Despite potential competitors, the peer-to-peer local area network market seems recession-proof from Artisoft Inc’s vantage point. The Tucson, Arizona-based company has reported net profits up 694.8% at $3.2m, which include a $2.6m charge resulting from exercise of a stock option, on turnover up 79% at $17m. Founded in 1982, Artisoft has always looked to the low end of the market, with cost-effective and easy-to-use local area network software, systems and communications devices for users of MS-DOS personal computers. European controller John Flaherty attributes the leap in net profits to the low-cost LANtastic product range. A group of personal computers can be converted into a network for under $2,000 with the network starter kit and a couple of boards. The use of existing personal computers negates the need for additional investment in dedicated servers. The company is expanding fairly aggressively, he says. Foreign sales in the European area, which encompasses Northern, Central and Southern Europe, the Mediterranean, North Africa and the Middle East, according to Artisoft, account for 26% of sales. Flaherty expects this to rise to 35%. In the future, Artisoft predicts that about 50% of its revenue will come from outside the US. In December 1991, a subsidiary opened in Japan which has tackled the language barrier head on with software in Japanese. Asia and the Pacific Rim are ripe markets that will soon be explored, according to Flaherty. Ask Flaherty about competition from NetWare Lite and he gives the expected answer – he welcomes the competition posed by Novell Inc’s NetWare Lite, and says that as Novell is considered the premier company in networking, its entry lends credibility to the peer-to-peer market. Usually, this kind of talk would be discarded on the grounds that he would say that wouldn’t he?, but scepticism must be tempered by the big fourth quarter earnings. Flaherty notes with irony that Novell launched NetWare Lite on the same day that Artisoft went public in the US. He claims that NetWare Lite has had no effect on Artisoft’s profits and that it doesn’t match LANtastic in features, Windows being the obvious one. Artisoft spends 4% of turnover on research and development. The $22m raised in the September flotation is in the bank; Artisoft currently has cash and equivalents amounting to some $37m.
