Hanifen Vice President Looks Toward Linux Possibilities

 

Reprinted from Software Business Magazine
January 2000

What kind of growth should be expected of software companies in today’s environment?

Whatever growth expectations you have for your company, they should be high. The Internet is growing at 70 percent and eCommerce is growing 120 percent annually. These are the benchmarks by which the finance and strategic community will be making their investment decisions. A software company growing at less than 40 percent (with under $10 million revenue) or one growing at less than 25 percent (with between $10MM and $20MM revenue) is not likely to be of great interest to the investment or acquisition market.

What are the trends and technologies that will affect the industry in the millennium?

Anything that helps personalize the web, make it more programmable and enable access of applications from it. This would include technologies that enable companies to capture corporate memory along with those companies that can deliver services over the net or combine services with the products and the appliances. End users want a total solution, not just hardware and software. Any product could be buried into a service and delivered via the web. Other trends include: phone convergence/voice over IP, Internet appliances, customer relationship management, touch screen everything, wireless Internet access and total networking for home PCs.

What are the critical objectives for software executives today?

One critical objective should be to grow the business as fast as possible – even at the expense of profitability. The financial and strategic markets want to see growth over 50 percent. While cash flow is nice, the government robs 40 percent of it from you and your growing business every year. Your are better off paying a one-time tax of 20 percent capital gains upon sale or exit versus annual payments of 40 percent. Also, fast growth enhances your lead-time over competitors and keeps them out of your space. Another objective should be to Internet enable all your applications and/or make them deliverable for a monthly fee over the web.

What are the partnering and new platform opportunities for the mid-sized software companies?

Windows NT remains the most viable platform for small-to medium-sized software companies, but watch out for Linux. In one year they have moved from the basement of the Sands Hotel at Comdex to a private ballroom of their own at the Hilton. In addition, you have Red Hat Software trading 400x revenues. Over and above the hype, major software companies are now publishing on this platform including Corel, Caldera and Computer Associates.

Who are some of the leading software companies that will change and grow the industry?

Microsoft will continue to play a dominant role in the industry, but companies specializing in B2B eCommerce, those with new business models that leverage the ubiquity of the web and commercial Linux developers will lead the way.

Insight From Robert Gettinger D E A LS Reprinted from September 2000 issue of Software Business Magazine © Webcom Communications Corp., 7355 E. Orchard Road, Suite 100, Greenwood Village, CO 80111, U.S.A, Phone 720-528-3770