Overseas growth, particularly in the North American market, and domestic expansion are the code words of 1995 for two of France’s hottest young software companies. The attraction is double for companies like Business Objects SA, which last year became the first European software developer to be listed on NASDAQ, Ilog SA, Ingenia SA and O2 Technology SA. First, there’s the lure of capital that Europe sorely lacks and, second, the sales potential of the region, which they are attacking via niche markets where they hold rare advantages. Ilog SA, France’s star in the world of C++ software component development, took advantage of the first motivation, announcing last month that it received $5m in new financing from two leading US firms, Oak Investment Partners and Atlas Ventures, and Banque Paribas (CI No 2,592). Chief executive Pierre Haren told Computergram that Ilog, in fact, got more capital than it initially wanted. We looked for $4m, but $2.5m was the minimum for each US investor, and we wanted to keep Paribas. So we had to go up to $6m, of which we said $1m would be done by having shareholders sell shares to investors.

Give us money

The $5m that goes back into the company brings Ilog’s equity capital to over $8.5m. The privately-held company made just over $1m in 1994 on revenues of $15m. The Massachusetts Institute of Technology-educated Haren quipped, We’re making money now, so that’s why they wanted to give us money. Now we feel more at ease to use up the profits we make, which we will use to grow on East Coast. We have 14 people on the West Coast and one on the East. We have some technical people we’ve hired from Europe to go to the US, and by June we should have at least 14. The whole US operation should triple in size every year for the next three years, Haren explained. Ilog’s tools are selling well in the US now, but Haren is not taking any chances. There are a lot of lessons we can take in marketing, and we will hire people in the US for that. The best experience is in the US for making access to the product simpler, faster and for helping people learn whether they need the product or not, he said. As an aid to the marketing push Ilog is planning worldwide, the company just installed a web server with T-1 access in US and has a partnership with the Open Software Foundation to create a generic, advanced web browser to compete with Mosaic. The Foundation says it will show the browser, called Ariadne, to sponsors tomorrow, February 15, and that it should be generally available in a few months. Ariadne has two interesting features, Haren said. One, a browser for group browsing, where the user sees a display of the network that shows what other members of group have already accessed. Second, is that it can send code to the client instead of just data because it is written in proper Lisp IlogTalk, he quipped. The functions are described on the server, which is at htpp:/www.ilog.fr. Ilog has also seven partners in the US, including Carnegie Group, Unisys Corp, Sabre Decision Technology (the operations research subsidiary of American Airlines), and Sun Microsystems Inc for its next generation of software engineering tools based on Ilog Views. Ingenia, a small systems engineering company specialising in new technologies such as object programming, artificial intelligence, natural language processing and man-machine communication, is focusing on both domestic expansion and entering the US market.

By Marsha Johnston

Since its inception five years ago, the company has worked closely with Ilog, developing an expertise in its technologies, notably Ilog Solver. Since the first of the year, it has acquired significant stakes in two other French companies, Isotop Ingenierie and Bureautique SA. Ingenia first bought 50% of Isotop, a 14-person, five-year-old company based in Aix-en-Provence and Paris, specialising in artificial intelligence, image editing and digital simulation software. More recently, the company bought 51% of Bureautique to reinforce its newly created consulti

ng activity. Bureautique handles systems consulting, management seminars and conferences and develops groupware applications, primarly using Lotus Notes, for which it is a business partner. A spokesman said its clients are mostly large enterprises in manufacturing and insurance and banking. Ingenia president and chief executive Claude Amenc told Computergram that all of the acquisitions we make integrate perfectly with our strategy; that is, sometimes to buy a technology, sometimes a market where we have little presence. The consulting market was an area where we were getting ready to take off – we had assigned half a dozen people to the activity – and Bureautique is already well known in the area, where [Louis] Nauges [president and founder] is a guru, Amenc said. Now with some 175 engineers, Ingenia does not intend to stop at the French border. In an interview at the end of last month, Amenc said Ingenia’s US activity will comprise two main axes. The first and principal push will be to attack the banking market with its Firco SWIFT message handling product, for which Ingenia has concluded a marketing agreement with Tandem Computers Inc. Firco has historically competed with MPS, a product from Boston-based Cognitive Systems Inc. In Europe, says Amenc, we were always beating them with Firco because it was five or six years more advanced than MPS, so we ended up buying their European clientele last October. In addition, he said, Steve Mott, formerly president of Cognitive Systems, has been hired to lead Ingenia Inc in Boston. Ingenia’s second axe of activity, he said, involves its partnership with Ilog for Ilog’s constraints-based programming product Ilog Solver, for which Mott has already found a client – James River Corp in Alabama. That area – constraints-based programming – is one area where we can add some value because it is one area where the Americans don’t have much of an advance on us. With artificial intelligence and object orientation, the other things we do, we can’t bring much, but sometimes we French manage to get a lead, he said. Another possibility in the US would involve Ingenia’s Smalltalk-based software development.

Smalltalk servers

About half of our revenues in France come from building software around Smalltalk. We’ve done a lot of work with Smalltalk servers, with a layer of workflow software that conforms to CORBA, for example, Amenc said. A distributor of Palo Alto-based ParkPlace Systems Inc’s Smalltalk in France, the chief executive said Park Place has expressed interested in those products. Ranked the third-fastest growing information technology company in France in 1994, parent company Ingenia already has approximately $11m in orders for this year, while its subsidiaries have racked up some $3m. The total, based on less than one quarter’s business activity, compares to some $12.6m in all of 1994. Both companies are obviously eyeing the potential for going public, although Ilog will be undoubtedly the first to arrive. Says Haren, Our next challenge is to mount an initial public offering for NASDAQ, which may happen next year.