As soon as they get their marketing ducks in a row, Microsoft Corp and acquisition-laden software vendor Platinum Technology Inc are expected to go public with a partnership whereby the latter’s repository database technology will be chosen as a de facto Microsoft application development standard. Whether this will be swapped in for the much-vaunted Repository created from a design written by Microsoft and Texas Instruments Software, now part of Sterling Software Inc, isn’t clear (CI No 3,145), but the smoke signals don’t look good. If so, the TI-Microsoft Repository, then, is effectively scuttled. Platinum Technology representatives on both sides of the Atlantic did not return many calls for this story, and its not clear when the deal will be announced, even though we’ve been hearing whispers about their Redmond alignment for six months or so. Analysts expect Oakbrook Terrace, Illinois-based Platinum’s second quarter to be rosy, and a Microsoft deal would really get its stock dancing. Though good news for Platinum Technology, it is obviously bad news for Sterling/TI as TI had supposedly shelved plans to do its own implementation of the joint design preferring instead to resell the Microsoft Repository until it could get its own repository done by the year 2000. The TI-Microsoft Repository work, which began with much fanfare back in May of 1994, did not bear up to the hype, or result in the anticipated industry-beating gold standard and common file system for the merged Windows 95-NT Cairo project (itself canceled last year) or even yet result in anything suitable for the new basis of TI’s own Composer application development environment. The actual result, released in March a year later than planned, was a much more modest effort, amounting to little more than a workgroup effort instead of enterprise class, and was not even strong enough to act as more than a hook-on for Composer. Platinum’s stock was up an eighth yesterday to $13, still below its 52-week high of $17 but climbing respectably up from its low of $9.25. Platinum has grown rapidly since it decided to expand from the DB/2 systems management arena it once played solely in, but the cost of acquiring around 25 companies in three years has been a recurring financial hangover and lack of profitability. In January (CI No 3, 088) we reported that periodic takeover rumors had once again surfaced. Ironically, that phantom suitor was thought to be Computer Associates Inc, the company whose growth by acquisition model prefigures Platinum’s own, but the deal, if there was indeed anything tangible there at all, fell through. In February (CI No 3,105) Platinum reported losses for its 1996 fiscal of $68.0m, down from $111.9m the previous full year, including acquisition related charges of $52.8m, on revenue up 44.1% to $439.2m. In April its first quarter figures showed a continuing pattern of weakness, with net loss of $25.3m on revenue up 30% to $115.6m, though that included yet more acquisition charges, $14.1m this time. Instead of selling all or part of his operation, however, Platinum’s forceful CEO Andrew Flip Filipowski ordered cuts and refocusing as a way to finally get back into the black, and achieve his goal of making Platinum a $1bn company by 2000. In May Platinum announced that, as a result of these cost cutting and rationalizations, including a head count loss of 10% of all staff worldwide, it would report charges of between $40m and $45m for the second quarter, and word on the street is that charge may have climbed slightly, to anywhere between $50m and $65m. Nonetheless the company may report as much as north of 30% revenue growth, to around the $140m mark, and First Call analyst earnings estimate bottom out at around $0.04 cents a share profit.
