Orange County has a new top software maker, according to this week’s Business Journal’s list. But it was something of a photo finish.
Irvine-based video game maker Blizzard Entertainment Inc. moved up a couple of spots to take No. 1 this time around by a narrow margin.
Blizzard is estimated to have nudged out Irvine business software maker Sage Software Inc., which has held the top spot for the past few years.
Both companies have yearly sales of about $1 billion, with the nod going to Blizzard at $1.1 billion.
Revenue figures for Blizzard and Sage are estimates for the 12 months through March based on reports from Blizzard’s parent Vivendi SA of France and Sage Group PLC, Sage’s British holding company.
We’re calling them estimates because the Business Journal had to piece together numbers from different reporting periods and convert them using average exchange rates for the period.
We did a lot of number crunching and converting to come up with our figures since it involved a big change at the top of the list.
Sales Breakdown
Blizzard, the largest maker of games played by millions over the Internet, had 2007 sales of $1.2 billion. But Vivendi saw revenue from its games unit fall 24% in the first quarter without specifying a decline for Blizzard.
With Blizzard making up about 80% of Vivendi’s game unit, we opted to lower Blizzard’s revenue by about 10% to $1.1 billion for the 12 months through March to reflect the first-quarter decline.
Business software maker Sage came in at $1 billion,$1.02 billion, to be exact,in sales for its North America unit in Irvine. Sales have been flat from a year earlier for the past six months after growing earlier in 2007.
The two software makers dominated, accounting for 37% of the $5.7 billion in revenue at the 20 companies on the list.
Blizzard is in the process of being combined with Santa Monica-based Activision Inc. in a deal valued at $19 billion. Vivendi is set to have a 68% stake in what’s to be called Activision Blizzard, based in Santa Monica.
The Irvine operations of Blizzard are staying intact and are set to be run by Chief Executive Mike Morhaime.
Blizzard’s top game, “World of Warcraft,” is one of the gems of the deal. The game counts more than 10 million global subscribers, who each pay $15 a month to face off with each other online.
As for Sage, it has 500 local workers and accounts for about 45% of its parent’s yearly revenue.
The company’s software streamlines tasks for companies, including accounting, purchasing and other day-to-day operations. Its bread and butter are sales to businesses with five to 250 workers.
Last year, the company decentralized U.S. operations to help independent sellers of its software work more efficiently with Sage’s some 2 million customers.
Former chief executive Ron Verni, who led the North American unit from Atlanta, and former chief financial officer Jim Eckstaedt, recently left.
Sage got a new chief executive last month, telecom veteran Sue Swenson. The company is looking to double sales in the next few years.
“Right now we’ve all settled into our new roles and we are trying to digest everything and focus on our customers,” said Nina Smith, president of Sage’s business management division in Irvine.
Other Entries
The list included Orange County-based software makers, such as Aliso Viejo’s Quest Software Inc., as well as locally based subsidiaries and the OC operations of big companies such as Microsoft Corp., Oracle Corp. and IBM Corp.
The companies are ranked by revenue generated from local operations or by total revenue if the company is based here.
The software makers saw an 18% gain in yearly sales from a year earlier, according to the list.
Including Blizzard and Sage, the list had estimates for 11 companies. Without estimates, the remaining nine companies saw a 14% rise in yearly sales.
A new name on the list: No. 3 IBM, which in the past three years bought two software companies here that used to have their own entries.
Big Blue paid $1.5 billion for Costa Mesa’s FileNet Corp. a few years ago.
FileNet has been folded into IBM’s software operations and no longer uses the FileNet name other than for products.
In April, IBM acquired Swedish software maker Telelogic AB, which has its U.S. headquarters in Irvine.
Sales figures for Telelogic and what used to be FileNet aren’t broken out by IBM. The Business Journal estimated Telelogic and FileNet’s combined sales at $695 million.
No. 4 Quest Software Inc. in Aliso Viejo saw the biggest boost in sales. Revenue was up 12%, or some $70 million, to $654 million.
Quest, a maker of software that improves or helps manage other business programs, has been on a buying binge. It’s bought nine companies in the past three years.
No. 5 Irvine’s Epicor Software Corp. saw a 7% sales gain to $431 million, making it the second-largest OC-based stand-alone software maker after Quest.
In February, Epicor named Thomas Kelley as president and chief executive, replacing longtime chief George Klaus, who’s now chairman overseeing the executive transition.
In December, Epicor paid $323 million for Quebec’s NSB Retail Systems PLC, a maker of software for apparel, shoe and specialty retailers.
Movers
A big mover on the list was No. 6 Irvine’s Kofax PLC, a unit of Britain’s Dicom Group PLC.
Kofax moved up four spots with estimated sales of $335 million.
The company, which makes scanning software used by businesses to get rid of paper and speed up work productivity, picked up a new chief executive, Reynolds Bish, from a competitor late last year.
The biggest mover on the list was No. 10 Irvine-based Vision Solutions Inc., a maker of software that runs on servers developed by IBM.
Vision Solutions jumped seven spots on 85% growth to $98 million in revenue.
“We’ve been on a trajectory of growing organically and by acquisitions,” said Chief Executive Nicolaas Vlok. “We’ve also been in-troducing new products and quite aggressively expanding in Europe, Asia and South America.”
A year ago, Vision Solutions bought its biggest competitor, Oakbrook Terrace, Ill.-based Lakeview Technology Inc. for an undisclosed amount.
