Wednesday, June 17. 2009

World Events, “Numbers” Validate Intergraph’s Wise Vision and Strategy

Today, I and other trade press members had a chance to sit down with Halsey Wise, CEO and Reid French, COO of Intergraph. What I came away with was that Wise’s strategy and leadership to “laser focus” the company in areas where he believed the company could be successful have paid off. And that’s not based on my opinion; let's take a look at the numbers: from 2003 he’s taken the company from $17 million in profits to $180 million (2008) and now has $240 million in cash reserves. It’s not often that a CEO get’s to look back at their body of work and validate their plan. More often than not, CEO’s are fired if quarterly results don’t match up. Many things have helped Wise to succeed but he was brought in to make the company more profitable, which he did, and then he took it private. Whether that was part of the plan or not, I don’t know, but getting out from under the quarterly pressure of delivering ever-better numbers to analysts allowed him and the company to let the vision play out.

Now seeking to enter the next phase or “After Next” part of the “Now-Next-After Next” plan that he began back in 2004, this strategy benefits from two world events that are in play. First, national security issues and two wars still occupy significant portions of government budgets, especially during the Bush years. Second, the global economic recovery efforts are pouring money into infrastructure projects and with Intergraph’s strength in process, power, and marine (PP&M), and focus on security, government and infrastructure (SG&I), the lightening rod issues of smart grid, and “shovel ready” projects are a match.

Another success factor has been Wise’s tactical move to rely almost entirely on a direct sales model and to de-emphasize a partner channel.  From a technical standpoint, where many Intergraph solutions rely on some systems integration efforts, this approach has worked. Wise noted that his competitors have tended to rely more on a third party channel of smaller companies and with the software industry in a downturn, many of these smaller firms are the first ones to get hit in a recession.

The company has not been without its disappointments and challenges. It, too, has had to lay off people recently and it still must follow through on its plan to take some of the best pieces of software code to eventually create a common architecture for its products. But Wise has taken the company through reorganization and "right-sizing" and continues to emphasize the strategy of sticking to specific vertical market specialization. And, many of the employees with whom I spoke this week say, “it’s a different company.”

Posted by Joe Francica in Intergraph 2009 at 21:19 | Comments (0) | Trackbacks (0) |

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