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March 4, 1997updated 05 Sep 2016 1:04pm


By CBR Staff Writer

Jim Cannavino is safe out of the firing line at IBM Corp these days and these days he has the relatively untroubled berth of running Perot Systems Corp as president and chief executive, where he is acquiring the mien of elder statesman – just the man to give the keynote address at the Robertson Stephens Technology Conference in San Francisco last week. His message was that in face of a profound shift in market power and choice to consumers via advancements in information technology, businesses must begin to collaborate across industries to simplify the complexities of everyday life and serve individual customer needs better. The organizing principle will be based on the value of the information, and the ease of transactions offered to individuals by clusters of companies that Cannavino dubbed WebArenas. He reckons companies must team and align with firms in tangential industries to provide composite products and services, and suggested that while WebArenas may start out as Web sites, they will grow as companies link up and support activities beyond information and create compelling new experiences for consumers so that large-scale WebArenas will organize disparate, but compatible businesses and capabilities to serve customers drawn by their self-selecting interests. Through technology, a new post-corporate, post-brand era is emerging; market control is dissolving, industry boundaries are in flux, and consumers have gained control of the agenda, Cannavino said, and, talking his book, asserted that It is becoming crucial for companies to develop one-on-one relationships with their customers, and that Perot Systems is mastering a complex set of technologies, combined with extensive expertise in customer behaviors, that we broadly call TLC – Total Lifetime of a Customer, the intent being to @enable our clients to develop and maintain intimate, long lasting customer relationships.


The keynote safely out of the way, Symantec Corp president and chief executive Gordon Eubanks took the podium to declare that his company expects revenues and earnings per share for its fourth quarter ending March 31, to be up from the third quarter. He said it should provide a fillip for the share price despite the gathering retrenchment in technology stocks in the wake of Alan Greenspan’s uncompromising message, because, he told Reuter’s man on the spot after his presentation, Wall Street analysts had been expecting fourth quarter revenues at the software utilities specialist to be slightly down from the third quarter’s figure of $124.1m.


You can’t actually invest yet in Wired Ventures Inc, the publishing company that launched Wired Magazine, even if you wanted to, but that proved no obstacle to chief financial officer Jeff Simon being invited to address investors at the Robertson Stephens & Co technology conference. His message was that the company was proving wrong the doubters that caused it to pull its initial public offering twice last year, because the company expects Wired Magazine to turn a profit in the first part of 1998. Wired Ventures Inc, also has the HotWired on-line services, HotBot search engine and HardWired book publisher, and chief financial officer Jeff Simon had to admit that Wired lost $27m in 1996, and that was before one-time non-cash items – but revenue for the year jumped 50% to $37.8m. As for the loss, That will be the biggest number you see going forward, Simon said, noting that the company had invested heavily to launch new products in 1996. The on-line business grew to 16% of revenues in 1996 and will eventually reach about 60% of total revenues, he forecast – and HotWired is expected to be profitable in the next 12 to 18 months. For the future, Wired plans to focus on the Wired brand, building the company through joint ventures and licensing to add additional revenues at marginal cost, the finance chief said. Much of successful media is about brand, he added – Wired is a well-known and untapped brand. In January, Wired completed a $21.5m private placing and currently employs more than 300 people.


Macromedia Inc, specializing in software tools used to create multimedia special effects on World Wide Web pages and elsewhere, is suffering along with Apple Computer Inc from the slowdown in the market for the Macintosh. However, the company remains on schedule to ship version 6.0 of its Director Multimedia Studio this month, chairman John Colligan told the conference, adding that it would be followed by version 4.0 of Authorware Interactive Studio in May. Despite the fading of the Mac, Colligan said, sales into the Windows market should be up 40% to 50% this year, with a 50% to 60% increase in revenues from Director. Colligan went on to say Macromedia has decided against large-scale lay-offs and expense cuts to regain profitability, and instead the company wants to invest in its business to stir top-line growth. The San Francisco firm saw a loss of six cents a share in its third quarter to December, compared with an 18 cent profit a year ago.

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Northern Telecom Ltd sent its vice president of investor relations R B Kaye along to the conference with the message that the Canadian was targeting revenue growth in the mid-teens for 1997 and gross margins of around 40%. We intend to have return on assets of between 16% and 19% this year, he declared. He said that Northern Telecom expected general sales and administration costs in the 17% to 19% and that research and development should be in the 12% to 14% of revenue range – strong investment was a requirement to remain competitive in the telecommunications equipment business. He also said he expected that measurements of customer satisfaction, the basis for a significant portion of senior management’s salary and bonuses package, would be over 85%. The company has seen rapid growth in its wireless network products, which approached 20% of total revenues in 1996, while data and media communications have grown substantially since its launch into the categories in 1994, Kaye concluded.


CyberCash Inc is following through on its strategy and has made favorable progress in boosting revenues in its first quarter, executive vice-president Bruce Wilson told the attendees. There’s one thing on our mind and that’s revenues, and the revenue is coming, he said, but declined to discuss details. The Vienna, Virginia company develops software and services for secure financial transactions on the Internet and last September launched its CyberCoin micropayment service, which enables small cash transactions over the Internet. Wilson reckons that CyberCoin will be the company’s primary source of revenue in the future and represented its killer app.


We heard from Informix Software Inc last week, but the company had more to say at the conference, notably that it plans to use its next-generation database software in trials of video-on- demand services in Europe later this year, chief executive Phil White confided. He said that the Menlo Park company will formally announce the trial next quarter and video delivery will be over ordinary copper cable, he noted, adding that we are confident we can do video on demand. And Informix Software Inc is also moving to lower the price per licensed user that it charges for its software tools – the tools business was a drag on Informix’s fourth quarter results, and chief executive Phil White said the company now plans to break the tools into components, allowing it to sell products to customers at less than the $500 to $1,000 currently charged per installation. The company’s future depends largely on success of its Universal Server database, which began shipping in December.


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