A company whose main claim to fame is shipping software which did not work, has to change rapidly if it is to survive. Syncronys Softcorp has decided to reinvent itself – and not before time. Out goes the bad old accounting practice of putting sales in the accounts when the products hadn’t necessarily been sold – they were just somewhere out there in channels. And the company is also ditching the old-fashioned notion that software companies should write software. It has decided that it is rather better at flogging the stuff. So its new business model is to license products from outside firms. This policy, it boasts, gives it access to the most innovative and sophisticated software from independent vendors and means it can respond more quickly to changing trends and smoothes the flow of new product releases. But the really big bonus is that without roomfuls of programmers, the company has lower fixed costs and much less risk. Aversion to risk is not surprising from a company which had the humiliation of having to withdraw its SoftRAM memory doubling program for Windows 95 in 1995 when users complained that it didn’t actually work. The company has made progress, halving net losses from $12m to $6.8m in the year to June 30. At the end of fiscal 1996, said chief executive Rainer Poertner, the company had no product on the market, no revenues, an inadequate infrastructure and faced an uncertain market. By contrast, he says it now has 11 products on the market, a steady revenue stream and excellent industry and consumer relations. What is does not have, however is an enthusiastic following in the investment community and the shares, which have been as high as $4.75 in the past year, are current limp at around the $1.75 level. Investors still need convincing that the ‘new’ Syncronys is a lot different from the old version.
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