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NEWS FEATURES |
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By Steve
Kayser One of the most
celebrated events in American business is the
initial public offering (IPO). Many see it as a
transforming event that ensures a company's
long-term survival, signifies an arrival into the
business big leagues, and creates wealth -
sometimes almost unbelievable wealth.
Currently, in the U.S., there are approximately
17,000 public companies. So, why would a
company actually choose to remain a private
company? Believe it or not,
there are many good reasons not to go public, and I
offer for consideration some real-world insights
that may cause you to reconsider, or at least
pause. Many people question whether or not a
private company can actually compete against a
public company. We have been doing
it for decades. Our company, Cincom Systems,
is a privately held software company that was
founded in 1968. We have thousands of customers on
six continents and specialize in providing
software, services, and hosting to simplify the
management of complex business processes. Cincom
employs over 1,100 people worldwide and competes
with companies like Oracle, SAP, Siebel, and
others. Cincom has
generated over $3.5 billion in sales and achieved
20 straight years of producing over $100 million in
revenue - a feat ma This never hurt us
when competing against our well-branded and
publicly funded competitors in the industry.
In fact, it helped us to develop innovative,
flexible, and adaptive ways of thinking along with
well-honed and passionately articulated value
propositions. We have continued to pioneer
software innovation in our rapidly changing
business environment. Surrounded by
well-financed competitors, Cincom has an impressive
list of "firsts" in the software industry. In
1984, President Ronald Reagan hailed Cincom as "the
epitome of the entrepreneurial spirit of American
business," and we're recognized by the prestigious
Smithsonian Institute as one of "the pioneers and
builders" of the software industry. When compiling
reasons not to go public, one stands out above all
the others: freedom. Remaining a
private company gives us the freedom to make
decisions based on the needs of our clients, not
the demands of the shareholders. It helps us
to make bold business decisions and to create
innovation by acting on these bold decisions.
We are free from excessive regulatory burdens and
free to adjust to changes in the business
environment as we see fit. By avoiding the
lure of public financing, we are free to control
our own destiny. Another clear
advantage of remaining a private company is that it
is much easier to create a unique corporate
culture. If you value loyalty, a fair balance
between work and family, and community involvement,
then you are free as a private company to promote
and reward these values. At Cincom, we have
created a unique, family-oriented atmosphere that
encourages openness and a sense of ownership in the
organization we call the
"Cincommunity." For this reason, we
have attracted an incredibly loyal and committed
team, with very low turnover. At the
senior-management level, it is not unusual to have
25 years of tenure with Cincom. Additionally, our
customers remain astoundingly loyal because we base
our decisions on customer rather than shareholder
needs. Ultimately, what has made Cincom successful
is being a customer-driven organization. As a
result, we have an extremely high average tenure
among our clients, some as long as 30
years. For almost 40
years, we have shown that it is possible to run
with "the big boys" as a private company, and we
will continue to innovate the software business for
decades to come. For now, it is clear that an
IPO is a "no-go" for us. For more
information or to set up an interview with Steve
Kayser for a story, please contact Jay Wilke at
727-443-7115, ext. 223 or at For more
information on Cincom please see www.cincom.com
jayw@event-management.com. About Cincom:
Privately held Cincom Systems sells both strategic
enterprise software products and support
capabilities for clients looking to develop
applications internally. The company competes
directly with global giants like Oracle and SAP by
offering comparable products at a fraction of the
cost and deployment time. To help clients
consolidate their vendor channels, the company now
offers hosting, outsourcing, and other IT services,
again at a lower price. The company's sales network
was built around marketing partnerships, and new
relationships are continually pursued. Asia is
viewed as a key growth market. ROIC has averaged
80% over the last decade while earnings have grown
700% in five years. Management is seeking expansion
opportunities. Thanks very much
for your time, Jay
Wilke Event Management
Services, Inc. 1127 Grove Street,
Clearwater, FL. 33755 727-443-7115 ext.
223 http://www.event-management.com |
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Attention
Investors in Africa
tched
only by one other software publisher in the world,
Microsoft. Throughout our 37 years, we have
steadfastly remained a private company. We've never
accepted any form of financing from venture
capitalists or other equity investors. Throughout
the history of the company, all of our financing
has been through cash flow and when necessary, debt
financing through banks.