MICHIGAN ECONOMIC DE VELOPMENT CORPORATION
INFORMATION TECHNOLOGY CASE STUDY PROFILE
ARETECH INFORMATION SYSTEMS
THE UTILITY OF IT: IT’S NOW APPLICABLE TO USE THOSE WORDS ALL IN ONE
SENTENCE. Aretech (r’-eh-tek) is a product of a Michigan utility company’s Y2K bug solution. They took
their technology commercial, offering many IT solutions to businesses and individuals.
THE NEED: REAL
As a 50-year-old Michigan-based natural gas company with nearly 367,000 customers, some as far away as
Alaska, SEMCO ENERGY took Y2K seriously. It established the in-house technical team it took to ensure a
smooth transition to the new millennium. With a plan to grow through acquisitions, SEMCO found it was a
challenge to manage new IT systems and integrate newly acquired companies while at the same time maintaining
quality service. SEMCO had to decide whether to create a new business entity or outsource for the service. On
one hand, outsourcing would mean losing talented staff. But with a pool of over 536,000 high-tech employees
in Michigan to draw from, company officials concluded they would be able to fi nd any additional talent they
needed right in their own backyard. They decided to create a new company, Aretech.
THE ANSWER: SMART
Aretech, the brainchild of SEMCO’s senior vice president, CIO and IT veteran, Rudolfo Cifolelli, launched in
April 2000 as a wholly owned subsidiary. It would serve other companies that found themselves facing the
same outsourcing dilemma, allowing them to continue to put energy into their core revenue-generating business
while Aretech took care of their IT needs.
THE MISSION: POSSIBLE
ISP, ASP, B2B, B2C ...Aretech clearly offers a wide range of IT business solutions: Internet access; providing rentable
software over the Internet that is managed by Aretech; storing and managing client software on Aretech’s servers
that can be accessed via the Internet; and the creation of a supplier exchange. These solutions support the core
business of many companies across many industries in Michigan and elsewhere that require a mid-range computer
platform such as the IBM AS/400.
NOW: ON TARGET
Aretech is another example of a Michigan company building a profitable business venture based on the Internet.
It provides high quality services using local IT talent and is looking to expand its offices to house at least 15 more
employees. Located in a $2.5 million facility in Marysville, near SEMCO in Port Huron, Aretech now employs
45, 38 of whom are local programmers, LAN & WAN network administrators, technical support and managers
of click and pay (online bill pay). Besides SEMCO, Aretech clients include St. Clair Community College, Metaldyne
and Davis Industries, both in Plymouth, with a few others in the pipeline, so to speak.
LOOKING FORWARD: POSITIVE
Capitalizing on the accelerating outsourcing trend for IT services, and the proven entrepreneurial record of its
management, Aretech projects that current revenues of $10 million will grow to $100 million over the next 5
years. Given an existing customer base in the mother company, the right telecommunications infrastructure in
Michigan, high-tech talent and equipment, not to mention the demand for their services, Aretech is primed to
reach its projections.
INFORMATION TECHNOLOGY IN MICHIGAN: THE MESSAGE
SEMCO is a utility company that didn’t even blink about Michigan’s capacity to support their new high-tech
business venture, proof positive that information technology is a growing piece of every industry, everywhere.
If you ask Cifolelli, he’ll tell you why Michigan is a great location for Aretech: “There is a lot of untapped high-tech
talent here and it has a big economy to provide services to. I love living and working in Michigan.” He drives
home the point that Michigan’s economy remains stable: it has the talent, the business climate and infrastructure
that secured their decision to create high-tech Aretech.
And, a year later, it’s off to a great start.
Aretech is just one of many successful high-tech companies in Michigan. The state’s economy is thriving and there are many benefits that make Michigan an attractive location. The Michigan Economic Development Corporation is a catalyst for creating
a business climate in which high-tech businesses can flourish. MEDC delivers products and services to promote economic growth,
target high-tech business sectors and tailors services to meet the needs of individual companies and reflect community diversity.
Whether it’s assistance for start-ups, the promotion of high-tech clustering or workforce development support, Michigan is a
great place for high-tech businesses.
This communication contains forward-looking statements that involve risks and uncertainties, including but not limited to, operating expenses, operating
income, returns on invested assets, regulatory approval processes, success in obtaining new business and other risks detailed from time to time in SEMCO’s
Securities and Exchange Commission fi lings.
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