February 17, 1998 3:10 PM PST

IPO-bound NCI gets new chief

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Network Computer (NCI), a subsidiary of Oracle (ORCL), got a bit closer to an initial public offering today as its tech-savvy leader stepped down so that a replacement with financial know-how could be put in his place.

Jerry Baker, the 14-year veteran of database software vendor Oracle, tendered his resignation and will be replaced in the CEO slot by David Roux, an Oracle executive vice president in charge of mergers and acquisitions and corporate development. Also stepping down is NCI's president, Wei Yen, who will remain with the company, although "in a diminished capacity," according to a spokesman.

A source close to Baker said that NCI was a start-up company trying to expand, and that Baker's skills simply did not suit the company's growth goals.

The Oracle subsidiary has been aiming for a public offering since its inception two years ago, said the source, and the company now needs "someone who has a strong financial background who has more experience in the details of taking a company public and who can deal with investment bankers."

A spokesman acknowledged that an IPO launch is NCI's long-term goal, but said the company does not have a timeline set for the offering. He noted that Roux is part of a natural transition that many IPO-bound companies go through, in which they beef up the executive staff with individuals experienced in the ways of Wall Street.

Roux gained a level of financial expertise through his responsibilities at Oracle for business development, mergers and acquisitions, equity investments, and technology licensing.

Baker, on the other hand, has a strong technology and product-development background. He was senior vice president of the product and platform technologies division of Oracle prior to NCI's launch, and his organization was responsible for the development and marketing of Oracle products for major system manufacturers, including Apple, AT&T, Digital Equipment, Hewlett Packard, IBM, Microsoft, Novell, and Sun Microsystems.

NCI's mission has been to develop software for network computers and other non-computer Internet appliances, including Internet TVs. Back in August of 1997, when NCI merged with Navio in a $77 million stock deal, Oracle chairman Larry Ellison said the unit's purpose was to create a single software standard for a family of low-cost digital appliances. The deal was intended to prime NCI to go head-to-head with Microsoft, who recently had acquired WebTV. The acquisition ultimately motivated both companies to move forward aggressively with their anti-Microsoft strategies.

"The real competition is Microsoft--other players are not significant in the least," Ellison said upon NCI's acquisition of Navio.

The source said it took some time, however, for the companies to smooth out the waves of combining their efforts, noting that they only recently became fully integrated, with NCI stabilized and operating efficiently. The process took four to five months to complete, and morale was negatively affected, the source added.

"There are always challenges in any kind of merger," the source said. "You have different skill sets, and that does have an affect on morale."

Last December, NCI trimmed 30 employees from its total workforce of 200. Then, last summer, it eliminated 21 more positions while reassigning another 20 workers from what was then its 130-member workforce, citing a sales reorganization and the then-pending merger with Navio. Baker told CNET's NEWS.COM at the time of the reorganization that the company had not generated the kind of revenue for which it had hoped.

The source, however, said that NCI now has several new partnerships and deals, and that the company's revenue picture looks a lot different than it did six months ago.

Roux now will become chairman and chief executive of NCI, and also will retain his role as Oracle executive vice president. Prior to joining Oracle, Roux was a senior manager at Central Point Software and Lotus Development.

 

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