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Spcial thanks to IBD Online for the following article:
VISIO CORP. Seattle, Washington
Software Simplifying Computer Drawing
Date: 2/6/97
Author: Robin M. Grugal
Jeremy Jaech and his colleagues are drawing on new markets again.
The same engineering team that brought you PageMaker, the standard in
desktop publishing, is now on its third version of Visio drawing and
diagramming software. They call this round Visio Professional.
Jaech, who is Visio Corp.'s chief executive, and two of PageMaker's other
creators set out in 1990 to change the way businesses draw and make
diagrams. They developed a unique drag- and-drop approach that's fast
becoming the industry standard.
Now the goal is to build on their brand-name base through product
extensions like Visio Professional and global marketing.
Peter Rogers, an analyst at Bear, Stearns & Co., has confidence in Visio
Corp.'s direction. ''This team has created markets before, and they've
managed high-growth situations,'' he said. ''I would say that Visio is the
most promising new company we've seen in software in a long time.''
Visio's core product, launched in 1992, is as broad as it can be, Jaech
says. It's well-suited for drawing flow charts, block diagrams,
organizational charts, maps and network diagrams. The whole idea was to
simplify computer drawing - taking it out of the art and drafting
departments and to desktops of users throughout a business.
''Even today, most people who prepare drawings in business sketch them
out and send them to the art department for publishing,'' Rogers said.
To create a drawing or diagram with Visio, the user selects and drags
pre-drawn shapes from task-specific templates and drops them into place
on a page. For an office layout, the shapes of choice might include walls,
doors, desks, chairs, computers or even potted plants. Easy-to-use tools
help the user manipulate these shapes, connect them with flow lines, and
add boxes and text to the page.
''Visio isn't a new version of an old approach - it's a whole new approach,''
Rogers said. ''And this new approach has it bringing in entirely new sets of
users.''
But Visio's core product is too shallow for the special needs of engineers
and other technical people, though many were trying to use it. There lies a
great opportunity for Visio. ''They are shifting up the market with
higher-end products that sell at higher price points,'' Rogers said.
All it takes to come out with a new product, Jaech said, is to add
specialized problem-solving content to the same drawing engine used in the
core Visio product.
With its first specialty product launched in '95, Visio Technical, the
company added AutoCAD features. That resulted in a product suited for
network, circuit board and software diagramming, as well as chemical,
electrical and mechanical engineering. The product carries a street price of
$249, compared to $149 for the core Visio.
Visio Professional, launched early last month, includes content that gives
information technology pros the ability to visualize, align and manage their
firm's information systems. It's good for network documentation and
management, Internet-intranet mapping, database design and data flow
analysis. It sells for $299.
''We are going after all of the drawing and diagramming performed in
business,'' Jaech said. ''We've got the proverbial shopping bag out, and
we're trying to fill it.''
These days, Visio competes a little bit with everyone, Rogers said. One
slice of the business competes with PowerPoint from Microsoft Corp..
Another with CorelDraw, Adobe AutoCAD in the technical arena, and
Micrographx's Flowcharter.
''Most of the products in the market are dying off because of broader
programs like ours,'' Jaech said. ''We are squeezing them out.''
Visio has far from exhausted the market opportunities for its core Visio
product. For one thing, it still has foreign sales to consider.
Geographic expansion has become Visio's second big growth driver. The
company entered Europe in 1994 and Asia in 1995. Now, its products are
available in nine languages and in 35 countries. New language versions of
Visio Professional are expected to be shipped this quarter.
Channel expansion is its third and final avenue for growth. Like most
software companies competing at this price point, Visio started out by
selling its products though retailers and mail order firms. Then, as users
started talking up the software, corporate buying took hold.
Most companies stop there, said Jaech, but Visio continued on by going
after enterprise-wide volume licensing agreements. ''Right now, licensing is
the most rapidly growing channel,'' he said.
Hewlett Packard Co. signed a license agreement last summer to roll out
Visio to 85,000 of their people. And in October, Chevron Corp. signed a
license agreement for 23,000 copies.
In the first quarter ended Dec. 31, Visio earned $4.4 million, up 111%
over $2.1 million the year before. On a per-share basis, the gain was 93%
from 15 cents to 29 cents on 11% more shares outstanding. Revenue rose
42% to $19 million. The stock, priced near 52, trades by VSIO.
Rogers expects to see earnings total $1.30 a share in fiscal 1997, up 71%
over the prior year, on sales of $92 million, and $2.00 a share in fiscal
1998 on $140 million in sales.
(C) Copyright 1997 Investors Business Daily, Inc.
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