Along with the SmartStream line of client-server applications Geac Computer Corp took on when it acquired Dun & Bradstreet Software last October (CI No 3,027), Geac Computer Corp also found itself with seven or eight aging mainframe applications. But those applications still account for over 3,500 active licenses, and are bringing in $200m-plus a year in maintenance receipts. This must make the Enterprise Server mainframe stable very profitable indeed for the new owner. In its first quarter, Geac reported net profit of $30.8m on revenue up 183% at $145.6m, up from net profit of $8.6 million a year ago. Earnings per share soared to $0.97 from $0.29. From its income, Geac has to meet expenses and overheads of some 100 support staff, perhaps a couple of hundred more in customer services and general administration, and another 100 or so that are said to be working in development. The research and development funding put aside for the acquired Millennium and E-Series mainframe applications is set at some $20m for the year commencing May 1997 – up $4m on the year previous.
By Kevin White
But at roughly 10% of the $200m-plus income going into Geac’s Enterprise Server division, this amount is still shy of industry norms. It may explain why there is a lack of much visible evidence of the promised acceleration of the Year 2000-compliant Millennium and E-Series program. The Y2K-compliant General Ledger module for IBM MVS systems is running slightly ahead of the scheduled fourth quarter 1997 delivery date, Geac’s Matthew Brosnan was happy to report to us. But apart from this, there is really very little else to mention other than the GL targeted at the 150 or so sites running applications on Digital Vax and various Unix servers. This should be appearing by the first quarter of 1998, which nudges it as much as six months ahead of the original delivery date set by D&B Software. Clearly if year 2000-compliant releases are being phased in over time, there will be some periods when, say, a Y2K-compliant GL application would need to interface with some non-Y2K-compliant human resources package. And understandably there have been concerns voiced by users over what such arrangements might mean for the payroll/GL interface. Geac has said that interfaces from its Y2K-compliant applications to non-Y2K-compliant programs are being designed to pass dates in the formats required. As Y2K-compliant releases for the later applications become available, a patch will be given to upgrade the interfaces to work with the new Y2K-compliant date formats. The company has also confirmed that it will not be updating BrightView to make it Y2K-compliant but instead has taken the decision to replace it with CoHost. The CoHost product had been kicking around for a good while before Geac appeared and has since been launched as a graphical front end for green screen E-Series and Millennium applications. The first installation of CoHost has just gone into production at Wheat First Butcher Singer, the Richmond, Virginia-based financial services company. Other than this, Geac developers are said to be acting out E-Series and Millennium plans described to us in January by chief executive Bill Nelson as work that will enhance reporting facilities and consider the potential of the mainframe as an intranet server. Immediately, the company is promising integration of electronic commerce elements into E-Series and Millennium applications, using a product from Commerce-One Inc, the small Walnut Creek, California-based e-commerce supplier headed up by Mark Hoffman the former chief executive officer of Sybase. Developers are working at embedding Commerce Ones C1 BuySite proxy catalogue server system into Geac purchasing applications. This will allow product parts data from any number of suppliers to be sourced from a central store of catalogues, directly over the web. Initially intended for release during the second quarter of the year, we are told the product will be available sometime before the end of this year. Another promise is for the development of imaging and workflow features for some mainframe applications – so that documents can be scanned and routed around an organization. Initial developments will center on AP Accounts Payable modules for both E-Series and Millennium versions and will be based around a product known as Documetrix Invoice Manager for Accounts Payable from the Chantilly, Virginia-based firm, Universal Systems Inc. The software would allow an Expert or Millennium series AP user to view any paperwork that may be related to the processing of a particular AP, such as an invoice, purchase order or delivery receipt.
Discussions with IBM
Again, originally flagged for the second quarter of the year, we are now hearing a release will be fit for general availability this year. Meanwhile, Geac is understood also to be actively involved in discussions with IBM over the use of MQSeries messaging middleware products to alleviate some of the batch dependencies of E-Series and Millennium applications. At the moment Geac users of, say, an Accounts Payable module wanting to take a transaction over to a General Ledger program would need to carry out the transfer via a batch feed – and quite possibly overnight. Via MQSeries, the same process could be carried out as an online transaction virtually in real-time. While users of the D&B mainframe software lines can be confident that their software is now in a stable hands, the ride may be a rough one. Geac is ruthlessly focused on its bottom line. That said, it is experienced in company turnarounds, and promises added momentum in its mainframe Year 2000 plans, along with a clearer view of the future of SmartStream.
This article originally appeared in M&A Impact.