SPOTLIGHT

ActiveState targets paint-by-number programmers

By NATALIE SOUTHWORTH
From Thursday's Globe and Mail

Vancouver — ActiveState Tool Corp.'s goal is simple: to establish a dominant market presence by giving away software tools that allow intensive computer users to become paint-by-number programmers.

"Our goal is to empower more people to do the work themselves so they don't have to go to programmers. We want to lower the bar so a broader group of people can use the technology and manipulate information," says chief executive officer Dick Hardt, who founded the privately owned Vancouver company in 1997.

But giving away open-source software — which anybody can sell and no one in particular owns — has a major profit potential.

The company is aiming for three revenue streams: selling services to those who download its software from the Internet; selling tailored versions with more advanced features; and creating a mass market that will prompt big technology firms such as Microsoft Corp. to pay ActiveState to ensure its programs are compatible with open-source software.

Mr. Hardt says his vision depends on the evolution of open-source software, which his company packages for the general public, offering support services as well. It specializes in computer programming languages such as Perl and Python, and aims to make them accessible to people who aren't computer programmers.

Perl is the most popular Web programming language and is currently used by such companies as Amazon.com, MP3.com and Deja.com to run their Web sites. It has become a popular language for building Internet applications, and is useful for combining smaller programs into larger applications.

Targeting people who work with computers but who aren't programmers — such as data analysts, software testers and Web masters ActivePerl comes with telephone support and developer tools, such as an "editor." This feature highlights mistakes made in a user's work — similar to the squiggly line that appears under spelling mistakes in Word documents.

"In the past, when programmers had a problem, they had to figure it out themselves, or look up a solution in a book. That took time," Mr. Hardt says.

According to ActiveState, about one million software developers are using Perl, the Internet's most popular programming language, which has been downloaded 4.5 million times. ActivePerl accounted for three million of those downloads, the company says.

Over the past year, ActiveState has had an average of 400,000 unique visitors a month at its Web site, and provided 1.5 million downloads of its applications.

Last summer it signed a three-year, $1-million (U.S.) agreement with Microsoft to ensure that Perl and Python continue to work with Microsoft technology as the languages evolve.

It says its role in the Microsoft deal is to integrate Perl with the Windows operating system by adding some new features that improve the programming language. The agreement gives ActiveState the chance to have its name, products and services noticed by software developers creating programs for Windows -- an influential group.

Because much of what the company creates is offered for free on its Web site, ActiveState generates revenue from companies, such as Microsoft and Dell Computer Corp., which pay to include a branded version of ActivePerl in their software packages. Other clients, such as Starbucks and Intel Corp., offer ActiveState's technical support resources to their in-house programmers.

ActiveState generated revenue of $1-million in 1999 and $3-million in 2000. Mr. Hardt says the company expects to triple sales to $9-million this year.

Eric Manning, a computer science professor at the University of Victoria, says ActiveState has recognized that the ability to manipulate more types of information will be a valuable skill as computer languages become more compatible through open-source software.

For instance, people who book travel packages on-line could use ActiveState's programming tools to create simple software that retrieves the weather, tourist information and hotel vacancies all at once, he says.

However, Prof. Manning adds that "helping users do their own programming is an old idea."

At one time, only programmers could use spreadsheets, since they were far more complicated than today, he says. "Users are gradually becoming empowered, but I don't think programmers are going to be put out of business. There is a lot of mileage left in empowering users, but how much is hard to say."

One way to build these skills is through free, easy-to-use tools that target open-source software, says Mary Cicalese, a senior analyst at Jupiter Communications.

However, much of the success depends on a force far beyond ActiveState's reach. "There is the opportunity for numerous software applications for businesses and consumers," she says. "The success depends on the level of sophistication of the user."

In addition to offering programming tools to a wider group of users, the company is developing other languages besides Perl and Python, such as Tcl, a scripting language that is popular with content management companies; and PHP, which is used heavily in building Web sites.

ActiveState Tool Corp., Vancouver

What: Develops and provides open-source software programming tools for a number of different computer programming languages.

Founded: July, 1997

Employees: 70

Revenue: $3-million in 2000

Principals: Dick Hardt, founder and CEO; Steve Munford, vice-president of operations

Venture capital invested to date: $2.5-million (U.S.) last year.

Investors: Opticality Ventures

Key strategy: To create a mass market by giving away software tools that allow intensive computer users to become paint-by-number programmers, and thereby prompt big technology firms such as Microsoft Corp. to pay ActiveState to ensure its programs are compatible with open-source software.

Key challenge: The success of the company's key strategy depends a great deal on the level of sophistication among computer users.