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25 Years: D. Raja Talks About Growing CEI Into a Tech Success

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Interview by Jonathan Kersting, TEQ Associate Publisher [caption id="attachment_2718" align="alignleft" width="248"] D. Raja founded CEI 25 years ago and hasn't looked back since![/caption]

Way back in  1992, Nirvana climbed the charts with “Smells Like Teen Spirit,” the trusty web browser was introduced and D. Raja co-founded what would become one of Pittsburgh’s top technology companies — CEI (Computer Enterprises, Inc.).

Twenty-five years is a lifetime-and-a-half in the tech world, but CEI has found its stride as a top provider of leading-edge technologies like Microsoft .NET, BizTalk, Sharepoint, Azure, iOS, Android, Java and Open Source. Raja guided CEI through the highs and lows of the region’s burgeoning technology industry. He even survived a recession and the infamous bubble that burst so many of his competitors around the world.

The University of Pittsburgh’s Masters in Computer Science program brought Raja to Pittsburgh, but he soon took a job at Lockheed that sent him to Silicon Valley. After spending some time in the California sun, he decided to make Pittsburgh home and came back to co-found CEI in the spare bedroom of his townhouse.

Raja said Pittsburgh gave him the opportunity to be successful and that he wants to do his part to ensure that this opportunity continues to remain for the next generation of Pittsburghers. To mark 25 years in business, TEQ wanted to ask Raja what drove his success, how his management style changed, how Pittsburgh changed and what the region can do better to spawn more success stories like CEI.

So, put on that old flannel shirt and spin up that grunge anthem before you read any further. The story of Raja and CEI will really take you back, but more importantly, it will get you pumped for the future. Here’s what he had to say:

TEQ: Congratulations on 25 years with CEI! Tell us about the company and your inspiration to start/grow it.

Raja: When I was at Lockheed, I saw the enhancements that could be made to improve business performance (along with reduction in errors and risk) with software in lieu of manual processes. However, commercial off-the-shelf software was not available for most industries at that point in time. I had the expertise in building custom software and could see the oncoming demand for such software. Wanting to capitalize on the change, I decided to start a project-based company building custom software.

TEQ: Did you ever think you’d make it to 25 years? Any significant moment stand out along the way?

Raja: In the very beginning, it was purely “blocking and tackling,” i.e., making enough sales and ensuring adequate cash flow to meet payroll. From 1992 to 2001, while we always did software projects, we grew rapidly with IT consulting and this was the main business practice at CEI.

Then comes the crash of 2001 and our clients wanted fixed-fee scope-based project work. At this point, we added a “solutions” business practice at CEI.

Then comes the great recession of 2008, and our clients wanted ongoing “lights-on operations.” They wanted CEI to continue beyond custom application development and wanted us to maintain and manage the software, too. At this point, we added our “managed services” practice at CEI, and this too has grown significantly since then.

CEI has successfully navigated through two significant recessions, and key reasons include having strong business practices, understanding and managing risks and addressing/adapting to adverse conditions. And the credit here goes to the management team and employees of CEI.

TEQ: What’s been the secret to CEI’s longevity?

Raja: The IT industry is constantly changing, and CEI’s value proposition is to “capitalize on change.” Our approach has been to introduce three to six new offerings each year across our business practice areas of Consulting, Solutions and Managed Services. One to two of these offerings will not become mainstream, one to two will be mediocre performers and one to two will become the main revenue drivers in the future. This has been the secret sauce for CEI’s success over the years.

Twenty-five years is a long time to be a company, and I am proud to have been with CEI for the past 25 years. CEI’s management team has many individuals who have been with CEI over 15 years, and there are several employees who have been with CEI over 20 years. The reason for CEI’s longevity is the management team and the employees.

One personal aspect was the change in my management approach over the years. When I started CEI, my management style could be called “autocratic,” since I naively thought that “I knew it all” as a 27-year-old. Over the years, I have learned better and have transformed to a servant style of leadership. My objective today is to support my management team and enable them to succeed. CEI is an entrepreneurial company, and everyone in the management team is entrepreneurial and runs their departments like their own.

TEQ: How has Pittsburgh’s tech sector matured/changed over the last 25 years?

Raja: There have been a number of changes! The accelerator program with IW/Alpha Lab/AlphaLab Gear, Pittsburgh Life Science Greenhouse, etc., is much more mature today. Pitt’s tech transfer policy has changed to better support companies being spun off. In addition to meds and eds, we now have robotics, artificial intelligence and energy segments that are starting to take off. Overall, there has been positive change over the years.

Twenty-five years is a long time to be a company, and I am proud to have been with CEI for the past 25 years.

TEQ: Any thoughts on what can make our ecosystem better and get more people from around the world starting companies in Pittsburgh?

Raja: I have judged and continue to judge a number of entrepreneurial awards such as Carnegie Science Awards, Ernst & Young Entrepreneur of the Year, business idea awards at Pitt, etc., and here are some thoughts on how we can make the ecosystem better:

We have accelerator funds that start the companies in Pittsburgh. However, it appears that some companies choose to move once they reach VC stage. We need to have VC funding happen without the companies moving out of Pittsburgh. More funding (especially at Series A) in Pittsburgh would be helpful.

We already have attracted good companies to locate to Pittsburgh, including Google, Uber, Apple, etc. We need to continue to attract such companies, as they provide a “safety net” for employees working in high tech entrepreneurial companies.

We have great schools in the region like CMU, Pitt, etc., and we need to retain the graduates in our region.

TEQ:  So what’s in the future for CEI? What keeps it fresh and exciting for you?

Raja: The new and exciting frontier for CEI is acquisitions. CEI has been profitable every single year since inception, and this was done without taking a bank loan or a government handout. With the maturing of custom software, we see the opportunity to add new offerings by acquisition and without having to do so organically as we’ve done over the past 25 years. And, more importantly, we have an experienced management team to oversee acquisition(s) and ensure success of the same. Both the management team and I are looking forward to growing the business areas of consulting, solutions and managed services through acquisitions.

Over the past 25 years CEI has had the good fortune to work with dozens of Pittsburgh companies. These customers are of all sizes and industries, from the household names to smaller regional companies providing specific services. We’ve interacted with countless smart, accomplished, interesting people that reinforce how lucky we are to be in Pittsburgh. We’ve done some really cool projects with our local clients, including applications that help save lives, mobile apps that help provide efficiency and clarity to health care companies and helping customers understand and realize the value of the cloud. And we look forward to continuing to do innovative work in Pittsburgh going forward, too.

As we look to the future, we know one thing for certain, especially in the IT industry, and that is change is the only constant. CEI’s employees, management team, and I look forward to harnessing the changes to be successful and being an integral part of the Pittsburgh ecosystem in the future!