Blyth Software Inc, developer of the Omnis 7 client-server development environment has signed a major agreement with IBM Corp. Historically IBM has found the client-server arena difficult to get to grips with. With Lou Gerstner at the helm, IBM has altered its strategy and will select 62 software companies to help redress this balance. Out of the 62, about 10, Blyth among them, will be singled out for special treatment: more money, a greater marketing drive and a whole lot more attention. In return, IBM’s OS/2 operating system will gain firm industry support. The Foster City, California-based Blyth looked to be in trouble last year. It shed 43 employees, amounting to 25% of its total worldwide workforce, in an attempt to reduce fixed costs. With net losses for the first nine months of 1995 at $4.7m, down from $7.8m last time, the company is heading in the right direction. European managing director Kevin Adams is confident the agreement with IBM will put the company back on track, and it will be back into the black by the end of the next fiscal, which began in March. Blyth spent 14 months negotiating with IBM and finally signed the deal in December 1995. Although IBM has approached it regularly, Adams denied the deal was a prelude to another IBM acquisition. With 65% of the equity owned by a few of the management team he said it would be very hard, and too expensive for IBM to buy. The first stage of the partnersip will see a new version of the Omnis software put up under IBM’s OS/2, to be shipped by mid-year. What is unusual about the deal is that IBM will be involved from the beginning of the product development cycle, instead of stepping in when all the hard work and uncertainty is over, and will take sole responsibility for its funding. After its launch, the companies will co-fund marketing and development. Mike Minor, chairman and chief executive at Blyth, said IBM is looking to Omnis to provide a common technology environment with a portable front end for all five DB2 product lines and AS/400. The IBM sales team will be given incentives to introduce other software from Blyth, said Minor, but that is as far as the partnership will go. He estimates 45% of Blyth’s revenue comes from its software business, the rest from services such as consultancy and training. Terms of the deal prevent Minor from disclosing the specifics of the agreement, but it does not exclude Blyth from signing similar agreements with other companies, or developing software independently. Blyth currently has some Internet- Intranet software under development, which should be launched within the next three months, said Adams, along with a whole host of new software. In the light of a new deal to install Omnis software and provide training and consultancy worth several million dollars to the Banco International SA, Mexico City, the company said it would be looking towards Latin America as its next big marketplace.
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