Local Software Makers Boost Sales, Add Jobs
Software developed by Orange County companies has become as good as gold for the area’s economy.
In the past year, OC’s 15 largest software makers boosted their collective revenue by nearly $400 million, or 33%, to $1.6 billion, according to this week’s list. The increase was similar, 27%, when comparing the software makers on this year’s list against those on last year’s.
Only one company, Irvine database management software developer Pick Systems, No. 14 on last year’s list, fell off the list after failing to increase revenue last year.
Local software makers also added jobs. In the past 12 months, the 15 companies added 409 new jobs, a 12% growth rate, for a total of 3,808 OC workers.
The list includes OC-based software companies, locally based subsidiaries or large OC operations of companies based elsewhere. The software makers are ranked by sales, or in the case of subsidiaries or local offices, by OC revenue.
Wonderware Corp., an Irvine subsidiary of Britain’s Invensys PLC that makes software designed to automate business processes in a variety of segments, showed the largest percentage revenue increase, zipping three spots to No. 3. The company reported $190 million in revenue between March 1999 and March 2000, more than double the $88.5 million it posted the year before.
Most of that growth is a result of acquisitions Wonderware made last year, according to spokesman John Caccese. Parent Invensys acquired Newton, Mass.-based Marcam Solutions and Canada’s Avantis and folded those companies into Wonderware. As a whole, Invensys employs 1,110, about 350 of those in Orange County.
Quest Software Inc., which raised $61.6 million in its initial public offering last year, enjoyed similar growth, reporting $86.7 million in sales over the four quarters ended in March, compared to $40.6 million the year before. The company develops software designed to make Oracle Corp. databases and other network applications run more smoothly.
Though Quest acquired two small software firms, MBR Technologies Inc. and Foglight Software, most of its revenue and employee growth,89% locally to 359 employees, and 165% to 818 company-wide,came as a result of internal growth as the company beefed up its sales staff, said John Laskey, the company’s chief financial officer. Quest also is in a hot market: the near-ubiquity of e-commerce and corporate networks is fueling demand for software that helps businesses cope with the growing volume of data.
“Downtime and sluggish response are becoming less and less acceptable to anybody,” he said. “If you think about all the applications that are exploding out there, those are very, very complicated and the more complicated they are, they have a higher tendency to break. And the pain these companies feel feeds right into where we help out.”
But even taking out Wonderware and Quest’s large gains, the other companies would have posted an impressive 23% gain in sales to $1.32 billion.
FileNET held onto its crown as OC’s highest-revenue software maker, pulling in $357.7 million, a 12% increase from the previous year. The Costa Mesa company has long specialized in document management software but in the past few years has moved into e-commerce.
Also holding its spot was No. 2 Epicor Software Inc., which makes software used to integrate data from different parts of a business for smoother operation and better customer service. Despite troubles for larger software companies in the same sector and reports that corporations were postponing their usual technology purchases because of fears related to the year-2000 date rollover, Epicor posted a 46% increase in sales to $248.7 million.
Texas-based BMC Software Inc., which employs 200 people in its Irvine unit previously known as New Dimension Software, posted revenue of $160 million, a 71% increase from the year before. The company designs e-commerce software and employs 7,200 company-wide.
Magic Software Enterprises Inc., an Israeli software firm that counts Irvine as its North American home, brought in $64 million this year, a 65% increase from the year before. (But the company said last week it doesn’t expect to meet revenue and profit estimates for the current quarter.)
Of the companies ranked, all but four posted double- or triple-digit growth. Of those four, three posted declines in revenue.
Irvine-based Interplay Entertainment Corp., which makes video games,a notoriously fickle segment,posted $98 million in sales in the four quarters ending March 31, compared to $107.4 million the year before, an 8% decline.
Hotel systems software maker MAI Systems Corp., also based in Irvine, dropped three places to No. 10 after its revenue slipped from $61.3 million to $49.2 million, a 22% decline. And Simulation Sciences Inc. a Brea company that makes software designed to simulate industrial process so companies can fine-tune current and planned operations, saw its sales drop 16% to $36 million last year.
