Attest Systems Inc, a California-based software testing and auditing company, is riding high on the back of the Year 2000 threat, fresh from results in which revenues rose from under $1m in 1997 to just under $10m this year.
CEO Herb Gottlieb, who owns 52% of the firm, says that the money firms set aside for tackling the millennium date change is not throwaway money. There is a significant return to be had with your Y2k work if you do it properly.
AttestÆs software audits a firmÆs IT, checking what software applications are running on the computers. So inevitably he is used by the Software and Industry Information Association and the Business Software Alliance to check out companies suspected of using unlicensed software. If the firm has only half the licenses it legally requires, the fact will show up, saving litigation and potential embarrassment. One firm in Boston which he recently raided had only ten PCs, but no licenses for the AutoCaD engineering software which ran on all ten. The firm eventually settled for $60,000, without the cost of the apps, which would run to another $4, 000 per machine.
Gottlieb started out in accountancy in Illinois, and gradually moved west, getting into management consultancy IT as he did so. He went solo in 1981, and ten years later, armed with a search and seizure warrant, he was involved in his first software raid on a firm in south San Francisco.
Now the chief executive of a company starting to blossom, he has over a hundred similar raids under his belt. His company has sprung from three employees in 1997 to sixty today, and he is looking further. Predicted revenues for 1999 are $15m, with staffing levels up to 100.
The IPO will have to wait until the firm has branched out, acquiring purchasing, distribution and metering pieces. WeÆre looking for acquisitions to expand our product line. These allow the software to ascertain not just what runs what app, but what they’ve used in the past, and for how long. The distribution enables Attest to upgrade software remotely. Current software carries a 93% gross profit margin, but the new sectors will not dilute that figure, they are equivalent in value, says Gottlieb.
Gottlieb says he is looking at 2000, 2001 for an initial public offering, and that the magic number is around $20m. He is scouting Europe for distribution links at the moment and says he wants the company to receive 25% – it currently represents 10% of sales – of its revenues from Europe this year.
