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July 27, 1987

SALES SOAR AS ON-LINE SOFTWARE PROMISES IBM DB2 PRODUCTS NEXT MONTH

By CBR Staff Writer

Our primary goal this fiscal year is to become as well known for DB2 products as we are for CICS products says On-Line Software International Inc’s chairman and chief executive officer Jack Berdy. The first step towards that goal should come next month when the IBM mainframe software company announces a new product aimed at the DB2 market. Other than saying that the product will be delivered in September, Berdy is giving little away about the forthcoming addition to On-Line’s range. It will, however, Berdy promises, be at the leading edge of technology. It will not, though, involve the use of artificial intelligence; Berdy believes it will be at least three years before that market is hot. All On-Line’s current markets, however, are hot. On Wednesday, the company reported record results, the outcome, says Berdy, of a strong across the board performance. He seems particularly pleased with InterTest, the nine-year-old CICS testing and debugging tool which has just had its best ever year. InterTest remains On-Line’s best-selling product, although the UFO Productivity System on-line applications development tool and the Ramis Information System data management tool, both of which were bought from Martin Marietta Corp last October, are catching up fast. UFO and Ramis now represent around 40% of On-Line’s monthly sales and profits, a far cry from their performance last year when, according to Berdy, they were losing more than $1m a month for Martin Marietta.

DEC’s ascendancy only temporary

In the UK, where On-Line has had a direct presence only since the turn of the year – before that, InterTest and On-Line’s older products were distributed by the now defunct Fee Ltd – the two products have been the major contributors to a UKP1m profit on revenue of UKP2.5m. On-Line’s UK managing director David Lloyd says that UFO and Ramis’s previous losses were due to the low priority attached to software by Martin Marietta. He fully expects the Nomad product line, which was recently bought by Thomson-CSF SA, to face the same problems now that it is being looked after by the same people who looked after UFO and Ramis for Martin Marietta. The recent Computer Associates Inc agreed bid for Uccel Corp will, in Jack Berdy’s view, accelerate merger activity in the software market. Citing the potential conflict between CA’s Top-Secret and Uccel’s ACF2, he says that users will become more reluctant to buy from potential takeover targets thus increasing their vulnerability. Berdy certainly sees On-Line as one of the big players of the future and has no intention of selling his 50% stake. With the successful acquisition of UFO and Ramis behind him, Berdy is now casting around for something on which to spend his $30m cash and strengthening share paper. He is primarily looking for companies with new technologies to sell, but he would also like to increase overseas sales further – they have risen to 25% of the business from 5% with the purchases from Martin Marietta. But On-Line will not be following some of the other traditionally IBM-orientated software vendors with DEC products. Berdy believes DEC’s ascendancy is only temporary, and that IBM’s sales force, the best in the world will soon begin to reassert itself.

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