MicroStrategy was founded in 1989 by Michael Saylor
(CEO), Sanju Bansal (COO) and Thomas Spahr as a consulting firm focused on
multidimensional modeling and simulation. The idea of modeling business
with non-linear mathematics was inspired by a system dynamics theory class
that Saylor and Bansal took at MIT. Michael Saylor started MicroStrategy with a
consulting contract from his boss at Du Pont that provided him with $250,000
and office space in Wilmington, Delaware. The company’s early
focus was on data mining software for businesses.
In 1994, Saylor and Bansal moved the office to Tysons
Corner, Virginia and the company grew quickly in the years
following. MicroStrategy had its Initial Public Offering in June 1998
with an initial stock offering of 4 million shares priced at $12
each. MicroStrategy’s company slogan at the time of the IPO was
“Information Like Water”, emphasizing its focus on making business information
ubiquitous and readily available both inside and outside the workplace. Its
customers at this time included those in industries such
as retail, telecommunications, finance, insurance, pharmaceuticals,
and healthcare. Examples were ACNeilsen, CVS/pharmacy,
and Xerox Corporation.
MicroStrategy’s tremendous growth in its early years as a
public company – nearly doubling its revenue annually – often put the
company (and their CEO Michael Saylor) in the spotlight. Saylor made media
appearances in Fortune Magazine, on the Charlie Rose show, and
on 60 Minutes. He was also interviewed on CNN and invited to the White
House.
In March 2000, the U.S. Securities and Exchange
Commission charged the company with overstatement of revenues and stated
profits that were actually losses. Michael Saylor (CEO), Sanju Bansal (COO),
and Mark Lynch (former CFO) settled with the SEC later that year without
admitting wrong-doing and the company paid $10 million in disgorgement.
Cease-and-desist orders were issued to two accounting employees for reporting
and recordkeeping violations. The company stated its intention to undertake
changes in corporate governance to ensure compliance with securities
laws. The company’s stock dropped 61% on March 20, 2000 to close at $86
per share, and lost over 90% of its value within a few weeks. A 10:1
reverse stock split in July 2002 reduced the number of outstanding common
shares.
Though the burst of the tech bubble also proved an
obstacle in 2000, the company continued to grow quickly afterwards, increasing
its revenues and releasing new products like dynamic dashboards. By 2003,
MicroStrategy began to recover the losses that resulted from this case and the
burst of the dot-com bubble, adding over 200 new corporate customers and
raising its revenue by 23% in the fourth quarter. The company achieved this by
cutting unprofitable business units and focusing on improving its software
platform. Since then, yearly revenues have grown steadily and the company
has continued to develop its product line and expand its size by hiring new
employees.
Also in 2003, MicroStrategy defeated a patent-infringement
suit brought against the company by Business Objects for a “relational
database access system using semantically dynamic objects.” Cognos
and Brio Technology were also sued by Business Objects for the same
patent, but settled out of court for $24 million and $10 million, respectively.
It was ruled that the technology and concepts of MicroStrategy’s products and
those of Business Objects had substantial differences and there was no
infringement on the patent.
In June 2008, MicroStrategy celebrated its 10-year
anniversary as a public company and the “leading independent provider
of open systems business intelligence software”. Its annual revenues grew
over those ten years, from $96 million in 1998 to $351 million in 2008, and the
employee base grew from 907 to 1,582 in that same time.
By 2009, MicroStrategy’s revenues had exceeded $377 million
and the company had offices in more than 20 countries worldwide.
Revenues grew to a record $454.6 million in 2010, a 20%
increase over 2009’s revenues. This consisted of a 24% increase in product
licenses revenues and a 19% increase in revenue from product support and other
services. In MicroStrategy’s 2010 Annual Report, the company stated a total of
2,597 employees. Of these, 1,347 were U.S.-based and 1,250 were internationally
based. Over 700 new employees were added in 2010 alone.
In 2010, the company announced a move of its headquarters
into the newly built 1850 Towers Crescent Plaza building in Tysons Corner,
Virginia.
