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Fred Gibbons beat Bill Gates to the PC software market
with shrink-wrapped programs . His company was
celebrated, then petered out .
What might
have been
By Seth Lubove
SoFIWARE PVBLtSHING CoRI' ., vendor
of word processing, graphics <strong>and</strong>
other desktop programs, was a classic
Silicon Valley startup, right down to
the Atherton, Calif. garagc in which it
was born . It was a winner on Wall
Street, going public at 7 in 1984 <strong>and</strong>
climbing to 35'/a by 1991 .
The stock recently traded at 3r/a,
not much more than its cash on h<strong>and</strong> .
Sales peaked at 5156 million in 1992
but will probably be a fourth of that
this fiscal year . A cautionarv tale for
anyone who forgets how quickly the
tables turn in technolog`, .
Go back to 1977 . Fred M . Gibbons,
a marketing manager at Hewlett-Packard,
meers with Steven Jobs
at a pizza shop to talk a bout a job for
Gibbons as a product manager at
then-fledgling Apple Computer . After
lunch, they go next door to a Byte
computer store to look at the Apple I
computer . Gibbons, now 45, notices
the rudimentary re software, hanging
in plastic bags on a pegboard .
"Isaid, 'Gee, I bet there would be
an opportunity for someone to represent
the [softwarej authors,"' Gibbons
recalls . In his spare time, Gibbons
started Softivare Publishing, <strong>and</strong>
by 1981 it had revenues approaching
51 million from sales of a software
version of a Rolodex . Gibbons <strong>and</strong>
nvo Hewlett-Packard colleagues quit
their day jobs .
Their "rFS" added a word processor,
spellchecker <strong>and</strong> graphics program
. It was a prescient forerunner of
today's big marketing fad in the software
industry, the sofnvare "suite ."
Gibbons became a celebrity .
"One of the best-run sofw'are companies
in the <strong>business</strong>," Business
162
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1
Software Publishing's Irlan Sallm
"It's an acceptance
of what Is ."
Week rhapsodized in a 1986 article .
But already sales of the Pts serics
were tapering off, as other companies
entered the market w'ith morc-powerful
programs . Gibbons' next inspiration
was the Harvard Graphics presentation
program, <strong>business</strong> sofnware
that can create slick te t <strong>and</strong> slide
presentations . Softwarc Publishing
captured 70% of the market for nosbased
presentation softtvare .
And then Gibbons made a mistake .
Betting on 13M's operating system
rather than Microsoft's, he invested
money in making OS/2 vcrsions of
his products before tackling Windows
versions .
Gibbons wasn't the only developer
to bet against Windows . Jim i`vfanzi at
Lotus made the same mistake . Was it
resentment over Bill Gates' success?
Overconfidence in mm? Fortunatelv
for Manzi, he also invested in a groupware
program called Nores that saved
the day <strong>and</strong> motivated IBM to buy
Lotus for 53 .5 billion .
What was Gibbons' Notes? He,
too, made a play for the network
market . He spent S20 million to develop
software for servers, the computcr
hubs around which nenvorks
are built . But the <strong>business</strong> was very
different from Sofnvare's usual offering
of shrink-wrapped sofhvare . Network
sofncare calls for higher prices
<strong>and</strong> much more client h<strong>and</strong>holding .
Gibbons spent another $25 million
on a Windows database sofnvare
company with a marketing <strong>and</strong> support
staff that could deal with the
corporate clients . Good money after
bad . Gibbons sold the network software
operations last year at a loss .
Software Publishing's only strong
product today is its Hanard Graphics
program, which retails for 5330 . It
still gets glowing reviews in computer
magazines, but one good program is
not good enough any more . Customers
like to buy their programs in bundles
. You get a fairly good presentation
graphics package in Microsoft's
$500 office suite that includes wellestablished
word processor <strong>and</strong>
spreadsheet programs as well .
Gibbons says he was once invited
by Borl<strong>and</strong> International's Philippe
Kahn to team up in a best-of-breed
suite that would have included Borl<strong>and</strong>'s
spreadsheet <strong>and</strong> WordPerfect's
word processor . He turned down the
offer, Fearing compatibility problems .
"That was probably a mistake," he
says now.
Too many such mistakes . Gibbons
remains chairman but stepped aside
last year as chief executive, leaving
that job to Irfan Salim, who had
previously run international sales . Salim
has tired more than half the staff
<strong>and</strong> subleased most of the company's
320,000-square-foot headquarters in
Santa Clara, Caiif
Software Publishing, now focusing
on visual presentations, sells programs
that can run a slide show <strong>and</strong>
organize computer images for easy
recall . A comedown? "It realh', is an
acceptance ofwhat is, instead ofwhat
we want it to be," says Salim .
Gibbons these days spends his rime
piloting his personal airplane-he was
lucky enough to sell sonic of his stock
in better days-<strong>and</strong> lecturing on entrepreneurship
at Stanford . Could he
ha~e been anodier Bill Gates? "We
were in the same place at the same
time," he says wistfully . "He had one
set ofcards . I had another." ~
Forbes 0 August 14, 1995
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http://legacy.library.ucsf.edu/tid/agf97d00/pdf
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