Article in Investor Business Daily about SYSF
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SystemSoft Corp. is a software company driven by engineers. And these days, the engineers are driving it in a new direction. The company's core business has been products for notebook computers. Its software makes it easier to use credit card-sized devices, called PC Cards, that plug into computer slots. And it helps notebook systems consume less power.
Now SystemSoft is targeting desktop machines. Its newest software helps identify and fix glitches in personal computers. That cuts down on technical support that computer makers must provide over the phone.
SystemSoft already has garnered customer commitments of $30 million to $40 million for the new software, which will be available in PCs starting late this year.
Spotting the next big wave takes some business acumen. But it also helps to be an industry insider.
Becoming an insider, though, involves more than just knocking on doors. A track record comes in handy.
''The strength of this company is the engineer-to-engineer relationship,'' said Robert Angelo, CEO and president of SystemSoft, which he founded in 1990. ''When our engineers work with customers trying to make ship dates, and you're locked in rooms for eight, 10, 12 weeks at a time, it builds an incredible bond.''
SystemSoft has strong ties to several big names in the computer industry - including Intel Corp., Microsoft Corp. and Digital Equipment Corp. Intel, in fact, owns a 9% stake in SystemSoft.
As a result, SystemSoft is privy to Intel's technology roadmap. It was in front of the pack on the Universal Serial Bus, Intel's new standard for connecting peripherals to PCs. Microsoft is sharing more information, too, Angelo said.
By getting a peek into early product designs, SystemSoft can fine-tune its software. ''We're always seeing computers much earlier than the world gets to see them,'' Angelo said. ''We see hardware from OEMs from all over the world that people won't get to see in stores for another 1 1/2 to 2 years.''
SystemSoft gets royalties as well as licensing fees for its software. Most of its customers are original equipment manufacturers. Its software usually is pre-loaded into notebook computers or desktop systems when they are sold.
More than 50 PC card makers also have licensed SystemSoft's software, which enables notebook computer users to plug in their devices safely.
Most top-tier notebook computer makers are also SystemSoft's customers. They include Compaq Computer Corp., Toshiba Corp., Apple Computer Inc., NEC Corp. and International Business Machines Corp.
Good customer rapport is having an effect on SystemSoft's sales. Revenue increased 57% to $24.6 million in fiscal 1996, ended Jan. 31, from $15.6 million.
Angelo said he expects the company to rack up from $38 million to $41 million in sales this year.
The future could even be brighter. Founded in 1990, SystemSoft is broadening its available market from notebook computers to the desktop through the new SystemWizard software.
''We've been growing the company anywhere between 55% and 60% since we founded the company. Next year we anticipate a doubling of the company, which is more than 100% growth. We should end up in the $90 million-plus range,'' Angelo said.
Intel and DEC funded the development of SystemWizard, which detects and helps diagnose problems in PCs. The problems could be related to printing documents, making modems work or adding new peripherals like a CD-ROM drive.
PC makers are expected to pre-load SystemWizard on machines because it reduces technical support staffs' workload. In addition to DEC, AST Research Inc., Wang Laboratories Inc. and IBM's Lotus Development Corp. plan to use SystemWizard.
The per- unit cost of the software averages about $5. SystemSoft has commitments for more than eight million units. Intel will receive a ''small'' royalty, Angelo said.
The company went public in August, 1994 with shares priced at $5.50. The IPO raised about $12 million.
For the first quarter ended April 30, earnings rose 83% to 11 cents from six cents a year earlier. Net income climbed 98% to $1.3 million from $646,000. Revenue increased 55% to $8.1 million from $5.18 million. The stock, priced near 45, trades as SYSF.
Transmitted: 7/25/96 1:02 AM |
