System Software Associates is making 300 staff redundant and taking a $120 million hit in the third quarter after a run of bad losses and falling sales.
It will also discontinue all AIX and Digital Unix research and development, and reduce office space by 25%. The beleaguered ERP supplier said the moves are essential to reposition, restructure and revitalise the company.
The integrated Business Planning and Control System (BPCS) software consists of 60 different products and was designed originally to run on AS/400 computers. It was completely rewritten during 1996 and 1997 as an object-oriented component based system, and SSA acknowledges that the processes took longer and cost a lot more than anticipated.
Steve Jacks, marketing director of SSA EMEA, said: "We moved from the AS/400 to too many Unix directions. There was too much spent on R&D, we exceeded our budgets, and the end products were unstable, of poor quality and didn't meet expectations."
Roger Koniski, president SSA EMEA, added: "The DEC and AIX versions were most unstable, offering poor performance and poor scaleability. The product now is more stable than ever on AS/400 and HP Unix systems. The NT version will be available during 1999."
Koniski continued: "94% of revenues come from the AS/400 system but that will change with HP now and NT next year."
The argument is that discontinued research and development on AIX and Digital Unix will allow the company to focus on its AS/400, HP-UX and NT versions and vertical industries.
Robin Bloor, managing director Bloor Research, said: "ERP is meant to be big business at the moment. The market belongs to those vendors and with the Year 2000 issue, SSA should be really well positioned, but they haven't been doing well. They're just not selling enough."
Of the 300 layoffs, around 80 will be in Europe, with the SSA/Acclaim office in Manchester already scheduled to close in September.
Robin Bloor believes SSA must be a candidate for acquisition now, but Steve Jacks denied this. He said: "The company is not for sale. We expect to reach five percent to 10 percent profitability in 1999."
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