Informix is dead. Long live Informix!
This might well have been the cry emanating from Menlo Park, California, earlier in the week as the moribund software vendor's newly appointed chief executive embarked on what is clearly either a company overhaul or a last-ditch attempt to salvage something from the wreckage left behind by his predecessors.
It is certainly a set of moves that will have an enormous impact on the future viability of an organisation that once looked well placed to challenge Oracle as a leading force in the database industry.
Chief executive Peter Gyenes has now effectively extended his decision to consolidate the business from five units into two operating divisions by planning to break it in half completely and spin the two parts off as standalone companies.
It's a bold gambit, but whatever the end result, no one can question that Gyenes is a man of action. After only a couple of months in the job, the vendor he was put in charge of bears little resemblance to the one that is set to emerge over the coming weeks.
Gyenes' actions have been decisive and his intentions are clearly good, but is it too late for Informix to stage a resurrection that would rank alongside Lazarus'?
All shook up
The aim is to split the supplier's core database business off from the one that deals with emerging ebusiness markets. This will lead to the creation of two subsidiaries that are wholly owned by holding company Informix Corporation, but which will ultimately be spun off as public companies in their own right and floated on the Nasdaq.
The first of these will be Informix Software, which will effectively be the 'old-style' Informix as we would recognise it from the glory days. This will concentrate on developing and selling database management systems, but will focus particularly on data warehousing and transaction processing applications - two of Informix's traditional strongholds.
While the viability of purist database companies has been largely derided by analysts over recent years, Gyenes expects Informix Software to rake in revenue of up to $800m this year. At least 2300 of Informix Corporation's employees will be assigned to the firm, which will be headed by Jim Foy, one of Gyenes colleagues from Ardent Software. Informix acquired Ardent earlier this year.
Foy claimed that Informix's recent disappointing performance in the database sector owed much to its focus on building ebusiness bundles. Informix Software, on the other hand, will concentrate on creating a "world-class ebusiness server. We'll be a lot more successful," he said.
But in a move that might make more than a few users shuffle nervously in their seats, Foy's brave new world will be based on a new technical architecture for the database. This appears, on the surface, to be yet another stab at integrating the best elements of its derided object/relational Universal Server offering with the more popular relational products to create a single code base.
"We've never been able to establish a code base that provides the more attractive features of the engines that we have. We're converging to the point where we'll have far fewer code streams and they'll be very high performance," said Foy.
He insisted that the code change would be accompanied by a migration strategy that would enable users to move "fairly smoothly" on to the new architecture.
On the attack
The second company - as yet unnamed - is perhaps the more interesting of the two, opening up the organisation to do business on a whole new front. It will focus on providing users with ebusiness applications and bundles that are database-independent.
In other words, this part of the business will gun for customers that don't necessarily run Informix databases. Gyenes is taking the fight into the backyards of Oracle, IBM and Microsoft. Courageous or foolhardy? Only time will tell, but it's a daring move to say the least.
The company is intended to combine content management, ecommerce and business intelligence technologies into a single product offering. This will be aimed at so-called click-and-mortar companies that need to integrate their traditional business and systems with newer web-based operations. With 1100 employees, it has revenue targets of between $120m to $130m this year and hopes to become profitable by next year.
Peter Fiore, who was senior formerly vice president of Informix's E-business software unit and also a former Ardent executive, will become president of the new division, which will be given a name by the end of this year.
Fiore explained: "The first couple of quarters of this year have been disappointing. We determined the best way to proceed was to separate the companies. We really need to provide ruthless focus around customers and markets in each business."
Ironically, the breakup appears to all but eradicate the efforts to merge Ardent and Informix, which Gyenes told vnunet.com last month had not been executed properly. The ebusiness organisation will occupy Ardent's old headquarters on the East Coast of the US, while Informix Software will be based in Informix' traditional Silicon Valley home.
But shareholders had a mixed reaction to the breakup. "It sounds to me like the company has repeated the mistake of forgetting its core database business in order to concentrate on selling the 'cool' new stuff," said one.
He continued: "This is reminiscent of a few years ago when it stopped pushing the relational database products in order to sell the object/relational stuff. I suppose the reorganisation might help in this regard but, jeez, how many times is it going to make this mistake?"
But another said: "In an odd way for us long-term holders of this stock, it is good to see management taking the action that they have so far. This will be the first real test of the new management team [for which you can read Ardent's management]."
Analyst firm AMR Research also had mixed opinions. "The move is a smart one for Informix, but it could be too late," it warned in a research note. "A year or two ago, this could have helped it, but with Oracle, Microsoft, and IBM so dominant in the market and offering other products optimised to work with the database, it will be hard for Informix to take market share. But it's worth the effort, regardless."
Trouble in store?
Whatever the long-term outcome of this new strategy is, Informix Corporation still has its current day troubles. As part of the breakup, more jobs are going, on top of the 500 announced last month. This would appear to confirm rumours from within the company that the originally announced 10 per cent reduction in headcount was always intended to be a 20 per cent cut.
In addition, Informix has warned that it expects to report a third fiscal quarter operating loss of $15m to $24m. But this will be made much worse by restructuring charges and other one-time expenses, which could total as much as $90m.
But perhaps the most poignant symbol of the emergence of the 'New Informix' from the ashes of the old was chairman Bob Finnochio's resignation. Finocchio did his best to turn around a firm that was holed below the waterline and which, due to his efforts, means there is still a company for Gyenes and Co to try and rescue.
But Finocchio was a member of the old order, while Gyenes and the Ardent team are part of the new. Whether it's a face that anyone recognises by the end of the year will be test of how successful their efforts have been. But at least something's happening at last. And if they don't pull this off, at least it won't be for lack of trying.
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