An interview with Mr. "F"-------------[reposter]------------
from:
zdnet.com
Informix CEO 'bullish' on
company's future
By Connie Guglielmo
February 13, 1998 9:07 AM PST
Inter@ctive Week Online
Bob Finocchio must be having a pretty good
week.
Although he's only been on the job for seven
months, Informix Software Inc.'s chief executive
officer had to skip the usual honeymoon period
that most new executives enjoy. The former
president of 3Com Corp. (COMS) took over the
database company last summer after
questionable accounting practices led it to
restate its earnings for the past three years - a
move that put the once high-flying database
company in the red, forced it to lay off staff and
its longtime CEO to resign, and prompted
shareholder lawsuits as its stock fell (to an
all-time low of $4 in December 1997).
While analysts were expecting more bad news
for Informix's fourth quarter, which ended Dec.
31, 1997, Finocchio and company surprised the
market this week by announcing a profit of $9.2
million, or 5 cents per share. While it still has a
long stretch ahead of it on the road to recovery -
it reported a loss of $358.8 million for 1997 -
Informix (IFMX) saw its stock jump 53 cents to
close at $7.38, reflecting some market
confidence in the 17-year-old company's ability
to turn things around.
Finocchio spoke recently with Inter@ctive
Week about the Informix prospects - and the
competitive database market in which it plays.
Q: Now that 1997 is behind you, what do
you think Informix's challenge is for the
year ahead?
Our greatest challenge is building customer
confidence and getting traction at the top line.
I will say we're making substantial progress.
We've made progress in our financials. We did
our restatement. We did it quickly. We did it very
openly. We've also been reducing our
break-even point by cutting costs; we brought in
new management; and we've become very clear
about what business we're in.
Q: What business is that?
I'm very bullish now on our prospects and on the
database market in general. We've made a
strategic decision to focus on the database
industry, as compared to our two competitors
who are diversifying away from the database
market - Sybase [Inc.] with tools and
middleware and Oracle [Corp.] with consulting,
services and business applications. . . . While
Oracle is still a formidable competitor, they're
diversifying, and that gives us an opportunity to
sell to the high end of the market.
Q: And how do you define high end?
The high end is not big customers with big
databases, but customers with sophisticated
requirements. We're focusing on the high end in
terms of being able to offer high-end
performance and scalability. . . . At this end of
the market, customers don't buy on price, but on
the value proposition.
Q: What about the low end of the market,
where Microsoft Corp.'s Windows NT as a
database platform has driven prices down?
Where databases are becoming commodities,
it's our strategy to remain adjacent to Microsoft
and not compete head-to-head with them. The
same product attributes we have that appeal to
customers at the high end also appeal to
customers with Windows NT. . . . NT doesn't
scale in terms of performance or in terms of
users. It doesn't have the reliability and
availability of Unix. It will one day, but that's not
the case today. Nevertheless, it would be
foolhardy for us to compete with Microsoft in a
market where customers do not value our
capabilities. When NT is ready to handle
enterprise-class requirements, then they will be
a formidable competitor. But we're talking to
many customers who are totally committed to
NT but are still waiting for it to mature. They still
have to run their businesses today.
Q: Do you think it's that commoditization
that has hurt database sales for traditional
vendors like Informix, Sybase and Oracle?
All three companies have reported a loss or
slower-than-expected growth over the past
several months.
Where I differ from my competitors is that I don't
attribute the decline to Microsoft. I attribute it to
the business practices of Informix, Sybase and
Oracle. Those practices being centered around
the multiyear, all-you-can-eat license deals [that]
can make or break your quarter. With those
licenses, companies [like Informix] had a
tendency to book revenues up-front instead of
spreading them over the life of the license. . .
.The pricing for the licenses has dropped
dramatically. That's where the pricing
competition has come, not from Microsoft.
Q: So what's your plan for handling those
multiyear licenses?
As we went through our restatement, we moved
to more conservative accounting standards. . . .
We're not optimizing our businesses around
those [multiyear] transactions. Instead, we're
going after smaller deals, but more of them. This
has the side benefit of more consistent revenue
growth, because our quarters are not contingent
on winning one or two major deals.
Q: Any truth to rumors that Informix is an
acquisition candidate? Maybe Microsoft's
latest takeover target?
[Laughing]. There are always rumors. But
Microsoft doesn't acquire companies like ours,
where 95 percent of our business is in Unix. . . .
We're a company that's going to stay focused
on the database market. That's how we pay the
rent. |
