Special report: operating ratios.How much should a "typical" software company spend on marketing, product development, overhead, and other major expense categories? We put together some numbers a few years back to help answer this question, but the software business clearly has changed a good deal since then. So--starting with this issue--we're going to track basic financial ratios on a regular annual basis. For anyone who wants to skip five dense pages of numbers, a quick look at these ratios appears in the chart below. During 1995, publicly-owned PC software companies typically spent 21% of their net revenues on COGS These are all the Cogs found in Disney's Toontown Online. Names that are moved forward are leaders of the HQ of that specific Cog type. Bossbots
Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. , up substantially from profit levels during 1993 and 1994. These ratios provide reasonably good benchmarks for developing a new business plan or--with some caveats--for measuring a company's spending and performance against the competition. The data behind these benchmarks comes from the 59 public software companies that qualified for this year's Soft.letter 100 rankings (Soft*letter, 4/11/96), so the numbers reflect the experience of companies whose primary business is personal computer software. These 59 companies may differ considerably in size and market focus, but their basic financial models tend to be similar enough to produce meaningful comparisons. Moreover, by using audited numbers from public companies, we've we've Contraction of we have. we've have managed to minimize In a graphical environment, to hide an application that is currently displayed on screen. For example, in Windows and Mac, the application's window is removed from the screen and represented by an icon on the Windows Taskbar. In the Mac, the icon is placed in the Dock. See Win Minimize windows. the kind of accounting aberrations that occur when financial data is collected from small, closely-held adj. 1. owned by a relatively few shareholders; - of business organizations; as, a closely-held corporation s>. Adj. 1. closely-held - owned by a relatively few shareholders; "a closely-held corporation" companies--although we also recognize that benchmarks based on public companies may not be entirely appropriate for early-stage ventures, niche-oriented companies, or so-called so-called adj. 1. Commonly called: "new buildings ... in so-called modern style" Graham Greene. 2. "lifestyle" firms. Since there are so few software companies that are really "typical," our data also breaks out expense ratios for four subgroups: consumer (12 companies), vertical-market (11 companies), general business (24 companies), and "small" (12 companies, defined as business software companies with revenues under $25 million). It's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have perhaps risky to create benchmarks based on a dozen or so companies, but the financial ratios that emerge for these four groups in fact may be more useful than the numbers that come from our larger universe of 59 companies. Finally, we've included a total of three years of expense and profit data for the 59 companies we track. That data helps identify trend lines (some of which are important) and reduces year-to-year volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in the numbers. So what do the trendlines show? Here are some highlights: * Cost of Goods Sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold : The COGS ratio traditionally reflects direct costs of manufacturing and related operations, as well as other costs--such as royalties--that are incurred on a per-unit basis. The COGS category sometimes includes the cost of delivering various types of fee-based services, such as consulting and support. (PC software companies do not consistently classify clas·si·fy tr.v. clas·si·fied, clas·si·fy·ing, clas·si·fies 1. To arrange or organize according to class or category. 2. To designate (a document, for example) as confidential, secret, or top secret. tech support costs in any one expense category; in a few cases where companies reported support costs as a separate expense category, we assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. these costs to COGS.) When we look at the three-year trend in COGS spending, a definite pattern of cost-cutting emerges: Despite severe price erosion erosion (ĭrō`zhən), general term for the processes by which the surface of the earth is constantly being worn away. The principal agents are gravity, running water, near-shore waves, ice (mostly glaciers), and wind. in the retail marketplace, the 1995 median ratio for all companies was 21%, four percentage points lower than the 1993 benchmark A performance test of hardware and/or software. There are various programs that very accurately test the raw power of a single machine, the interaction in a single client/server system (one server/multiple clients) and the transactions per second in a transaction processing system. . The one category with substantially higher COGS is consumer software; here, the median level of spending over three years is 39%, compared to 18% for general business, 22% for vertical, and 23% for small companies. * Sales and Marketing: S&M costs continue to be the software industry's single largest expense category, consuming 35% of a typical company's 1995 revenues. This benchmark has declined slightly over the past three years, but the real differences in S&M spending show up when we look at spending among different types of companies. Not surprisingly, small companies spend above-average amounts on marketing; their three-year average is 43%, compared to 39% for business and 38% for verticals. Consumer companies turn out to be relatively tight-fisted tight-fisted Adjective unwilling to spend money; mean tight-fisted adj → tacaño tight-fisted adj → avaro/a : Their three-year average spending level is a modest 24% of sales. * Research and Development: R&D spending has barely budged from 16% over the past three years. Moreover, there are only tiny differences from one category of company to another: Business software companies spent 17% of revenues on R&D over the past three years, while consumer, vertical, and small companies each spent 15%. (The 16% R&D benchmark may slightly understate un·der·state v. un·der·stat·ed, un·der·stat·ing, un·der·states v.tr. 1. To state with less completeness or truth than seems warranted by the facts. 2. actual spending levels by two or three percentage points, since accounting rules allow software companies to capitalize To regard the cost of an improvement or other purchase as a capital asset for purposes of determining Income Tax liability. To calculate the net worth upon which an investment is based. To issue company stocks or bonds to finance an investment. some R&D expenses. In addition, "purchased" technology is often treated as a non-recurring expense. Much to the chagrin of financial analysts, there seems to be no reliable way to compare total R&D spending consistently from company to company.) * General and administrative: G&A spending has also declined slightly over the past three years, to a current level of 11% of sales. Here, there seem to be distinct economies of scale: Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. , the industry's biggest company, has the lowest G&A spending ratio in our universe of public companies, while the highest ratios show up among small, early-stage companies. In fact, the three-year G&A average for small companies is 19%, versus 14% for consumer, 11% for vertical, and 10% for business. * Operating profit: In a very simple company model, operating profit will equal whatever money is left over after expenses are deducted de·duct v. de·duct·ed, de·duct·ing, de·ducts v.tr. 1. To take away (a quantity) from another; subtract. 2. To derive by deduction; deduce. v.intr. from sales. Among real-world companies, however, the picture gets a bit more complicated. Most financial statements for public software companies include hefty heft·y adj. heft·i·er, heft·i·est 1. Of considerable weight; heavy. 2. Rugged and powerful. See Synonyms at heavy. 3. amounts for non-operating income and expenses (such as interest), as well as for non-recurring items such as acquisition costs, technology purchases, legal settlements, and writeoffs of abandoned product lines. In the aggregate, these supposedly "extraordinary" costs play such a large role in software finance that they might almost qualify as a regular expense category. This complexity is reflected in our benchmark numbers for operating profit. When we add up the four major expense categories--COGS, S&M, R&D, G&A--the total for 1995 was 83% of sales, which suggests that roughly 17% of revenues was "left over." But the actual operating profit ratio for 1995 was 11% of sales--a reasonable performance benchmark, but probably not a satisfactory number for anyone whose business plan numbers are supposed to add up to 100%. (Operating profit also varies considerably by category: The three-year average is 11% for verticals, 4% for business, a negative 4% for consumer, and a negative 5% for small companies.) The three-year averages for operating profit also underscore The underscore character (_) is often used to make file, field and variable names more readable when blank spaces are not allowed. For example, NOVEL_1A.DOC, FIRST_NAME and Start_Routine. (character) underscore - _, ASCII 95. a disturbing problem for the industry as a whole. When we look at the median profitability of all companies over three years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time benchmark is just 3%, barely above break-even, despite the fact that the annual medians for these three years were 5%, 8%, and 11%. In fact, the 3% median reflects a common pattern of sporadic sporadic /spo·rad·ic/ (spo-rad´ic) occurring singly; widely scattered; not epidemic or endemic. spo·rad·ic or spo·rad·i·cal adj. 1. Occurring at irregular intervals. 2. large losses that wipe out wipe tr.v. wiped, wip·ing, wipes 1. a. To subject to light rubbing or friction, as with a cloth or paper, in order to clean or dry. b. two or three years of modest profits. Out of 59 public software companies, 28 (slightly less than half) produced an average operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. over the 1993-1995 period. For an industry that's famous for its ability to generate huge profits, that's clearly not a healthy trend.
Cost of Goods Sold (COGS)
COGS Ratio
1993 1994 1995 Avg.
S Syncronys n/a 5% 8% 6%
B McAfee 7% 9% 5% 7%
S IQ Software 9% 10% 12% 10%
B NetManage 12% 10% 10% 11%
V SPSS 12% 11% 10% 11%
B Xcellenet 11% 11% 12% 11%
B INSO 14% 13% 13% 13%
B FTP Software 13% 14% 13% 14%
B Cheyenne 12% 12% 17% 14%
S Spyglass 16% 17% 11% 15%
S CE Software 17% 13% 16% 15%
V Autodesk 18% 16% 14% 16%
B Stac 20% 16% 12% 16%
B Microsoft 17% 16% 15% 16%
V SoftDesk 19% 17% 15% 17%
B Wall Data 15% 15% 22% 17%
S Citrix 18% 21% 13% 18%
B Visio 16% 20% 18% 18%
B Adobe 19% 18% 17% 18%
B ON Technology 10% 26% 19% 18%
B Macromedia 20% 17% 18% 19%
B Netscape n/a 23% 14% 19%
C Seventh Level n/a 22% 18% 20%
B SPC 16% 20% 23% 20%
V State of the Art 20% 21% 21% 21%
V Globalink n/a 25% 19% 22%
V Fractal Design 20% 27% 19% 22%
S MathSoft 18% 24% 26% 23%
B Novell 22% 23% 24% 23%
C MECC 27% 22% 20% 23%
V MapInfo 25% 23% 21% 23%
S Datawatch 29% 23% 19% 24%
B Symantec 30% 24% 18% 24%
B Micrografx 25% 24% 25% 25%
B Borland 27% 27% 21% 25%
S MySoftware 29% 24% 25% 26%
V Santa Cruz 29% 28% 27% 28%
B Insignia 36% 29% 27% 30%
C SoftKey n/a 31% 32% 32%
B Quarterdeck 30% 40% 24% 32%
V Timberline 33% 32% 32% 32%
S IMSI 30% 34% 35% 33%
B Caere 35% 31% 33% 33%
S SystemSoft 40% 32% 27% 33%
V Eagle Point 35% 35% 31% 33%
C Sierra On-Line 38% 33% 30% 34%
S Blyth 30% 28% 49% 36%
C Maxis 38% 36% 37% 37%
C Broderbund 41% 36% 36% 38%
B Phoenix 46% 50% 19% 39%
V Platinum 34% 48% 35% 39%
S TouchStone n/a 32% 46% 39%
C Edmark 44% 47% 30% 40%
C Davidson 47% 48% 49% 48%
C Expert 74% 41% 37% 51%
B Intuit 51% 54% 48% 51%
C Spectrum Holobyt 50% 60% 51% 54%
C Activision 55% 58% 52% 55%
C GT Interactive 39% 61% 64% 55%
Median 25% 24% 21% 23%
Revenues (000)
1993 1994 1995
S Syncronys n/a $695 $3,580
B McAfee $31,039 $52,937 $90,065
S IQ Software $15,211 $19,119 $20,097
B NetManage $29,106 $71,466 $125,446
V SPSS $42,724 $51,757 $63,029
B Xcellenet $17,413 $26,889 $34,099
B INSO $13,757 $23,463 $43,387
B FTP Software $58,726 $93,245 $136,376
B Cheyenne $56,694 $97,737 $127,927
S Spyglass $1,375 $3,629 $10,350
S CE Software $9,966 $11,385 $12,919
V Autodesk $353,154 $405,596 $454,612
B Stac $36,984 $31,325 $45,804
B Microsoft $3,753,000 $4,649,000 $5,937,050
V SoftDesk $26,115 $30,582 $41,737
B Wall Data $64,641 $101,240 $110,741
S Citrix $5,164 $10,086 $14,568
B Visio $7,142 $20,616 $34,224
B Adobe $580,100 $675,600 $762,300
B ON Technology $7,905 $25,828 $44,121
B Macromedia $31,462 $37,542 $53,698
B Netscape n/a $1,403 $80,656
C Seventh Level n/a $4,708 $12,861
B SPC $104,360 $61,511 $31,377
V State of the Art $33,074 $37,340 $48,118
V Globalink n/a $17,315 $17,606
V Fractal Design $4,265 $7,680 $13,133
S MathSoft $25,649 $26,610 $15,883
B Novell $1,830,411 $1,998,077 $2,041,174
C MECC $18,021 $21,681 $28,046
V MapInfo $15,836 $26,981 $36,070
S Datawatch $10,427 $11,521 $16,633
B Symantec $344,626 $328,299 $334,867
B Micrografx $55,865 $60,732 $60,444
B Borland $463,951 $393,519 $254,064
S MySoftware $5,461 $9,224 $13,399
V Santa Cruz $178,243 $184,068 $199,329
B Insignia $18,509 $39,361 $55,095
C SoftKey n/a $121,287 $167,042
B Quarterdeck $52,470 $38,291 $70,713
V Timberline $18,205 $21,641 $24,819
S IMSI $13,193 $23,118 $20,300
B Caere $48,264 $59,130 $51,939
S SystemSoft $6,290 $9,154 $15,221
V Eagle Point $6,852 $8,927 $15,831
C Sierra On-Line $49,716 $62,745 $83,440
S Blyth $11,743 $14,845 $16,715
C Maxis $13,864 $23,332 $38,147
C Broderbund $95,583 $111,774 $171,594
B Phoenix $66,313 $86,173 $49,941
V Platinum $28,050 $53,398 $56,153
S TouchStone n/a $7,202 $9,356
C Edmark $8,733 $11,663 $22,719
C Davidson $62,372 $93,171 $147,226
C Expert $12,555 $19,727 $27,638
B Intuit $121,372 $194,126 $395,729
C Spectrum Holobyte $13,682 $40,887 $84,350
C Activision $21,069 $26,604 $40,669
C GT Interactive $10,306 $131,973 $224,738
Median
Categories: B = Business; S = Business with revenues under $25 million; C = Consumer; V = Vertical
Sales & Marketing
S&M Ratio
1993 1994 1995 Avg.
C Broderbund 16% 17% 15% 16%
B INSO 19% 16% 15% 17%
C Activision 11% 19% 26% 19%
C GT Interactive 40% 10% 13% 21%
B FTP Software 16% 18% 30% 21%
C Expert 20% 22% 22% 21%
C Maxis 19% 23% 23% 22%
C SoftKey n/a 22% 23% 23%
B Phoenix 21% 19% 29% 23%
S Syncronys n/a 24% 22% 23%
B Intuit 24% 22% 25% 23%
B Cheyenne 17% 24% 32% 25%
V Timberline 27% 25% 24% 25%
C Davidson 30% 25% 23% 26%
V Eagle Point 26% 27% 27% 27%
C Spectrum Holobyte 24% 29% 31% 28%
B Novell 28% 28% 28% 28%
B NetManage 29% 26% 37% 31%
B McAfee 27% 34% 33% 31%
B Microsoft 32% 30% 32% 31%
S SystemSoft 36% 29% 33% 33%
S Spyglass 44% 27% 30% 33%
V Autodesk 34% 34% 34% 34%
B Adobe 36% 35% 32% 34%
C Edmark 31% 40% 33% 35%
V SoftDesk 35% 35% 35% 35%
C MECC 37% 34% 34% 35%
S CE Software 33% 35% 39% 36%
V State of the Art 38% 37% 34% 36%
S IQ Software 35% 41% 36% 37%
B Stac 45% 38% 29% 37%
V Santa Cruz 35% 36% 41% 37%
B Macromedia 41% 39% 33% 38%
B Insignia 53% 32% 35% 40%
C Sierra On-Line 48% 38% 35% 40%
S TouchStone n/a 32% 49% 40%
B Wall Data 38% 39% 49% 42%
B Xcellenet 40% 43% 43% 42%
V Platinum 51% 48% 35% 45%
C Seventh Level n/a 38% 52% 45%
B Quarterdeck 45% 57% 34% 45%
S MySoftware 59% 38% 39% 45%
V MapInfo 45% 43% 49% 46%
V Fractal Design 44% 51% 44% 46%
B Caere 51% 44% 48% 48%
S IMSI 51% 48% 44% 48%
B Symantec 52% 50% 44% 49%
B ON Technology 63% 42% 48% 51%
V SPSS 48% 52% 53% 51%
S Blyth 29% 53% 74% 52%
V Globalink n/a 49% 60% 54%
B Micrografx 57% 54% 53% 55%
B Visio 61% 53% 51% 55%
S Citrix 75% 44% 46% 55%
B SPC 57% 57% 69% 61%
S MathSoft 64% 69% 55% 63%
B Borland 61% 67% 78% 69%
S Datawatch 98% 94% 69% 87%
B Netscape n/a 319% 49% 184%
Median 37% 36% 35% 37%
Revenues (000)
1993 1994 1995
C Broderbund $95,583 $111,774 $171,594
B INSO $13,757 $23,463 $43,387
C Activision $21,069 $26,604 $540,669
C GT Interactive $10,306 $131,973 $5,224,738
B FTP Software $58,726 $93,245 $5,136,376
C Expert $12,555 $19,727 $27,638
C Maxis $13,864 $23,332 $38,147
C SoftKey n/a $121,287 $167,042
B Phoenix $66,313 $86,173 $49,941
S Syncronys n/a $695 $53,580
B Intuit $121,372 $194,126 $395,729
B Cheyenne $56,694 $97,737 $127,927
V Timberline $18,205 $21,641 $24,819
C Davidson $62,372 $93,171 $5,147,226
V Eagle Point $6,852 $8,927 $15,831
C Spectrum Holobyte $13,682 $40,887 $584,350
B Novell $1,830,411 $1,998,077 $2,041,174
B NetManage $29,106 $71,466 $125,446
B McAfee $31,039 $52,937 $90,065
B Microsoft $3,753,000 $4,649,000 $5,937,000
S SystemSoft $6,290 $9,154 $15,221
S Spyglass $1,375 $3,629 $10,350
V Autodesk $353,154 $405,596 $5,454,612
B Adobe $580,100 $675,600 $5,762,300
C Edmark $8,733 $11,663 $522,719
V SoftDesk $26,115 $30,582 $41,737
C MECC $18,021 $21,681 $28,046
S CE Software $9,966 $11,385 $12,919
V State of the Art $33,074 $37,340 $48,118
S IQ Software $15,211 $19,119 $20,097
B Stac $36,984 $31,325 $45,804
V Santa Cruz $178,243 $184,068 $5,199,329
B Macromedia $31,462 $37,542 $53,698
B Insignia $18,509 $39,361 $55,095
C Sierra On-Line $49,716 $62,745 $583,440
S TouchStone n/a $7,202 $9,356
B Wall Data $64,641 $101,240 $110,741
B Xcellenet $17,413 $26,889 $34,099
V Platinum $28,050 $53,398 $56,153
C Seventh Level n/a $4,708 $12,861
B Quarterdeck $52,470 $38,291 $70,713
S MySoftware $5,461 $9,224 $13,399
V MapInfo $15,836 $26,981 $36,070
V Fractal Design $4,265 $7,680 $13,133
B Caere $48,264 $59,130 $51,939
S IMSI $13,193 $23,118 $20,300
B Symantec $344,626 $328,299 $3,34,867
B ON Technology $7,905 $25,828 $44,121
V SPSS $42,724 $551,757 $63,029
S Blyth $11,743 $14,845 $16,715
V Globalink n/a $17,315 $17,606
B Micrografx $55,865 $60,732 $60,444
B Visio $7,142 $520,616 $34,224
S Citrix $5,164 $10,086 $14,568
B SPC $104,360 $61,511 $31,377
S MathSoft $25,649 $26,610 $515,883
B Borland $463,951 $393,519 $254,064
S Datawatch $10,427 $11,521 $16,633
B Netscape n/a $51,403 $80,656
Median
Categories: B = Business; S = Business with revenues under $25 million; C = Consumer; V = Vertical Note: Borland (Borland Software Corporation, Austin, TX, www.borland.com) A software company founded as Borland International in 1983 by Philippe Kahn. The company is noted for its language and development products. It also popularized the desktop accessory for DOS PCs with its Sidekick program. . Caere Caere (sē`rē), ancient city of Etruria, c.30 mi (50 km) N of Rome, Italy, at the site of the modern Cerveteri. Although a few miles from the sea, it had ports at Alsium (near modern Palo) and Pyrgi (modern Santa Severa). , Datawatch, Davidson Da·vid·son , Jo(seph) 1883-1952. American sculptor best remembered for his vigorous portrait busts of Woodrow Wilson, Franklin D. Roosevelt, and Albert Einstein, among others. , and Sierra (company, games) Sierra - (Or "Sierra On-Line") A computer game developer founded in the early 1980s by Ken and Roberta Willams in the small mountain town of Oakhurst California. Sierra was named after the local mountian range, 15 miles from the famous Yosemite National Park. On-Line include G&A costs in their S&M category.
Research & Development
R&D Ratio
1993 1994 1995 AVG
C GT Interactive 0% 0% 0% 0%
S IMSI 3% 5% 11% 6%
C Expert 4% 7% 8% 6%
C SoftKey n/a 6% 7% 6%
S TouchStone n/a 6% 8% 7%
V Globalink n/a 5% 9% 7%
B Quarterdeck 3% 11% 12% 9%
B Micrografx 8% 10% 8% 9%
S Datawatch 11% 12% 6% 10%
B Cheyenne 8% 9% 12% 10%
C Davidson 6% 11% 13% 10%
B McAfee 11% 13% 10% 11%
S IQ Software 10% 12% 13% 12%
B Intuit 10% 11% 13% 12%
B Xcellenet 12% 9% 15% 12%
V Fractal Design 14% 10% 12% 12%
B Phoenix 9% 8% 22% 13%
B Microsoft 13% 13% 14% 13%
S MySoftware 20% 12% 10% 14%
C Broderbund 14% 14% 13% 14%
V Autodesk 15% 14% 14% 14%
B Wall Data 12% 13% 18% 14%
V State of the Art 9% 18% 16% 14%
V SPSS 16% 14% 14% 14%
C Edmark 5% 18% 20% 15%
S MathSoft 10% 15% 19% 15%
V Santa Cruz 15% 15% 16% 15%
C Activision 12% 16% 18% 16%
C Maxis 18% 14% 16% 16%
V MapInfo 17% 15% 16% 16%
S SystemSoft 17% 16% 15% 16%
B Caere 18% 15% 15% 16%
B Stac 15% 18% 16% 16%
V Eagle Point 17% 19% 13% 16%
B Novell 16% 17% 18% 17%
S Blyth 17% 8% 27% 17%
B Adobe 17% 17% 18% 17%
B NetManage 18% 16% 19% 18%
S CE Software 17% 18% 19% 18%
C Sierra On-Line 15% 21% 20% 19%
B Insignia 25% 14% 18% 19%
V Timberline 19% 19% 20% 19%
B Borland 17% 17% 24% 19%
B INSO 21% 20% 17% 20%
B Symantec 21% 20% 19% 20%
S Spyglass 27% 14% 19% 20%
S FTP Software 16% 22% 23% 20%
B Visio 30% 17% 15% 21%
B ON Technology 30% 20% 16% 22%
S Citrix 33% 19% 16% 23%
C MECC 26% 24% 20% 23%
V SoftDesk 24% 25% 24% 24%
C Spectrum Holobyt 24% 26% 24% 25%
B Macromedia 27% 27% 23% 26%
S Syncronys n/a 42% 19% 30%
B SPC 29% 28% 38% 32%
V Platinum 26% 41% 31% 33%
C Seventh Level n/a 91% 87% 89%
B Netscape n/a 262% 31% 146%
Median 16% 15% 16% 16%
Revenues (000)
1993 1994 1995
C GT Interactive $10,306 $131.97 $224.74
S IMSI $13.19 $23,118 $20,300
C Expert $12.56 $19,727 $27.64
C SoftKey n/a $121,287 $167,042
S TouchStone n/a $7,202 $9,356
V Globalink n/a $17,315 $17,606
B Quarterdeck $52,470 $38,291 $70,713
B Micrografx $55,865 $60,732 $60,444
S Datawatch $10.43 $11,521 $16,633
B Cheyenne $56,694 $97,737 $127.93
C Davidson $62,372 $93,171 $147.23
B McAfee $31,039 $52,937 $90.07
S IQ Software $15.21 $19,119 $20,097
B Intuit $121.37 $194,126 $395.73
B Xcellenet $17,413 $26.89 $34,099
V Fractal Design $4,265 $7.68 $13.13
B Phoenix $66,313 $86,173 $49.94
B Microsoft $3,753,000 $4,649,000 $5,937.00
S MySoftware $5,461 $9,224 $13,399
C Broderbund $95.58 $111,774 $171.59
V Autodesk $353,154 $405,596 $454,612
B Wall Data $64.64 $101,240 $110.74
V State of the Art $33,074 $37,340 $48.12
V SPSS $42,724 $51,757 $63.03
C Edmark $8,733 $11,663 $22,719
S MathSoft $25,649 $26,610 $15.88
V Santa Cruz $178.24 $184,068 $199.33
C Activision $21,069 $26.60 $40.67
C Maxis $13,864 $23.33 $38.15
V MapInfo $15,836 $26,981 $36,070
S SystemSoft $6,290 $9.15 $15.22
B Caere $48,264 $59,130 $51.94
B Stac $36,984 $31,325 $45.80
V Eagle Point $6,852 $8,927 $15,831
B Novell $1,830,411 $1,998,077 $2,041.17
S Blyth $11,743 $14,845 $16.72
B Adobe $580,100 $675,600 $762.30
B NetManage $29,106 $71,466 $125.45
S CE Software $9,966 $11,385 $12.92
C Sierra On-Line $49,716 $62,745 $83.44
B Insignia $18,509 $39.36 $55,095
V Timberline $18,205 $21,641 $24.82
B Borland $463,951 $393.52 $254,064
B INSO $13,757 $23,463 $43.39
B Symantec $344.63 $328,299 $334.87
S Spyglass $1,375 $3,629 $10.35
S FTP Software $58,726 $93.25 $136.38
B Visio $7.14 $20,616 $34,224
B ON Technology $7,905 $25,828 $44,121
S Citrix $5,164 $10,086 $14,568
C MECC $18,021 $21,681 $28,046
V SoftDesk $26,115 $30,582 $41,737
C Spectrum Holobyt $13,682 $40,887 $84,350
B Macromedia $31,462 $37,542 $53,698
S Syncronys n/a $695 $3,580
B SPC $104,360 $61,511 $31,377
V Platinum $28,050 $53,398 $56,153
C Seventh Level n/a $4,708 $12,861
B Netscape n/a $1,403 $80,656
Categories: B = Business; S = Business with revenues under $25 million; C = Consumer; V = Vertical
General & Administrative
G&A Ratio
1993 1994 1995 Avg.
B Microsoft 3% 4% 4% 4%
B Intuit 4% 5% 6% 5%
C Broderbund 7% 7% 6% 7%
B Syantec 9% 8% 5% 7%
V SPSS 9% 8% 7% 8%
B Macromedia 9% 8% 7% 8%
B Novell 9% 8% 7% 8%
B NetManage 10% 7% 8% 8%
B Wall Data 8% 8% 10% 9%
V SoftDesk 10% 9% 7% 9%
C GT Interactive 12% 6% 8% 9%
V Eagle Point 9% 9% 9% 9%
V Fractal Design 10% 10% 7% 9%
B Adobe 11% 9% 8% 9%
B Cheyenne 12% 8% 8% 9%
S MathSoft 7% 10% 13% 10%
B FTP Software 10% 10% 10% 10%
C MECC 12% 9% 9% 10%
B Visio 14% 9% 7% 10%
B ON Technology 15% 9% 7% 10%
V Santa Cruz 11% 10% 10% 10%
B McAfee 13% 11% 9% 11%
S IMSI 9% 11% 12% 11%
V State of the Art 12% 12% 9% 11%
C Activision 17% 10% 8% 12%
B Phoenix 12% 10% 13% 12%
S MySoftware 14% 11% 11% 12%
V MapInfo 11% 11% 13% 12%
B Insignia 18% 10% 8% 12%
V Platinum 9% 19% 9% 12%
B Micrografx 14% 14% 12% 13%
C Expert 13% 14% 16% 14%
B SPC 13% 11% 19% 14%
C Edmark 18% 16% 9% 14%
B INSO 14% 15% 15% 15%
C Maxis 19% 14% 11% 15%
V Autodesk 16% 14% 14% 15%
C SoftKey n/a 18% 12% 15%
V Timberline 16% 16% 16% 16%
S TouchStone n/a 17% 15% 16%
V Globalink n/a 16% 17% 17%
S Citrix 27% 14% 12% 18%
B Xcellenet 21% 17% 16% 18%
S SystemSoft 28% 17% 12% 19%
B Quarterdeck 20% 25% 15% 20%
S Blyth 21% 16% 25% 21%
B Stac 20% 30% 11% 21%
C Spectrum Holobyt 30% 18% 15% 21%
S IQ Software 22% 21% 21% 21%
S Syncronys n/a 31% 15% 23%
S Spyglass 41% 22% 19% 27%
S CE Software 29% 29% 29% 29%
C Seventh Level n/a 42% 24% 33%
B Netscape n/a 181% 12% 97%
B Borland n/a n/a n/a n/a
B Caere n/a n/a n/a n/a
S Datawatch n/a n/a n/a n/a
C Davidson n/a n/a n/a n/a
C Sierra On-Line n/a n/a n/a n/a
Median 13% 11% 11% 12%
Revenues (000)
1993 1994 1995
B Microsoft $3,753,030 $4,649,000 $5,937,000
B Intuit $121,372 $194,126 $395,729
C Broderbund $95,583 $111,774 $171,594
B Syantec $344,626 $328,299 $334,867
V SPSS $42,724 $51,757 $63,029
B Macromedia $31,462 $37,542 $53,698
B Novell $1,830,411 $1,998,077 $2,041,174
B NetManage $29,106 $71,466 $125,446
B Wall Data $64,641 $101,240 $110,741
V SoftDesk $26,115 $30,582 $41,737
C GT Interactive $10,306 $131,973 $224,738
V Eagle Point $6,852 $8,927 $15,831
V Fractal Design $4,265 $7,680 $13,133
B Adobe $580,100 $675,600 $762,300
B Cheyenne $56,694 $97,737 $127,927
S MathSoft $25,649 $26,610 $15,883
B FTP Software $58,726 $93,245 $136,376
C MECC $18,021 $21,681 $28,046
B Visio $7,142 $20,616 $34,224
B ON Technology $7,905 $25,828 $44,121
V Santa Cruz $178,243 $184,068 $199,329
B McAfee $31,039 $52,937 $90,065
S IMSI $13,193 $23,118 $20,300
V State of the Art $33,074 $37,340 $48,118
C Activision $21,069 $26,604 $40,669
B Phoenix $66,313 $86,173 $49,941
S MySoftware $5,461 $9,224 $13,399
V MapInfo $15,836 $26,981 $36,070
B Insignia $18,509 $39,361 $55,095
V Platinum $28,050 $53,398 $56,153
B Micrografx $55,865 $60,732 $60,444
C Expert $12,555 $19,727 $27,638
B SPC $104,360 $61,511 $31,377
C Edmark $8,733 $11,663 $22,719
B INSO $13,757 $23,463 $43,387
C Maxis $13,864 $23,332 $38,147
V Autodesk $353,154 $405,596 $454,612
C SoftKey n/a $121,287 $167,042
V Timberline $18,205 $21,641 $24,819
S TouchStone n/a $7,202 $9,356
V Globalink n/a $17,315 $17,606
S Citrix $5,164 $10,086 $14,568
B Xcellenet $17,413 $26,889 $34,099
S SystemSoft $6,290 $9,154 $15,221
B Quarterdeck $52,470 $38,291 $70,713
S Blyth $11,743 $14,845 $16,715
B Stac $36,984 $31,325 $45,804
C Spectrum Holobyt $13,682 $40,887 $84,350
S IQ Software $15,211 $19,119 $20,097
S Syncronys n/a $695 $3,580
S Spyglass $1,375 $3,629 $10,350
S CE Software $9,966 $11,385 $12,919
C Seventh Level n/a $4,708 $12,861
B Netscape n/a $1,403 $80,656
B Borland $463,951 $393,519 $254,064
B Caere $48,264 $59,130 $51,939
S Datawatch $10,427 $11,521 $16,633
C Davidson $62,372 $93,171 $147,226
C Sierra On-Line $49,716 $62,745 $83,440
Median
Categories: B = Business; S = Business with revenues under $25 million; C Consumer; V = Vertical Note: Borland, Caere, Datawatch, Davidson, and Sierra On-Line include G&A costs in their S&M category.
Operating Profit
Operating Profit Ratio
1993 1994 1996 Avg.
B Cheyenne 50% 46% 30% 42%
B Microsoft 35% 37% 34% 36%
B FTP Software 45% 36% 24% 35%
B INSO 32% 36% 27% 32%
B NetManage 32% 37% 24% 31%
C Broderbund 22% 26% 30% 26%
B McAfee 43% 6% 27% 25%
V Autodesk 18% 22% 24% 21%
S IQ Software 25% 17% 12% 18%
S Syncronys n/a -2% 36% 17%
B Xcellenet 17% 19% 14% 17%
V MapInfo 18% 17% 12% 16%
C GT Interactive 9% 23% 15% 15%
C Davidson 17% 2% 14% 15%
B Adobe 12% 8% 21% 14%
B Novell 6% 14% 22% 14%
B Wall Data 22% 21% -5% 13%
V SPSS 15% 12% 11% 13%
V Eagle Point 13% 10% 13% 12%
V State of the 8% 9% 15% 11%
V SoftDesk 8% 11% 13% 11%
C Maxis 6% 13% 13% 11%
V Fractal Design 12% 2% 18% 11%
B Phoenix 9% 2% 17% 9%
B Macromedia 2% 10% 13% 9%
C MECC -2% 9% 16% 8%
S Spyglass -28% 21% 29% 7%
V Timberline 5% 8% 8% 7%
V Santa Cruz 10% 10% -3% 6%
S MySoftware -22% 15% 15% 3%
S SIMSI 7% 2% -2% 3%
B Caere -6% 4% 1% 0%
B Insignia -32% 15% 12% -1%
B Stac -1% -2% -2% -2%
S TouchStone n/a 13% -18% -3%
B Visio -20% 1% 9% -3%
C Edmark 1% -21% 8% -4%
B Micrografx -7% -9% 3% -4%
C Expert -15% 14% -14% -5%
C Activision -1% -8% -7% -5%
S SystemSoft -37% 5% 12% -7%
C SoftKey n/a 21% -36% -8%
B Symantec -16% -19% 11% -8%
S CE Software 3% -25% -3% -8%
C Sierra On-Line -25% -7% 4% -9%
V Globalink n/a -14% -7% -11%
S Citrix -53% 2% 12% -13%
B ON Technology -37% -16% 11% -14%
B Quarterdeck 2% -67% 4% -20%
S Datawatch -37% -29% 5% -20%
B Borland -10% -17% -48% -25%
S MathSoft -25% -27% -23% -25%
S Blyth 3% -5% -75% -26%
B Intuit 11% -91% -17% -32%
B SPC -32% -24% -65% -40%
V Platinum -63% -74% -10% -49%
C Spectrum Holobyte -28% -146% -21% -65%
C Seventh Level n/a -129% -121% -125%
B Netscape n/a -862% -9% -435%
Median 5% 8% 11% 3%
Revenues (000)
1993 1994 1996
B Cheyenne $56,694 $97,737 $127,927
B Microsoft $3,753,000 $4,649,000 $5,937,000
B FTP Software $58,726 $93,245 $136,376
B INSO $13,757 $23,463 $43,387
B NetManage $29,106 $71,466 $125,446
C Broderbund $95,583 $111,774 $171,594
B McAfee $31,039 $52,937 $90,065
V Autodesk $353,154 $405,596 $454,612
S IQ Software $15,211 $19,119 $20,097
S Syncronys n/a $695 $3,580
B Xcellenet $17,413 $26,889 $34,099
V MapInfo $15,836 $26,981 $36,070
C GT Interactive $10,306 $131,973 $224,738
C Davidson $62,372 $93,171 $147,226
B Adobe $580,100 $675,600 $762,300
B Novell $1,830,411 $1,998,077 $2,041,174
B Wall Data $64,641 $101,240 $110,741
V SPSS $42,724 $51,757 $63,029
V Eagle Point $6,852 $8,927 $15,831
V State of the Art $33,074 $37,340 $48,118
V SoftDesk $26,115 $30,582 $41,737
C Maxis $13,864 $23,332 $38,147
V Fractal Design $4,265 $7,680 $13,133
B Phoenix $66,313 $86,173 $49,941
B Macromedia $31,462 $37,542 $53,698
C MECC $18,021 $21,681 $28,046
S Spyglass $1,375 $3,629 $10,350
V Timberline $18,205 $21,641 $24,819
V Santa Cruz $178,243 $184,068 $199,329
S MySoftware $5,461 $9,224 $13,399
S SIMSI $13,193 $23,118 $20,300
B Caere $48,264 $59,130 $51,939
B Insignia $18,509 $39,361 $55,095
B Stac $36,984 $31,325 $45,804
S TouchStone n/a $7,202 $9,356
B Visio $7,142 $20,616 $34,224
C Edmark $8,733 $11,663 $22,719
B Micrografx $55,865 $60,732 $60,444
C Expert $12,555 $19,727 $27,638
C Activision $21,069 $26,604 $40,669
S SystemSoft $6,290 $9,154 $15,221
C SoftKey n/a $121,287 $167,042
B Symantec $344,626 $328,299 $334,867
C E Software $9,966 $11,385 $12,919
C Sierra On-Line $49,716 $62,745 $83,440
V Globalink n/a $17,315 $17,606
S Citrix $5,164 $10,086 $14,568
B ON Technology $7,905 $25,828 $44,121
B Quarterdeck $52,470 $38,291 $70,713
S Datawatch $10,427 $11,521 $16,633
B Borland $463,951 $393,519 $254,064
S MathSoft $25,649 $26,610 $15,883
S Blyth $11,743 $14,845 $16,715
B Intuit $121,372 $194,126 $395,729
B SPC $104,360 $61,511 $31,377
V Platinum $28,050 $53,398 $56,153
C Spectrum Holobyt $13,682 $40,887 $84,350
C Seventh Level n/a $4,708 $12,861
B Netscape n/a $1,403 $80,656
Categories: B = Business; S = Business with revenues under $25 million; C = Consumer; V = Vertical |
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