[obsessions] 'Forte's growth stymied by clients' obsessions with
Y2K
' Clifford Carlsen Business Times Staff Writer
After watching revenues jump from $10 million to $63 million in two years, Forte
Software Inc.'s otherwise healthy sounding 13 percent growth last year looked positively
anemic.
Blame it on the millennium.
Up until fiscal 1998, the Oakland software maker could do no wrong. Founded by
veterans of the late Ingres database company, Forte introduced its first product in 1994
to provide sophisticated object-oriented software tools for advanced software designers.
The effort attracted blue-chip venture backing from Sutter Hill Ventures and Greylock
Associates, and its first products were heartily embraced by information services
directors at the Fortune 500 companies, its target customers. Everything went according
to plan, as Forte's products became recognized as premier tools for writing the
customized kinds of huge enterprise applications required by large companies. Wall
Street responded in kind, debuting the company's stock at $40 a share in March 1996
and quickly sending it to more than $80 a share by summer.
But in the fourth quarter of fiscal 1997 ended March 31, Forte hit a wall called Y2K.
Unlike databases that are expected to freeze up in chaos or confusion on Jan. 1, 2000,
there is no "millenium bug" lurking in Forte's own software or systems. But the company
discovered that the information systems budgets of its core corporate clients are now
almost entirely devoted to problems associated with the year 2000 problem, nicknamed
Y2K, and Forte's sales have slowed dramatically.
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