Delrina Corporation was a Canadian software company active from 1988 to 1995. The company was best known for WinFax, a software package which enabled computers equipped with fax modems to transmit copies of documents to standalone fax machines or other similarly equipped computers. It also sold PerForm and FormFlow, electronic form software. Delrina was acquired by the American software firm Symantec in 1995.
Delrina also produced a set of screensavers, including one that resulted in a well-publicized lawsuit for copyright and trademark infringement (Berkeley Systems Inc. v. Delrina). The case set a precedent in American law whereby satiric commercial software products are not subject to the same First Amendment exemptions as parodic cartoons or literature.
It also sold online communications software with its WinComm product and produced a Web browser called Cyberjack. The firm was sold to Symantec in 1995. After the company was acquired by Symantec, various divisions were sold off and several of Delrina's former executives went on to found venture capital firms.
Corporate history
Delrina was founded in Toronto in 1988 by Zimbabwean expatriate Bert Amato, South African expatriates Mark Skapinker and Dennis Bennie and American Lou Ryan. Delrina was Bennie's third major entrepreneurial start up after co-founding Mission Electronics, a high-end home entertainment equipment producer, and Aviva Software, which became Ingram Micro Canada. Delrina's business strategy was to "establish technical and market leadership in niche markets", which it accomplished with its electronic form and PC-based fax software. A year before the firm was incorporated, Amato and Skapinker had quit their jobs to start work on an electronic forms product which would eventually become PerForm. Both would later meet with Bennie, who was then the co-founder and CEO of Ingram Micro Canada before becoming CEO of Carolian Systems International, a firm that made business software for Hewlett-Packard. Bennie facilitated an initial seed investment of $1.5 million CAD to finance a new start-up company, "Delrina", to develop this idea. In return, Carolian received 51% of Delrina's shares, Dennis Bennie would become chairman and CEO, Mark Skapinker President, and Bert Amato CTO of newly formed Delrina Technology Inc.
Delrina's initial corporate headquarters was located in a small office on Mount Pleasant Rd. in Toronto. A sales office was set up in San Jose, California which became its worldwide sales center run by co-founder Lou Ryan. From its Toronto headquarters, the company expanded by establishing branch offices in Kirkland, Washington; Washington, DC; and Lexington, Massachusetts. Other offices were later established in the United Kingdom, France, and Germany.
Origins of PerForm
Delrina's initial product offering was an electronic forms application called PerForm. Amato and Skapinker came up with the idea for the product while working as consultants that what their clients wanted was a way to fill in forms electronically, rather than an easier way to create paper-based forms from a computer. There was significant and long-term uptake of electronic forms products within governmental agencies both in Canada and the United States, the latter spurred on in particular by the requirements of the Paperwork Reduction Act to reduce the total amount of paperwork handled by the United States government. One of the firm's early major software deals included a multi-year agreement to sell PerForm to the U.S. Navy in 1990. Soon after the software was installed on Compaq laptops that accompanied U.S. troops during the First Gulf War, where it was used to requisition "everything from Coca-Cola to privies". Other significant volume sales went to 3M and Rockwell International. What helped set apart Delrina's electronic forms from its competitors in product reviews included its easy-to-use interface, its extensive development tools, and its comparatively low price. It also scored highly when it came to workflow and routing functions as well as security features. In early 1991 InfoWorld selected PerForm Pro as its "Product of the Year" in the electronic forms category, and PC World Magazine gave the product its "Best Buy" designation. PerForm proved to be successful in its niche, effectively capturing the retail market by 1993.
In the early 1990s Delrina made deals with value-added resellers like NCR and GE Information Services who had the staff to customize the product to the needs of corporate customers looking to move away from paper-based forms. The forms products sold well and the annual revenues for the firm grew steadily; 1989 annual revenues (in Canadian dollars) were $5,630,393, in 1990 they were $8,759,623, and by 1991 they were $11,894,474.
Struggle for profitability Despite the growing revenues, the company struggled to make a profit. Heavy expenditures—primarily marketing along with research and development costs—drove the firm's losses from $500,000 from 1989 to $1.5 million by the end of the following fiscal year. For fiscal 1991 it posted a net loss of $1.7 million.
Needing an infusion of funds, in April 1991 Bennie managed to raise $7.7 million in a private placement.
The firm subsequently sought to find ways to more widely distribute its electronic form software, with Bennie saying in May 1992 that "we've barely scratched the surface of our market".
In early 1992 word leaked to the press on a possible merger between WordStar International Inc., and soon after both firms made public the fact that they had signed a letter of intent on a merger deal. However, just over a month later word came out that the merger talks had fallen through, at the time cited to differences over "complex legal, accounting and management issues". WordStar, whose share of the word processing market had by that time fallen to 5% (from a high of 80%) was seeking Delrina's advanced technologies while Delrina was hoping to utilize the other firm's established global sales network. Despite the failure of the merger talks, Bennie said soon after that "we're still convinced that a larger sales force would give us the kind of marketing clout we need. I still believe that it's possible for us to become a global operation". Not long after WordStar merged with Spinnaker Software Corporation and SoftKey Software Products Inc. to form SoftKey International. Delrina subsequently signed deals with Wallace Computer Services, UARCO and NCR Corporation in an effort to gain greater sales distribution of its products.
Development of WinFax
In a deliberate attempt to diversify the business, The Company chose to move into the fax software market with its WinFax product. Software developer Tony Davis (another South African expatriate who had moved to Canada) was initially hired as a consultant to work on the forms line of products in the late 1980s, soon afterwards becoming part of that team. In his spare time he developed a prototype of what would become the first WinFax product, with the agreement that Delrina would be its publisher. In 1990 Delrina devoted a relatively small space to this new product at that year's COMDEX (a computer trade show), under a sign that said simply: "Send a Fax from Your PC". It garnered the most attention of any Delrina product being demonstrated at that show. This interest convinced the founding partners of the commercial viability of the product. Tony Davis went on to sell his product idea to Delrina, and stayed on as its lead software architect and designer.
The initial version of WinFax only worked on fax modems containing a specific chipset, and was only capable of sending faxes; it could not receive them. This was remedied with the launch of the WinFax PRO 2.0 product during the summer of 1991. One of the key factors that differentiated this version of WinFax from other fax software packages of the time was the deliberate attempt to make the program compatible with all fax/modems. Prior to the introduction of WinFax PRO 2.0, competitors concentrated primarily on building software that would only work with a single brand of fax/modem hardware. At the same time that it launched its WinFax PRO 2.0 product, Delrina also announced an OEM version of the same product designed to be bundled with new fax/modems. Within a few months, eight modem manufacturers had agreed to bundle this OEM version (called "WinFax LITE") of the program along with their own product. By the summer of the following year this number had grown to 50 OEM partnerships with various fax-modem and computer system manufacturers to bundle the "LITE" version of Delrina's WinFax software with their own products. By February 1993 this number had grown to over 100 OEM partnerships.
Bundling the LITE version of WinFax proved to be lucrative for Delrina. Whenever a person used the program for the first time and submitted their registration information by fax to the company, Delrina would subsequently mail the user an upgrade offer for the PRO version. This sales technique proved to be very effective, and the firm ended up making most of its sales from these upgrades.
In order to reach Apple computer users in this marketplace Delrina acquired Solutions Inc. and their BackFax software for the Macintosh platform in December 1991, which would become "Delrina Fax Pro". A version of the program was also designed for use in DOS ("DosFax PRO") which was launched in June 1992.
Initially looking for ways to further improve its electronic forms software, in November 1991 Delrina had attempted to buy two associated firms that produced Optical Character Recognition (OCR) software, with the intention of incorporating OCR functionality into its forms products. The acquisition deal fell through, though by Fall 1992 Delrina had made a deal with Caere Corporation to include its AnyFax OCR software within its products. This functionality was incorporated into WinFax PRO 3.0 in late 1992, and subsequently in FormFlow Despite the agreement with Caere, the subsequent version of WinFax used Xerox's TextBridge OCR engine instead.
Based on strong sales of WinFax, by October 1992 Delrina posted its first profitable quarter in three years. At the same time, the firm also announced its intention to acquire other software firms that sold into the consumer software market.
Acquisition of Amaze Inc. In October 1992 Delrina acquired Amaze Inc., based out of Kirkland, Washington. The firm created daily planner software, providing time management features while providing some humour by featuring licensed cartoon strips like Cathy, Bloom County, B.C. and The Far Side. The firm became a wholly owned subsidiary of Delrina in a deal which also paid down Amaze's $3 million (U.S.) debt and placed two of the firm's directors on Delrina's board. These two individuals were Rowland Hanson, former VP Corporate Communications for Microsoft and George Clut.
Berkeley Systems Inc. v. Delrina
One of Delrina's screensaver products was based on the licensed Bloom County characters Opus the Penguin and Bill the Cat. The initial Opus 'n Bill screensaver, launched in 1993, landed the company in court as its Death Toasters module depicted Opus taking shots at a number of flying toasters, a well-known emblem in Berkeley System's Flying Toasters module from their After Dark screensaver. Berkeley Systems sued for copyright and trademark infringement. The following court case of Berkeley Systems Inc. v. Delrina was fought by Delrina on the basis that a software-based parody should fall under the same First Amendment protection offered to the press.