Reprint of article in May 1986 issue of "Triangle Business"
Bucking the anti-entrepreneurial trend
by Bill MorrisThey're saying it everywhere these days from Silicon Valley health clubs to New York business magazines. It goes something like: "The era of the high-tech entrepreneur is over." Megamergers are the order of the day. The best example of backstreet-to-Wall Street success - Apple Computer - no longer has room for either of its whiz-kid founders.
Meanwhile, over on Munford Road in Raleigh, a 4-year-old high-tech company is bucking the trend. Homegrown Digital Software, Inc. is proving that having a better idea is still a heck of a way to build a successful company.
Norman E. Smith is president of Digital Software. His product, Dimension-II is a computer-aided design and drafting system. Better known as a CADD, it essentially automates many drafting and calculation functions, improving the productivity and profitability for engineering firms. Digital Software is sitting in the middle of a market that's pegged at more than $5 billion per year and growing rapidly. Its competitors include some well-known names, including IBM and Hewlett-Packard, and some lessor-known names, such as Intergraph and Computervision. Lessor known, but not unknown: Last year, Computervision. had $1.3 billion in sales.
Digital Software has a two-fold plan to succeed in the face of such stiff competition. It is focusing on civil engineering firms as a target market and using the latest in computer technology to offer customers superior price and performance.
Smith's decision to concentrate on civil engineering goes back to Moore, Gardner & Associates, a large civil engineering firm based in Asheboro. Smith was transferred into the computer room as programmer in 1972 where he became head of data processing a year later. In 1979, he left Moore, Gardner and began Digital Software Tools, a consulting firm.
Specializing in civil engineering CADD seemed a natural. In 1981, Digital Software sold its first complete system - Dimension-II - to Peirson & Whitman, Inc. of Raleigh. Peirson & Whitman's president, Troy Doby, was an early believer and investor in Digital Software. Today with four Dimension-II CADD workstations and four more on order, Doby remains a believer: "This past year was the first year we were producing all our drawings on the CADD, and our labor costs dropped from 48 cents to 34 cents per fee dollar."
Although Digital Software has sold systems to firms in Utah and Saudi Arabia, the company puts its emphasis on the Southeast. "Someday we'll be a worldwide company," Smith said. "But right now, we only have 10 employees, and we need to be smart about how we expand."
Smith says he's gotten a lot of his drive from the military, growing up as an Air Force brat in Germany, Morocco and the Philippines. His father, the late Col. Justus W. Smith, was highly decorated in World War II. Col. Smith was attached to the famous Merrill's Marauders in Burma and later served as deputy director of the Berlin Airlift and communications director in Vietnam. During the Cuban Missile Crisis, Col. Smith was Chief of Communications and Electronics at Fairchild AFB, a large Strategic Air Command B-52 base in Washington State.
"Growing up all over the world definitely helped me," Norman said. "I feel comfortable talking to just about any type of person or tackling new things. I was born into an Air Force world of high technology and electronics. That's one of the reasons this company is a success."