Micrografx Seeks Integrators for Web-Enabled Graphics

By Lisa Terry, Contributing Writer

Enterprise graphics software developer Micrografx wants to stake a claim in the state and local government e-business marketplace by creating a reseller program targeting government systems integrators.

The company is in the early stages of program development and is seeking to tap integrator partners with close government relationships in major metropolitan areas.

The Allen, Texas-based, $57 million developer has long been active in the federal marketplace with direct and reseller sales into Defense Department aerospace projects. Federal contract resellers include Lockheed Martin Corp., Raytheon Co. and Sikorsky Aircraft Corp.

A successful move into state and local government markets would help bolster a company that has been lagging financially. Revenue was down 45 percent to $18.2 million for the six months ended Dec. 31, with a net loss of $7.3 million blamed on a decline in legacy product revenue and loss of technology revenue because of licensing agreements for its consumer products to Cendant Corp. of New York and The Learning Co. of Cambridge, Mass.

The company has moved its focus away from consumer-oriented creative graphics products to emphasize enterprise graphics.

Analysts gave mixed reviews to the initiative.

"Unfortunately, they picked not the best time to do a total transformation," said Manuel Royo, vice president for Internet Equity Research for Southwest Securities, Dallas. "Looking for new customers who have never heard of you with a new product when Y2K hit doesn't work."

Recent announcement of solid deals may help, but the addition of state and local government customers promises only moderate impact, he said.

"That business, contrary to what you might believe, is low margin, and the government is very cyclical. September is when they spend the most money. Government is just part of the market opportunity," Royo said.

Micrografx's applications ActiveCGM Author (list price $7,500) and ActiveCGM Custom Viewing ($10,000 per server) are used to help visualize data on the Web in standard formats. System integrators will be encouraged to help agencies transition from legacy environments that employ graphics to Web versions that make intelligent graphics more widely and readily available.

These will be customers who are "looking to be more competitive and offer better services" through more efficient, streamlined processes, said Devette Ellington, director of marketing for Micrografx. Potential application areas include illustrated parts catalogs, intelligent schematics, logistics and facilities management and technical manuals.

The company has completed three such projects in the public sector through its direct sales force, but plans to divert such engagements to its reseller channel. For the Chicago Housing Authority, Micrografx created a Web-based project management application, a viewing solution for its public housing modernization program.

The application enables the agency to track myriad aspects of the facilities management process, from budgets to environmental codes to maintenance records, as well as monitor ongoing construction. An agency official could, for example, access and print architectural drawings via a Web browser right at the construction site, rather than returning to the agency's facility to retrieve hard copies.

"They needed a way to look at a lot of data in a concise and clear format," Ellington said. "Using graphics enabled them to do that and link to the data behind the graphics."

Micrografx deployed the application, set up the server, performed database integration and helped reformat the agency's drawings to enable easy accessibility via the Web.

At the California Department of Motor Vehicles, Micrografx created a Web-based facilities and logistics management system to help make graphics-intensive documents readily available and usable on the department's intranet. Users may access, view, link and mark up organizational charts, proposals, forms and other vital information.

For Illinois Power, the developer implemented a real-time monitoring and control system with a direct tie to an energy management system. The application enables the agency to view the entire city energy grid through a graphical display to control gas and electrical systems.

These agencies may be considered early adopters of the technology. "As we make inroads with these early adopters, some of the second-tier cities and metropolitan areas will be able to track their progress and make the business decision about when to innovate," Ellington said. The market "is wide open."

In state and local applications, "we bring many of the same values as we do to aerospace," said Brian Marguardt, product manager at Micrografx. "We're able to take existing graphics and give them hot spots, intelligent linking to related data."

Using an indirect channel will enable the developer to pursue projects it could not cost-effectively service on its own, Ellington said. The program is in an early stage of development, with training and certification programs in formative stages.

Micrografx also is talking to industry analysts and working trade shows and conferences to identify potential partners, looking in particular for integrators with experience or interest in e-business applications and existing relationships with customers such as power utilities.