Though not all of us may agree with such eyebrow-raising figures as the $2 trillion recently suggested by Technology Business reports as the figure needed to fix the looming Year 2000 problem, none of us can doubt that there is ‘gold in them thar Cobol hills’ – even if it only amounts to the revenues of the handful of Year 2000 fix-it specialists who have sprung up the past couple of years.
By Gary Flood
One such is Phoenix, Arizona-based Viasoft Inc, which according to its solutions marketing manager Wayne Snell, commenting on the future prospects of his company in connection with the release of its new Bridge 2000 windowing patch (CI No 3,196), was happy enough to be included in the Year 2000 hype amongst investors at the time of its initial public offering in early 1996, but is also now canny enough to see that a business plan that calls for shutting the company down in January 2000, when the Millennium Bug is quashed, is not too sensible.
The Cinderella market
Viasoft has in fact been in the deeply unglamorous software (mainly Cobol) maintenance market in all the years since its formation in 1983. Up until the Year 2000, however, maintenance was regularly dubbed the ‘Cinderella’ of software market opportunities, since the very fact of dealing with spaghetti code was at once recognized as absolutely necessary to keep many Global 5000 companies’ businesses on-line, and at the same time as being hideously dull, and not exactly the most glamorous thing one could choose to put on one’s CV. Viasoft, with its Existing Work Bench (ESW) toolset, had always been regarded as one of the more proficient technical companies. But like its close companion, and now main rival, Adpac Corp (effectively now a part of Platinum Technology Inc, though the deal is a little curious in that Adpac still exists separately but has only had one customer, Platinum, on exclusive worldwide contract since June 1996), it was not until the Year 2000 crisis started getting publicity in mainstream papers like The Wall Street Journal (most programmers already being aware of the problem, often through having contributed to it by blithely using two-digit date fields or date variables with their cat’s names and so forth) in the mid 1990s that prospects for anything other than mildly profitable stable senescence seemed forthcoming (Adpac has for example been knocking around since the mid-1960s). So when Viasoft went to market, it fared extremely well. As the Journal pointed out in a story in May 1996, since the start of that year Year 2000 companies’ stock prices, including Viasoft, had been booming, with Viasoft’s tripling, to $38, Computer Horizons Corp’s share price doubling to $52, and software house and consultancy Data Dimensions Inc going up sevenfold, to $42. For its last full fiscal year (reported last August), including its first full year as a public company, Viasoft was able to report net profits for the year to June 30 up 19.7% at $6.2m from $5.2m on revenue that rose 40.7% to $43.6m from $31m. In October, the rise had peaked at ten-fold, with shares hitting $120 from their $12 mark nine months previously, prompting a two to one shares split. Viasoft has just closed its second year as a public company, and based on its last three quarters turnover, it may close the 1997 fiscal year not that far off the $80m revenue mark (for its first nine months revenue was $57.7m, with profit excluding acquisition charges of $7.5m), and its share price has climbed up from last September’s low of just over $14 to $48. But it has not all been financial plain sailing; an ambitious scheme announced in February to raise extra cash by issuing a further 2m shares had to be abandoned a short time later due to weakness of technology stocks. This volatility reminds us that, after the Year 2000, the market may not look quite so kindly on Cinderella and Viasoft stands a good risk of returning to worthy obscurity as a maintenance maven once again. But its chief executive and president Steven Whiteman has evidently thought ahead, more than many of his Year 2000 clients, perhaps, and has identified Viasoft’s next market – data warehouse management. Last November he swooped on closely-held German technology company Rottger & Osterberg Software-Technik GmbH of Munich for $29m in cash and $4m (we’ll have to wait until the full year results in a couple of weeks to see if a further $4m, earmarked to the R&O sellers in an earn-out clause if targets up until end of June were met, has been paid out in addition). R&O was best known for its Rochade client/server repository, which had been licensed by Computer Aided Software Engineering vendor Knowledgeware Inc among others. The idea is to merge the Rochade repository in with the existing suite to provide a repository-backed data warehouse maintenance and management product. Nice idea, especially since that given the popularity of data warehousing there will surely be a number of sites seeking such help in a couple of years time, when their databases have swollen to perhaps unmanageable sizes. But Whiteman holds no patent on this idea, and it is well known that Platinum – which bought the ‘other two’ repository companies, BrownStone Solutions Inc in February and RelTech Group Inc in April of 1995 for stock – is trying to meld the two into one super-product (though little has been heard on that front for some time). So Viasoft is sure it has an exit strategy for the next century, even if he has to compete with Platinum in what is still a highly emergent market.
Nervous hordes
Still, Viasoft even in 1997 claims that it is far from being ‘just’ a Year 2000 company, with Snell, perhaps overstating the ratio, claiming that less than 50% of all business is Millennium related. The only way to live with the Year 2000 is to live through it, he notes, a motto which could just as easily apply to his own employer as it does to the nervous hordes of chief information officers out there, wondering if (as Ed Yourdon joked) they really should convert all their assets into gold coins and wait out the end of civilization due to the Y2K Bug on some pleasant desert island.
