The battle to save Informix begins - again

The man who was put in place to save Informix swung his axe last week and stocked the top management slots with his own people to execute swingeing job cuts.

Peter Gyenes, the former chief executive (CEO) of Ardent Software, which was acquired by Informix last year, has wasted no time in taking action since Jean-Yves Dexmier's departure last month. But is it too late to rescue the former database high-flier from itself?

Informix plans to axe around 500 jobs - or 12 per cent of its global workforce - in an effort to save the company between $70m and $80m a year. It's all part of a wider corporate restructuring that will see the supplier take another stab at rationalising its product line. The move may even result in the cancellation or selling off of some of its offerings.

News of the job cuts has rocked Informix's employees, but has also had the curious effect of injecting a sense of life back into the dangerously moribund organisation.

One insider, who asked to remain anonymous, said: "At least something's happening. Some of us might not have jobs when it's finished, but it's better than just going round in circles like we have been for the past year under Dexmier. He was an accountant who was forced to be a CEO; now we have a CEO in charge, someone to make the nasty decisions."

Stormy weather
Last month Informix shocked Wall Street by announcing second quarter revenue of $240.5m, down from $250.6m in the same period last year. Net income of $4.9m was well below analysts' expectations and way down on profit of $22m in the second quarter of 1999.

The figures brought an end to six consecutive quarters of sales growth, which had seemed to indicate that the supplier was back on track after a series of product misfires and financial irregularities in the late 1990s.

The news also sent the company's stock plummeting to about $4 from a year high of $21, a drop of 77 per cent over the year. The collapse cost Dexmier his job and saw Gyenes propelled into the hot seat.

But Gyenes has now made his first move to stamp his own vision of the future on to the company. Apart from the headcount reduction - clearly necessary as a cost-cutting measure to appease Wall Street - his most important immediate decision has been to rationalise Informix's product portfolio.

This has become both cluttered and confused in recent years - an after-effect of the disastrous pursuit of the unattainable under former chief executive Phil White.

White took the vendor down what was, at the time, a technological cul-de-sac by insisting that its sales teams only sell the highly sophisticated Universal Server object relational database that was, in general, well beyond the functional requirements of Informix's installed base.

The result was that sales of the company's core relational database product line dried up for a substantial period, but were not replaced by sales of Universal Server. When White was ousted and replaced by Bob Finnochio, the object relational offering was quickly de-emphasised in favour of the relational family.

But White had spent $400m on buying and developing the software, so the company clearly had to find some role for it. Added to this, the initial failure of Universal Server was down less to the technology itself than to its having appeared on the market before its time.

The fact that websites would require databases to handle ever richer data types such as objects meant that the offering clearly had a role to play - only not yet.

Two's company
Gyenes has now decided to simplify Informix's product portfolio by splitting the organisation into two basic divisions: the Database Business Operations division will sell its various databases, while the Solutions Business Division will focus on its ecommerce and data analysis software.

Of equal significance are the identities of the two people put in charge of these new divisions, however. In a clear case of the tail wagging the dog, two of Gyenes' colleagues from Ardent have taken the top spots as his right-hand men.

Jim Foy, who has worked for Ardent, Prime, ICL and Constellar, takes charge of the database arm, while Peter Fiore, a former executive at CrossComm and Stratus, will run the Solutions Business Division and take responsibility for corporate marketing.

Their appointments are interesting for a number of reasons. First and most obviously, they are intimates of Gyenes. Between them, the three men will make all of the important executive decisions that are likely to have an impact on Informix's prospects into the near term.

As Gyenes said: "Jim and Pete have worked closely together now for six years, and their collaborative management styles will accelerate the integration of our organisation and foster the collegial atmosphere we need to profitably build the business, serve our customers and partners, and reward our stakeholders."

Out with the old
The three are also outsiders, untainted by the scandal that still hangs over the company from the days of White and his cronies. Not one of them can be blamed for the mess Informix currently finds itself in. They are also unlikely to make decisions that stem from sentimental attachment or that are weighed down by legacy baggage from previous strategies.

And few would be surprised if the trio also appoint more of their own people into senior positions within international management teams or into middle management roles.

There is already speculation within Informix that at least one switch of country heads is on the cards. This means that the imposition of an Ardent-based culture on its parent is a distinct possibility, albeit one which the supplier denies.

Fiore insists: "We have not changed strategies, but there are clearly many areas in execution and operations that can be improved."

But this effective reverse takeover by the back door has uncanny echoes of the situation that rival database vendor, Sybase, found itself in. Sybase's management team acquired client-server software company PowerSoft in the mid-1990s, only to find themselves ousted and replaced by PowerSoft's.

That situation proved beneficial, improving the company's prospects for a good few years. While it still has substantial issues to address, the fact that it is still around to face them at all is a tribute to the former PowerSoft team managing to clean up the mess left by its predecessors.

But it remains to be seen whether Gyenes and his team can replicate this achievement. They intend to spend September further evaluating Informix's product line-up to determine in Fiore's words "what products we will go ahead with".

That clearly signals the possibility that some offerings may be dropped completely, although the picture should be clearer by the end of next month.

For the moment, suffice to say, the battle to save Informix is underway - again.