose earnings. It may not have glamour and a mass-market name, but it has found a nicely defined niche in a specialized field of office software and is working hard to expand it.
The man is 42-year-old chief executive Richard Kay. He sums up the the OTG saga so far as "a diamond in the rough, and just now beginning to polish ourselves."
In its first year, the company racked up $1.4 million in sales and had 15 employees. Now, occupying two floors of a 10-story building in Democracy Plaza, it's creeping near $20 million of annual revenue and is a workplace for 160 people. That kind of growth last year put it at No. 371 of Inc. magazine's 500 fastest-growing private companies in America.
Plush carpeting in its offices leads into what could be described as a "playpen," where Kay and Vice President William Caple work with their office doors open. Rather than reach for a phone or walk a few steps, they shout questions and comments to each other.
"Our three requirements are to work, play and take care of our families," Kay said. "The order switches all the time."
OTG -- Online Technologies Group -- works in the complex field of data storage and document management software. The company's core product is called DiskXtender, which can manage information on all of a company's removable storage systems under one, homogeneous file system.
The company has assembled a collection of blue-blooded customers: Microsoft Corp., Hewlett-Packard Co., Eastman Kodak Co. and Fujitsu Ltd. Its customer base also includes AT&T Corp., Merrill Lynch & Co., Chase Manhattan Corp. and the brokerage firm Legg Mason Inc.
Legg Mason, for example, handles 70,000 pages of data a day, but with the DiskXtender, it's able to "almost come up with a paperless environment," Caple said.
The product allows a user to access all of a company's data in one managed electronic area. "A person can have access to data and gain that access any time, anywhere and whenever it's needed," Kay said. "We believed that real market growth would take off with people who would want to be able to retrieve data without going offline."
Barry Salter, project manager at Baltimore-based Legg Mason, said the product has helped "digitize" the company's work environment. "This was the best thing with the most compatibility," he said. "It had the combination we needed to make our system better."
Doug Schmidt, managing director and co-chief of the information technology sector of Legg Mason, believes OTG is well on its way to getting bigger.
The company "has all the key characteristics for success," he said. "A lot of young companies today begin with smart guys and good ideas but not so much practical experience between them, and OTG has all of that."
Kay said that "this is not a one-man show by any means. It was in the beginning, but not now. There are 160 employees, and they're the reasons why."
He started the company with his own funds, but last year took in a total of $10 million in venture capital from ABS Ventures of Baltimore and Greylock of Boston. His previous ventures were National Operator Services Inc., providing telephone operator services, and long-distance company NOS Communications Inc.
Mitch Selbiger, OTG's vice president for marketing, said the key to expanding further rests in marketing tactics -- to "appeal to the masses in a way we haven't done before."
At present, the company is struggling, as all private companies do at one time or another, with a decision on whether to go public, Selbiger said. The recent addition of chief financial officer Ron Kaiser, who has been hailed as an IPO machine, suggests that OTG may terminate its private status. Since 1982, Kaiser has raised more than $400 million for six companies, five of which he led to the public arena.
Caple said: "A lot of people are tempted to go public because of the public dollar, but we've been able to be successful on our own, without having to do that." Many Wall Street analysts are already following the company, even though it's not publicly traded. On whether that status will change, "nothing's been decided yet," Caple said.
Either way, "going public is not the end of the story for us. It may or it may not happen," Kay said. "But if it does, it will be just Chapter 3 in the remaining chapters of our saga."
A Look at ...
OTG Software (Online Technologies Group)
Founded: 1992 by Richard Kay, chief executive
Products: Data storage and document management software for Windows NT
Number of employees: 160
Revenue: $19 million (1998)
Motto: "Digitize your environment."