Microsoft to Acquire Visio

On September 15, 1999, Microsoft announced plans to acquire Seattle-based Visio Corporation (http://www.visio.com), a noted developer of graphics applications and visual programming tools. With the addition of Visio’s acclaimed technical drawing software, Microsoft hopes to strengthen its line of business productivity tools and add significant functionality to its Microsoft Office suite of products.Visio has had success creating enterprise-level business diagramming, technical drawing, and visualization software. Visio cofounder Theodore Johnson said the company’s purpose was "to move drawing out of the drafting department in the same way that Word moved word processing out of the secretarial pool." Its products, intended largely for in-company use, emphasize ease-of-use and clarity over splashiness, giving non-specialists tools to express relatively complex concepts with easily digestible images. The company’s Visio Enterprise 5.0 is a suite of development tools that aid in the creation and management of information systems, including tools for mapping network topologies. Visio’s general software suite, Visio 2000, includes tools to help knowledge workers organize and present their ideas visually. Analysts have described Microsoft’s business productivity line as weak on the visual side. The company’s acquisition of Visio will provide its Office 2000 line with much-needed visual power. Microsoft is currently planning to launch Visio 2000 as an independent product.Visio rose to prominence in the Windows developer community offering its Visio graphics product as an easy-to-use combination graphics/CAD program. Visio software’s intelligent shape technology, extensive library, and almost seamless integration with Microsoft Office made it favorite third-party application within Microsoft. When asked how best to interoperate with Microsoft Office, Microsoft developers have frequently cited Visio as an example. The company was among the first to integrate its software with Microsoft’s Visual Basic for Applications; Visio 2000 will be among the earliest available products optimized for Windows 2000.According to Visio sources, the company’s revenues were $166 million for fiscal year 1998. Visio claims 2.5 million seats at about $180 a seat. Microsoft will exchange 0.45 shares of its stock for each share of Visio stock in a deal valued at roughly $1.3 billion. Visio will become the Visio Division in Microsoft’s business productivity group, and President and CEO Jeremy Jaech will become vice president under Microsoft Senior Vice President Bob Muglia.