Aristotle Industries Inc., part of an emerging industry that develops personal-computer software for political campaigns, has agreed to acquire part of ITT Dialcom of Silver Spring, one of the largest providers of computer services for Congress.
For Aristotle, which is moving its headquarters to Washington from Norwalk, Conn., the merger fits into its plans to expand from an entrepreneurial software house into an international political information services company.
The move also highlights the emergence and swift growth of a new Washington-area industry -- campaign software for personal computers. Aristotle is one of a handful of young companies pushing the personal-computer (PC) revolution into campaign headquarters.
Already, Aristotle has about 1,800 clients, making it the largest vendor of PC campaign software. "Democracy is a growth business," John Aristotle Phillips, founder and president of the firm, observed. Candidates' Clutter Cut
Candidates for offices from the level of school boards to the U.S. Senate are starting to use desktop PCs to clear the clutter of paperwork, file cabinets and 3 x 5 cards that has characterized the chaos of a traditional election effort.
Instead, the new software companies help politicians use compact, high-speed PCs to communicate with donors, organize volunteer activities, schedule candidates and manage finances.
Volunteers who once would have spent hours in the campaign headquarters copying lists of names, typing mailing labels or filling out federal financial reports can be freed by a computer to spend more time walking precincts or phoning voters, the software vendors say.
"It used to all be done by hand on paper," said Dan Frahm, president of Campaign Software Inc., founded in June 1983 and based in the District. A computer "makes it 10 times easier."
The use of PCs in campaigns "is just beginning," said John Brady, president of the Brady Group, an Alexandria firm that started developing political software in August 1983. The industry "is in the infancy," he said.
Large, powerful mainframe computers have been used for decades to manage voter lists, mass mailings and other tasks for political parties and candidates. But now PCs can put increasingly affordable and sophisticated computing power onto the desktops of the smallest campaign, or can be linked into a network to serve statewide election efforts.
Aristotle's acquisition of Dialcom's congressional services division, for an undisclosed amount, combines the two levels of computer services. Mainframe Computers Used
Dialcom operates mainframe computers in Silver Spring that are much larger than the desktop PCs leased to members of Congress and political associations on a time-sharing basis. About 170 clients, primarily in the House of Representatives, use Dialcom's services to handle constituent mail and other office tasks.
"Aristotle Industries is in the business of helping congressmen get elected: ITT Dialcom is in the business of helping congressmen stay elected," said Dana Mitchell, a Dialcom manager.
Another local company is expanding in a way that mirrors Aristotle. Public Office Corp., based in the District, has provided mainframe time-sharing computer services to members of Congress, unions, political associations and businesses since it was founded in 1978. Now it is about to start marketing a software package for use on minicomputers, which pack more computing power than a PC and less than a mainframe.
Both companies' expansion plans reflect the quick evolution of the political information industry.
Phillips describes PC software sales as "the engine" of his company's growth. But the Dialcom acquisition is part of his plan to "position the company as a premier marketer of information services to elected officials." Merger Created Integrated Firm
The merger "creates an integrated company with the firepower of a very sophisticated mainframe, research and development talent, a customer list that includes a majority of members of Congress, and revenues of several millions," said Phillips, who used a PC in one of his two unsuccessful bids for a congressional seat.
His victorious opponent will be one of his clients through Dialcom.
The companies in the PC field are young because the market is fairly new. PCs have been around since the late 1970s, but sales did not take off until 1982.
Since then, the machines have proliferated in homes and businesses as a tool for managing information, finances and other tasks.
PCs started penetrating campaign organizations as the costs dropped and the computing power grew, making them economical for campaigns with limited time and money.
Another factor, experts say, is that people today are generally more familiar and comfortable with computers. A volunteer who plays on a PC at home or at work can easily sit down to use one at campaign headquarters.
"Finally, people have taken it as a given that a computer is a helpful tool," said Frahm, who first used his own PC as a student volunteer for a 1982 congressional campaign. "A few years ago, the technology wasn't there, people lacked experience with computers . . . and the software was in development. Now, there has been enough good experience that people see (PCs) are clearly cost effective."
The use of PCs in campaigns is "just beginning," said John Brady, a political consultant who began looking for political software for his clients in 1982. "It is not the case that everybody is using PCs. . . . We are at least two to four years away from assessing the impact of PCs on politics."
CSI and The Brady Group both sold their first PC software packages for the 1984 campaigns, and have updated their products since. Aristotle, founded in 1977, sold its first package in 1983.
The potential market is likely to attract "a dozen" new competitors this year, Phillips said.
About 500,000 elected public offices open up across the country over a four-year period, involving candidates for everything from dog-catcher to U.S. president.
Because the price of the software varies with the computer system used, the companies are reluctant to estimate the potential market value but guess it will someday be in the hundreds of millions of dollars.
"We haven't scratched the surface," Brady said.
The new industry is getting a boost from the national political parties, which are working to educate their candidates about the possibilities of using computers and the products available. RNC Goes Step Further
The Republican National Committee has gone a step farther and developed its own campaign software package for use by state party organizations on minicomputers.
The RNC does not want to compete with private enterprise and believes the private sector is serving the PC software market well, said Thomas B. Hofeller, the RNC's director of computer services. But the RNC also decided that the minicomputer software market is too small to attract many vendors, so it has developed its own product, he said.
The RNC developed its minicomputer software from a code licensed from CSI, Hofeller said. CSI plans eventually to develop its own minicomputer software package for use by candidates.
Frahm and Hofeller describe the relationship as a simple business deal, and say the RNC does not support CSI or any other software houses. CSI, however, supports the RNC by selling its products only to Republicans or nonpartisan candidates; Brady sells only to Republicans. Both companies say their products require support that is closely related to political consulting, and that they can better win their clients' trust by serving only one side.
Most observers say the market will make the technology available to both sides. And the Democrats hope the PC revolution will make computing more affordable to candidates with limited finances.
"The emergence of the microcomputer has opened up computing ability substantially," said Jeffrey Ferguson, director of systems development for the Democratic Senatorial Campaign Committee. "Democrats are not at a disadvantage. . . . The technology available is comparatively the same."
Others say it is too early to tell what the political impact of PCs will be. "On both sides, the things being done now (with PCs) are so elementary compared to what is possible, that the difference between the Republicans and the Democrats is meaningless," Brady said.
The local political software companies expect to be facing growing numbers of direct competitors, but agree that the competition down the road will come from the evolution of the technology.
In a few years, computers will be so simple that anyone with an ordinary background will be able to design their own computer systems, CSI's Frahm said. "At this point, it's a far better deal for them to buy ours."
Aristotle's Phillips agreed. Others may develop better software in the future, but he hopes to be in the best position to market it. "The big changes will be not in the products, but in the way they are distributed," he said.
"The products are there," said Robert Abeshouse, president of Political Systems Analysts, a computer-consulting firm based in the District. "What will shake out this industry is who understands the market."