Idion Technology Holdings had to endure a great deal of controversy and criticism when it bought US-based information management company Vision Solutions for $54.5 million last year. Vision was a loss-maker and several analysts said Idion paid too much.
There was also a great deal of publicity involving the resignation of CE Nicolaas Vlok`s father, Marius, from the Idion board because he did not believe in the value of the deal.
However, Idion is now saying that the critics have been proved wrong, with Vision experiencing a storming fourth quarter and achieving extensive recognition in the marketplace. After staging a noteworthy turnaround, Vlok is confident that the company is well positioned for future growth.
Based in Irvine, California, Vision`s products and services are marketed worldwide through a direct sales force and a network of business partners and distributors, including IBM. Vision has been named a Deloitte & Touche Fast 50 company for four consecutive years, a feat none of its competitors have managed to achieve. It was ranked 33rd in Deloitte`s Orange Coast Fast 50 for 2000.
It has also grown faster than its direct competition over the past five years, showing revenue growth of 355%. Competitor Lakeview Technology has grown its revenue 231% over the same period.
According to a survey by Dun & Bradstreet, 44% of the Fortune 100 companies use Vision`s enterprise software. Vision has a total of more than 1 500 customers worldwide, and has sold more than 4 000 licences in 40 countries.
Alliances and partnerships
The company has a strong IBM relationship. It is a premier business partner, is part of IBM`s B2B Extreme Team, an iSeries (AS/400) clustering partner and an all-star partner in development. A Microsoft-certified solutions provider and JD Edwards alliance partner, it also has strategic alliances with Compaq, Informix, Oracle, Sybase, Baan, ALE and Progress.
Vision helped Idion generate about 89% of its revenue offshore in the 10 months to December 2000. The subsidiary turned from a net operating loss of $690 000 before amortisation and tax in the nine months to end-December 1999 into a net operating profit of $4.8 million for the same period in 2000.
Vision defines its business, information ability, as the "continuous, uninterrupted access to critical business information, systems and applications, in the state and format needed by an enterprise".
An International Data Corporation survey in 1999 showed that US companies lost $4 billion in 1998 due to unplanned downtime. Vision`s products are designed to ensure mission-critical information remains available.
Vlok says Vision`s significant revenue increase and return to profitability is the result of an increased demand for its products, continued product enhancement and innovation, a dedicated approach to sales and marketing, a focused approach on customer support, a disciplined approach to cost management and the dedicated commitment of the strengthened management team.
Vlok is buoyant about Vision`s turnaround. He says there were sceptics at the interim stage who believed the company`s progress could not be sustained, but Vision is now coming through with solid growth.
Time will tell
But several analysts are not yet convinced. One says Vision`s turnaround is remarkable, but it is still too early to tell whether its comeback will be sustained, particularly in the light of very difficult conditions and market volatility in the US.
Vlok admits that the slowdown in the global economy remains a concern, but says he is still confident that the company is positioned to weather the expected difficult conditions. He believes the Vision acquisition was made at the right time, and is also counting on the fact that a strong management team has been put in place at the company. Vlok is adamant that Vision is doing what it needs to do to face the storm.
The pressure is now on for Vision to deliver on the promises. If Vlok is wrong, the market is unlikely to be merciful, particularly as the Idion share has been susceptible to general negative sentiment in the past, mainly related to Nasdaq falls. The company`s potential is there, as evidenced by the widespread industry acceptance of the its products and by the many awards it has received. With the right management, which Vlok believes is now in place, Vision may well become the jewel in Idion`s crown. If Vlok is right, and its growth is sustained, he would no doubt enjoy having the last laugh.
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