Executive Summary

Led by new local powerhouse CUC Software, sales were up nearly across the board for L.A. County’s 25 biggest software companies.

The expansion comes while the local industry faces a major change in emphasis. While in past years local firms have concentrated mainly on business software companies like No. 7 MacNeal-Schwendler Corp., for example, which makes products for engineers 1996 marked a major shift toward consumer software.

Aimed at the home computer market, small businesses and schools, consumer software accounted for 47 percent of the combined revenues of the top 25 L.A. County companies in 1996, compared to 26 percent in 1995.

The growing market for multimedia education and entertainment software reflects the availability of inexpensive and faster computers over the last few years.

The future for educational software developers looks particularly bright, now that computers are becoming more and more a standard feature of the classroom as well as the nursery. But heavy competition is causing numerous business failures in the CD-ROM game industry.

The Pacesetter

CUC Software

Chief Executive: Chris McLeod

From its 378,000-square-foot facility in Torrance, CUC Software, a division of CUC International Inc., oversees one of the largest educational software groups in the world.

The parent company is a Fortune 500, publicly traded firm whose core business is selling memberships to various discount programs. Its foray into the software business began in February 1996 when it bought the burgeoning educational software company Davidson & Associates in Torrance.

Later, CUC would acquire a string of game and educational software companies stretching from Irvine to Bellevue, Wash. namely Glendale-based Knowledge Adventure Inc., Blizzard Entertainment and Sierra On-Line. CUC International, meanwhile, has announced its intention to merge with HFS Inc. The new company will be named Cendant Corp.