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As the software industry becomes more packaging-and marketing-oriented, it increasingly resembles the record business. Companies would rather make a monster hit that sells hundreds of thousands of copies than design specialized programs that appeal only to tiny segments of the market. Trade publications cater to the hit mentality by compiling bestseller lists in categories like education or home management. Imitation becomes a measure of success. Once a particular piece of software takes off, a slew of copycat programs, which promise to do the same thing for less money, often follow. VisiCalc imitations have become known in the industry as VisiClones and CalcAlikes.
One new company, Electronic Arts of San Mateo, Calif., is taking the record-industry model a few steps further. Founded by Trip Hawkins, 29, a Stanford M.B.A. and former executive with Apple Computer, it is packaging its line of entertainment software in cardboard slipcases that consciously resemble record jackets. The company is also trying to elevate its programmers to star status by referring to them as "software artists," prominently displaying their names on packages and photographing them in pop idol-like settings.
Lotus Development Corp. is another example of a company exploiting the hot market in software. The firm last year introduced a new program called 1-2-3 that combines several basic functions in one package. Someone, for example, can file information, do financial modeling and draw graphs with the same product. The one-year-old Cambridge, Mass., company has already gathered $5 million in venture capital, and it spent $1 million on a three-month advertising campaign. The investment paid off handsomely. Though it costs $495, 1-2-3 is now the bestselling business program.
Integrated software products like 1-2-3 that combine several functions are generally too complex for small companies to produce. They require the talents of dozens of programmers working in close coordination. Sometimes such projects even stretch the abilities of larger firms. Late last year Visi-Corp announced that it would soon introduce a new integrated product called VisiON. But original dead lines have slipped, and now the product is not expected to be on the market until October, or perhaps even later.
With so many companies pushing so many products so hard, a bottleneck is developing at the end of the distribution pipeline in stores. Dealers are running out of shelf space, and products are being introduced in such a flood that salespeople often do not even know how they work. Says Daniel Bricklin, co-author of VisiCalc: "It is hard getting marketed. The dealers have to be persuaded that a program will sell."
Softsel Computer Products, which is based in Inglewood, just outside Los Angeles, started business in 1980 as a soft ware distributor. In its first six months it had revenues of $700,000. This year it will gross $70 million. The firm distributes more than 3,000 products to 1,200 outlets. Each month it screens more than 400 new programs, but fewer than eight are selected for sale. Says President Robert Leff: "The acceptance rate is very low. Advertising is almost critical. A very good product needs advertising out there generating the interest."