Platinum Software's chief executive admitted the company 'really gotps and downs of leading developers. hammered' when half the salesforce of Dataworks - the enterprise resource planning (ERP) firm it acquired - quit at the beginning of the year.
George Klaus told an audience of investors at the Hambrecht & Quist Technology Conference in San Francisco: 'We knew there would be sales attrition because of the merger, but we didn't expect a mutiny.'
Platinum acquired Dataworks in October 1998 for its Avante and Vantage applications to add to its own front office software. But 16 of Avante's sales team left at the beginning of the year after they received their bonuses, Klaus revealed.
He admitted the walkout affected Platinum's first-quarter results. Net income was dollars 2.1 million with revenue of dollars 66 million. But Platinum beat analysts' earnings per share estimates of dollars 0.02 by posting returns of dollars 0.05.
The results come after Platinum warned it would not hit financial targets for 1999. Analysts claimed that despite announcing better-than-expected returns, the staff who had resigned from the company would have generated licence revenue of between dollars 15 million to dollars 20 million.
Klaus said the developer had repaired the holes and had hired back the people who wanted to work for the company. 'If someone doesn't want to be in my team, then I don't want them,' he added.
One speaker who had no worries about his company's performance was Tom Siebel. The head of Siebel Systems, which develops customer relationship management (CRM) software, claimed the company would be the second largest applications firm after SAP by the end of the year.
But arch-rival Oracle hit out at Siebel for developing complicated software that required cumbersome and expensive client/server technology.
Oracle, which will ship its CRM 8i in May, claimed that, unlike Siebel, it does not need to give away shrinkwrapped client software because CRM 8i uses a Web browser as the user interface.
However, Siebel said he was prepared for Oracle's invasion in May, adding: 'It will be Oracle's fifth attempt to launch a product since 1994.'
He claimed Siebel was in a strong position because it had won a US patent for the CRM technology and that he had signed strategic agreements with several IT suppliers, including bundling the client/server with Compaq's laptops and PCs, plus adding Siebel 99 to IBM's DB2 database.
Siebel saw its revenue leap by 88 per cent to dollars 392 million in 1998 from dollars 208 million in 1997. Analysts have predicted 1999 revenue of dollars 547 million, which is set to increase to dollars 737 million by the year 2000.
Meanwhile, Bob Finocchio, chief executive of Informix, said object relational technology will finally enjoy popularity as Web service providers demand more power from their databases.
Finocchio told the conference: 'As packaged applications drove databases in the past, the internet is now the primary source for growth. It is driving transactions and data and demands scale.'
He pointed out that Red Brick, Informix's data warehousing product, would see additional benefits from the explosion in e-commerce services.
Red Brick forms part of Informix's internet strategy which Finocchio claimed brought discipline to Web-based systems. 'Many companies run SAP in protected environments but run their Websites on a Web server (that is unprotected). But their Websites are also vital.'
Finocchio said Informix is aiming to split its business on a 50:50 basis between licence sales and services. However, he believed that by the end of the financial year, the company's licence business would be greater than services. It is also aiming for a 20 per cent operational margin.
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