If you’ve got an image problem, rather than a business problem, then what you need is an image makeover. Or so goes the logic of Dennis Vohs, the CEO of Ross Systems. Last year, the Atlanta-based supplier of integrated software systems for process manufacturing, finance and distribution, spent at least $7m – nearly 10% of revenues – on boosting its image and profile. Ross is still trying to recover from the crippling effects of a patent infringement suit that it finally settled in 1994. The suit was filed by Marcam Solutions, and although Vohs is prevented from saying how much Ross paid to settle it, he says it was approximately what it would have cost the company in legal fees for a three or four year legal battle. All my lawyers were telling me that they didn’t have a case, says Vohs, but what they failed to say was that no-one would buy my products while the case was going through. During the years of the suit, Ross’ revenues dipped from a high of $87m in 1993 to a low of $67m in 1994. In the process, it lost valuable ground in the race to become a leader in the lucrative market for client/server business software. Since then, the company has made a partial come-back, with revenues of $81m in 1997.
Prestigious customers
Vohs’ strategy is now four fold: narrow Ross’ market focus to high-end and mid-tier process manufacturing; increase its international reach; grow sales on Intel servers running Microsoft NT; and, above all, increase its market visibility. That it why it spent double its 12 month profits of $3.5m on marketing activities, including print advertising, PR and direct marketing. Vohs complains that although his product competes well on function and implementation costs (1:1 versus an industry average of 3:1), when the decision is narrowed down to two choices, Ross often loses out to bigger names such as Baan NV and SAP AG. That is not to say Ross does not have some prestigious customers, including Eli Lilly, Dupont Canada and Mary Kay Cosmetics. But Vohs believes his company clearly suffers from a case of ‘nobody ever got fired for buying IBM’ syndrome. Many companies simply play safe and buy from bigger suppliers. Vohs believes increasing his company’s visibility will also increase its viability when it comes to those close competitions. Ross has been given a leg up in its quest for respectability by favorable Gartner Group ratings, which have been used to close deals when board members were hesitant about spending millions on a product without a big brand name. Ross is also benefiting from two trends not of its making – the Year 2000 problem and the move to NT. Vohs has found many businesses are simply scrapping their old software systems and purchasing new Year 2000-compliant ones. It’s a good business for us, says Vohs. At the same time, Ross has invested heavily to develop sales away from the Unix battleground. Some 40% of all sales are now NT-based, but because of lower license fees, these sales account for 25% of revenues.
