After success with school product, Skyward pushes into local government arena

It’s been more than a decade since Skyward listed local governments as major customers, but the company has quietly launched a new product to get back into that market.

It’s part of a continued expansion for the Stevens Point company, whose platform for schools lets them enter student records and fulfill administrative needs. And it comes almost three years after Skyward threatened to leave Wisconsin over a multimillion-dollar contract dispute.

At the time, Skyward said the state had erred in picking a Minnesota company, Infinite Campus, for a statewide student information system. Lawmakers resolved the issue with a budget item that ensured schools could choose from multiple vendors.

Skyward now works with 405 of the 424 school districts in Wisconsin and is the preferred provider in four states, including Texas.

Skyward also made news for accepting an offer of tax credits from WEDC, conditional on Skyward winning that single-vendor bid. WEDC ended up rescinding that offer. But WEDC has since approved roughly $3 million in tax credits for Skyward, pending its creation of 510 jobs and a $22.75 million capital investment into its new headquarters, to be ready in March.

The new headquarters at the Portage County Business Park will consolidate Skyward’s two Stevens Point locations. Skyward is also planning to add more than 100 positions over the next year to its current total of 510 employees.

Some of those employees will work on developing and marketing Skyward’s new product, which takes many of the HR and procurement services in its K-12 product and adapts them to local governments.

“It really helps the municipalities manage their costs better because they know they have a solution that’s going to meet their needs,” said Ray Ackerlund, Skyward’s vice president of sales and marketing.

So far, five local governments in Tennessee are using the product, but Skyward is looking to add more customers across the nation as it begins promoting its product next year. The company will target small and mid-size municipalities first, highlighting the success of its K-12 product, Ackerlund said.

Yet Skyward will have to be “very aggressive” in those outreach efforts to capture a sizeable chunk of the market, said Jonathan Reichental, the chief information officer at the city of Palo Alto who’s gotten national recognition for his work.

Reichental said Skyward’s experience in the K-12 market should help, as there’s significant overlap, but it also faces more established competitors in the municipal market. It will also need to convince customers that don’t necessarily want an innovative product, but rather want a product to “just work and be reliable.”

“A year into this, you could have major regrets, and then it’s too late,” Reichental said.

But there’s “room for more competitors” in the industry, Reichental said, especially if Skyward continues to focus on developing cloud-based solutions that are easily accessible on mobile devices.

“The market is big,” he said. “There’s tens of thousands of public agencies across the United States who need this functionality.”

That market is even larger in the smaller municipalities that are “very poorly served,” he added. One example: Tennessee’s Hamblen County, which switched to Skyward after its Tennessee-based software provider was acquired, said the county’s IT manager, Jeff Atkins.

Skyward’s product, Atkins said, is a major improvement from the outdated service the county had earlier, which wasn’t able to work with databases. Now, Hamblen County is running customized reports through Skyward’s software and Excel to help with its HR and procurement work.

The county chose Skyward over perhaps the largest player in the market, Tyler Technologies, a roughly $14 billion company based in Plano, Texas. And it did so not just because of Skyward’s lower price, Atkins said, but because the county would be able to work closely with Skyward to develop the product.

“Being a county government, we are always tight on funds,” Atkins said. “But we also felt like we would be able to partner with Skyward in a way that we would not be able to with Tyler Technologies, [where] we’d be such a small fish in their pond.”

The technology is far from complete, although Atkins said he’s confident Skyward will continue to be “extremely responsive” as the company looks to add new functionalities.

In the future, Skyward will also target larger municipalities with tools such as tax and utility billing services, and company officials feel “really good” about how its product will stack up against some of the top players in the field, Skyward’s Ackerlund said. And Skyward isn’t ruling out adding more products if the municipality vertical takes off.

“Adding this vertical really opens up a lot more opportunities for us,” Ackerlund said. “We want to expand and develop that product to make it as rich as possible to meet those needs. Once we get past that, I’m sure we’ll be looking for other verticals we can continue to grow into.”

— By Polo Rocha