Following worse than expected first quarter results, front office vendor Vantive has removed John Luongo, its chairman and chief executive, replacing him with senior vice president of ebusiness and information services, Thomas Thomas.
Earnings in the first quarter to 31 March are expected to be around $45 million, an increase of approximately 20 per cent over revenue of $36.3 million in the same quarter last year, but well down on expectations, largely attributed to a fall in licence sales.
Vantive is expected to break even in the quarter. Thomas's chief claim to fame is that as chief information officer at 3Com he lead its electronic business initiative to a revenue total of $1.6 billion during 1998.
The boardroom coup coincides with the end of a period where its chief rival, Siebel Systems, has stormed away to record revenue. Siebel's revenue to 31 March was up a whopping 81 per cent to $134.1 million, from $74.2 million in the first quarter last year and up 11 per cent from the fourth quarter of 1998. Operating margins were a healthy 23 per cent.
Analysts weren't surprised at the Vantive shake out. One said, "Last week they did an open day, it was clear that Luongo was being sidelined in favour of others. They're in a mess at the moment."
The issue now will be whether Vantive is able to differentiate itself and get its own ebusiness strategy going in enough time to return back to profitability before its rivals, which later this year will include Oracle. It also has to make a mark in the e-customer service sector of the front office and customer relationship management markets. Earlier this month (see Newswire 16 April) Vantive announced a reorganisation of its European operations, where it is struggling to make an impact, to bolster sales.
But Thomas is not one to take Vantive's problems philosophically. In a carefully scripted performance, he said, "This is a dynamic and exciting time for Vantive and the customer relationship market. As the market has evolved from automating front office tasks to creating global business to business to consumer relationships across the Web, Vantive is ideally suited to helping companies serve the e-customer."
Last year, rumours circulated that Vantive was a takeover target for Peoplesoft but that came to nothing. Vantive's shares have slumped in the last year from a high of round $40 to a new low of $6.31. The announcement resulted in a share price drop of nearly a third from the previous day's close of $9.31.
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