Canada’s Hummingbird Communications Ltd says its move into the business intelligence market with the purchase of fellow Canadian Andyne Computing Ltd (CI No 3,321), is just the start of its push into the whole datawarehousing market, in which it hopes to become a major player in the next couple of years. Hummingbird founder, chairman, president and chief executive Fred Sorkin told Computergram the company had achieved rapid growth in its core terminal emulation and PC to host communications market, and currently holds some 64% share of that market, which in total is worth around $150m-$170m. The market itself is beginning to plateau, and Hummingbird, which is used to achieving between 30% and 40% annual growth, with revenues of $102m last year, also saw growth slowing considerably. Sorkin says the company was still extremely profitable with more than $100m in the bank, but to keep the shareholders happy, the Nasdaq and Canadian Stock Exchange-quoted company had to diversify, and looked around for a high growth market to get into. It chose datawarehousing, which is currently deemed to be around a $12bn market and growing at 45%-50% a year, and the acquisition of business intelligence firm Andyne is just the first step in the move to datawarehousing, according to Sorkin. Further acquisitions are very much on the cards, he says, and he is actively looking at data transformation companies, data mart players, data movement and services companies with an eye to acquisition. Sorkin is realistic about the possible threat from Microsoft Corp and its imminent move into datawarehousing with its forthcoming Plato OLAP server. Microsoft could wipe out any one of its competitors at any time by buying them, he says. The best thing to do is to produce complementary technologies which add to the Microsoft offering rather than compete with them head on. Thus he feels that Microsoft is not likely to get into the business intelligence market, and that it would be eternally grateful were someone to offer high quality data movement software to get data off mainframes and into Plato, for example, and whoever offered this would be a winner. It would therefore seem that one of Hummingbird’s future acquisitions is likely to be a company with just such a technology, although Sorkin would give no clues as to who he was talking to at present. On the company’s traditional business front, it will this summer launch thin client versions of its TN-3270 PC to host products, and its NFS products also. The key is to give customers choice, says Sorkin. By the middle of 2000, he envisages Hummingbird’s revenues being up around the $200m mark and split 50%-50% communications and datawarehousing. The company has been used to profit margins of some 30%, but Sorkin recognizes that a public company often has to sacrifice profitability for growth, and that is the phase the company may now be entering. With Andyne’s $22m revenue, Hummingbird is not yet on the map in terms of share of the datawarehousing market, but Sorkin says he expects this revenue to at least double this year, and by next year we should start to see it taking its place as a major player. I would not be surprised if we were number two or three in the next few years, Sorkin said.
