August 6, 1998 9:25 AM PDT
Informix's new strategy
The Menlo Park, California-based database maker announced today that it is forming two new business units to focus specifically on data warehousing and e-commerce, areas that analysts say are among the few growing markets for database sales.
"Informix is declaring our strategic commitment to market areas where our unique differentiation can be clearly recognized and valued," said Bob Finocchio, Informix's chairman and CEO. "Our enterprise customers...are telling us they want us to help solve their emerging new business problems in data warehousing and e-commerce."
And it may solve some of Informix's business problems too. Informix, like competitors Oracle and Sybase, is suffering from a slowdown in the demand for database server software and is looking to augment its revenue from other products and market areas.
The obvious route at the moment seems to be e-commerce and data warehousing, golden markets for many players. Oracle and Sybase have also set their sites on those markets.
"In the Unix world, date warehousing and e-commerce are the lowest hanging fruit," said Brian Murphy, analyst at the Yankee Group in Boston.
Forrester Research in Cambridge, Massachusetts, estimates there will be $327 billion worth of business-to-business e-commerce transactions conducted by 2002 and that revenues from online advertising, subscriptions, and transaction fees will grow to $8.5 billion in the next five years.
As for data warehousing, the Meta Group in Stamford, Connecticut, predicts the "market for data warehouse software, hardware, and services will continue to grow at 40 percent annual compound rate through 1998, from $2.8 billion in 1996 to $8 billion in 1998."
And to tackle the market, Informix is consolidating all product development, service, and marketing efforts dealing with the two areas into the new divisions. Heading up the data warehousing division will be Leonard Palomino, a 13-year veteran of Informix who was leading the North American Consulting and System integration business. Wes Raffel, former head of North American sales, is taking on the Web and e-commerce division.
But the Yankee Group's Murphy said Informix's management and organizational shuffle could be more show than substance.
"The easiest way for management to show shareholders they are doing their job and earning their pay is to reorganize," he said. "In all honesty, this kind of plan, although it makes perfect sense and is appropriate to the market, is essentially Sybase's plan. If the intent was to reflect the market then it's a great idea. If the intent was to show they are doing something new and original, then it missed."
Informix's plan is to have the data warehouse division focus on not only product development but sales and marketing to make sure Informix's products are on corporations' short lists when deciding on a vendor, be it for small Windows NT-based data marts or terabyte Unix data warehouses.
On the e-commerce front, Informix executives said they want to see Informix's Dynamic Server become the server of choice for Web applications. The division is to also work on enhancing the server to better handle high transaction volumes, multimedia, and security.
Informix also corralled its alliance and developer partnerships into a single business unit. Executives said the goal of the new organization is to "recruit best-of-breed [independent software vendors] who are well aligned to Informix's business strategy."