Analysts have slammed System Software Associates? (SSA) expansion plans, claiming the applications supplier needs to cater to the needs of its existing customer base first before it thinks about trying to grow.
Concern was voiced after William Stuek, SSA?s new president and chief operating officer, who was in London this week, outlined to the VNU Newswire, how he intends to turn the company round, after it suffered losses three quarters out of four last year.
Stuek said: ?The road to financial recovery is a long one, but we can increase revenues and will keep control of our costs and expenses. We?ll do it methologically and are going to focus the company on market segments where we?re successful. We?re not going to spend a lot of time and energy in markets that we?re not in or don?t want to be in. Focus is a change of strategy - we were wandering around where we shouldn?t in the past.?
He added that SSA would focus on the pharmaceuticals, speciality chemicals, food and beverage, automotive supply, consumer packaging and forest products such as paper, pulp and packaging sectors.
The supplier would also grow 50 per cent year-on-year to become a $1 billion company within five years, he hoped, by building up the services side of its business.
While software generated 70 per cent of the vendor?s total revenues of $430.5 million last year, he wants it to account for two thirds of turnover by 2003, and is keen to build up a third party channel to help grow the business further.
But, Dennis Keeling, managing director at consultants, Keeling Associates, said: ?The market doesn?t normally give organisations a second chance in this business. If I?d upset as many customers as SSA has around the world when it said it had solved all its problems and then had bright ideas for expansion, I?d think it was a bit of wishful thinking.?
He added that feedback from customers indicated they were giving up and moving away from the supplier. ?A lot only upgraded to version 4.0 of BPCS. Very few went to version 6.0. A lot tried and decided to go elsewhere because the software has not proved to be reliable. I know SSA has also got major performance problems getting its software to operate under NT.?
Jyoti Bannerjee, managing director at Tate Bramald consultancy, was also concerned about SSA?s cash collection performance.
?People bought into the concept of BPCS 6, but SSA?s delivery was not that good and there?s still a questionmark over whether 6.0 performs. Money is not coming in against sales as fast as it should, which implies people are not paying because they?re not happy. SSA is a very large and significant player and it won?t disappear from the scene, but there has to be a question mark over its viability in its present form,? he said.
But, Rob Bailey, SSA?s director of business development, was adamant that customers were happy with BPCS and that revenues were growing.
?The way that revenues and implementations are going shows that we?re doing OK. Our clients are happy, our products are growing and moving forward and customers are moving back strongly to us. Those guys are saying we get a second chance. Out of a total customer bases of 8,500, over 1,000 have implemented version 6.0 and of those 144 are live,? he said.
Unlike Stuek, who was unprepared to supply general availability dates for the Windows NT version of the product, Bailey said he ?fully expected? the full suite of NT Server-based software to ship at the end of the year.
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