Virage Then And Now

And, in this uncertain IT market it is easier to sell into an existing customer base than to acquire a new customer. Autonomy is a company full of mature products and technologies and Virage offers customer base waiting to be "up-sold" additional media and video management tools.

A benefit for Virage, which has announced that it will continue to operate as an independent division of Autonomy, is that Autonomy has a very active research and development program. Autonomy has just closed its fourteenth consecutive profitable quarter of operations. "Our R&D spending is up around 40% of revenues over the past two years," says Marubio. "We have the engineering resources and a deep understanding of search and organization of unstructured information to take Virage to the next level for our customers."

Marubio says one of the first tasks will be to replace licensed third party technologies, such as the Verity search engine, with the Autonomy search technologies. "We envision the future in which customers will buy the Virage platform powered by Autonomy technologies," she predicts.

Judging from Virage’s July 22 earnings announcement, the reason for the timing of the acquisition is clear. The company’s statement reports that revenues in first quarter 2003 fiscal year ending June 30, 2003 dropped to $2.9M and in the same quarter the company’s cash reserves were depleted by $3.3M. There was no time to waste.

With new resources and the support of Autonomy, Virage’s executive team will have the opportunity to take a few months and revisit its strategies from A to Z. Share holders, go-to-market partners, customers, and the streaming media industry at large should reap the benefits. If the execution of the deal goes smoothly, Virage might have some new ideas and exciting demonstrations to show at the StreamingMedia Fall 2003 conference in October.

I, for one, look forward to learning what the five year anniversary of "intelligent video" brings.