Software wars: this fall

The gloves are coming off in Canada's computer suite software market as the major players gear up for marketing battle during the year's final quarter - typically a hot sales period for computer software products.Earlier this month, newly merged software companies...

The gloves are coming off in Canada’s computer suite software market as the major players gear up for marketing battle during the year’s final quarter – typically a hot sales period for computer software products.

Earlier this month, newly merged software companies Novell and WordPerfect, now known as WordPerfect, the Novell Applications Group Canada, launched PerfectOffice.

PerfectOffice is a family of applications being heralded as Wordperfect’s most significant product launch since the company introduced the initial version of its flagship word processor.

Lotus Development Canada is hot on the heels of WordPerfect with the latest version of its SmartSuite collection of software products, SmartSuite 3.0 for Windows.

Release is scheduled for September.

PerfectOffice and SmartSuite 3.0 will square off against Microsoft Office, which dominates the suite segment with more than 80% of total sales.

Computer suites – groups of software applications sold as a package – are a growing trend in software sales.

According to Nielsen Marketing Research, computer suites saw a 150% rise in dollar sales and 200% rise in volume of units sold for the year ending April 1994.

Suites typically contain several applications, including a word processor, spreadsheet, database and graphics presentation program.

The key selling point is that the combined applications cost about the same as two applications bought separately.

Suite sales in Canada totaled $16 million last year, up $9.6 million over the previous year

Growth should continue

According to industry analysts, there is no end in sight to growth in the segment as competition drives prices down and program upgrades continue to be released.

The market is designed to make adaptations to existing programs a necessity, says John Welsh, a market analyst for Lotus.

‘The challenge for suite manufacturers is to get control of as many desktops as possible,’ Welsh says. ‘Once you have that, the upgrade cycle begins.’

Last year, suite sales accounted for 10% of the $161 million software industry, up 6% from the year before, according to the Nielsen Computer Product Index, which measures dealer sales in Canada.

Industry analysts expect that growth to triple next year as the market continues to gather momentum.

Traditionally, software companies do only limited consumer advertising.

But plummeting suite prices and Microsoft’s new commitment to building a world brand identity are bringing suite advertising into the mainstream.

Stan Weiss, general manager for WordPerfect, says the consumer market is a target for PerfectOffice advertising, which, in the past would have been completely trade-focussed.

Novell, specializing in networking software, is anchored in Fortune 500 companies, while WordPerfect has built a reputation with the home market as well as with large and small business.

Mainstream advertising for PerfectOffice will play a significant role in integrating the Novell name with WordPerfect’s clientel, says Joel Patrick, the company’s product marketing manager for business applications in Canada.

PerfectOffice comprises three separate packages – PerfectOffice Professional, PerfectOffice Standard, and PerfectOffice Select.

The Select package, a sort of do-it-yourself suite, will be showcased in product advertising.

Custom suites

Select allows the buyer to create custom suites by selecting from an array of WordPerfect products as well as from applications outside the WordPerfect family.

Novell and WordPerfect merged to better position themselves to compete against Microsoft.

PerfectOffice is the first suite product produced by the merger.

Lotus’ SmartSuite 2.0 has a 12% share of the suite market.

According to Marsha Conner, director of advertising for Lotus, the company’s marketing plans for SmartSuite 3.0 will feature an increased consumer advertising component.

‘We have consistently advertised outside Canadian trade publications, but will there be more of that?’ Conner asks. ‘Absolutely. Our advertising is in the process of increasing.’

Lotus’ flagship spreadsheet program, Lotus 1-2-3, has the lion’s share of the spreadsheet market and is the signature software that sets Lotus apart from other suites.

SmartSuite 3.0 contains upgraded versions of 1-2-3, Approach, which is a database program, Ami Pro, a word processor and Freelance Graphics.

Conner says organizer, a day-timer program, is an addition to the package that meets a need in the market and acts as a sort of value-added selling feature.

Microsoft’s plan to build a worldwide brand identity includes increased consumer-oriented marketing of its family of suite products.

According to Al Saplys, Microsoft product manager for desktop applications, Microsoft Office and upgrades of the Office suite will be marketed to a mass audience.

‘We’ll be going into areas we haven’t been highly exposed to – we’re going to a much broader audience,’ Saplys says.

‘With the large number of people working from home, Office is a very good fit there, so we’ll be marketing it as a strategic thrust in terms of marketing desktop business,’ he says.

Last month, Microsoft picked Wieden & Kennedy, of Portland, Ore., to handle its estimated $40-million worldwide consumer branding account.

According to Saplys, the details of how the new campaign will work in Canada have yet to be determined, but Microsoft Canada plans to continue its 18-month-long relationship with Chiat/Day.