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ARIS: A SOFTWARE TUNER AND COACHThe ascent of network PCs, the Internet, and Year 2000 terrors have brought headaches, confusion, and huge expense to companies around the world. But for Paul Song, chairman and CEO of software consultants ARIS Corp., such problems are the stuff profits are made from. ARIS' specialty is making the latest software from Microsoft Corp. and others easy for companies to use. It must be good at it. Although the Bellevue (Wash.)-based company competes head-to-head with giants like Andersen Consulting, revenues have soared 96.8% annually over the past three years, and reached $55 million in 1997. Earnings have raced ahead at a 75.1% annual clip, and hit $5.3 million in 1997. That makes ARIS No.41 on BUSINESS WEEK's Hot Growth list. It has been a fast rise for Song, 35, the son of Korean immigrants. Having completed a master's in computer science from MIT, he was working as a software consultant at Oracle Corp. in 1990. But fears of management turmoil, and a longing to strike out on his own, persuaded Song to launch ARIS. At the time, Song had just $1,000 in savings and an answering machine. But that didn't stop him from bidding on a project to help timber giant Weyerhaeuser Co. implement an extensive computer system that would track information from the mills to its box plants. Competition was stiff, and included EDS and Oracle, Song says. Initially Weyerhaeuser thought ARIS too small. Song countered that if he were still at Oracle, he would be heading up the project. ''What, did I just get dumb because I left Oracle?'' Song demanded. BIG WINS. The blunt talk won him the job. To complete the three-year project, Song persuaded his wife and college sweetheart, Tina, to also quit her engineering job at Oracle. His brother John came in to handle finances and billing. Today, Tina heads human resources and internal computer systems at the 600-person company, while John runs training programs for U.S. clients. Song logged big wins at Boeing, the IRS, and Lockheed Martin. Today ARIS even trains Microsoft's marketing staff on its own Exchange E-mail program. Result: Analyst Wayne Segal of DMG Technology Group expects ARIS to hike revenues 64%, to $90 million in 1998. Profits should rise 36%, to $7.2 million. The key to success, says Song, is cross-selling. In 1993, he realized that while ARIS was often hired to help a company fine tune its software, good money could be made offering training once the software was up and running. By 1997, 39% of ARIS' revenues came from these classes. ''One business feeds the other,'' says Rob Owen, an analyst with Pacific Crest Securities. To boost revenue, ARIS is spending heavily on its own information systems. Classroom enrollment is maximized by a yield management system similar to one used by airlines to fill their seats. But ARIS still faces a big challenge: attracting and keeping the skilled software engineers and teachers it needs. One reason ARIS went public last summer was to be able to offer stock options to its employees. The IPO raised $31 million, money that now fuels expansion. The stock has risen 43% to 31, and ARIS has acquired four rivals and doubled its U.S. offices. It recently bought two consulting and training outfits in Britain. Analysts say those buys look smart so far. More offices in Europe and the U.S. are likely. ''We want to be the No.1 player,'' says Song, who with his wife now owns 45% of the company. Given his track record capitalizing on change, the opportunities look vast.
By Seanna Browder in Bellevue, Wash. RELATED ITEMS
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Updated May 21, 1998 by bwwebmaster
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