SAN FRANCISCO (08/10/2000) - This time, troubled U.S. database and tools vendor Informix Corp. has got its turnaround strategy right, according to a senior company executive. The contraction of Informix's operations into two units instead of five, along with around 500 job cuts announced Thursday, could be just what it takes to finally refocus the vendor and ensure its future profitability, he believes.
Effective Wednesday, Informix said it had taken its five business units and condensed them into two -- database business operations and solutions business operations -- as a way to better focus its sales, marketing and development efforts. [See "Informix to Take Q3 Charge, Revamps Organization," Aug. 9.] Then, early Thursday, the company confirmed the restructuring operation will entail the loss of around 500 staff. [See "Informix to Lay Off Nearly 500 Employees," Aug. 10.]The key to the latest in a string of Informix reorganizations, and the reason this one may yield more success than previous attempts, is its simplicity, according to Pete Fiore, senior vice president of the vendor's new solutions business operations unit.
The company's management team is currently conducting a "bottom-up analysis" of Informix's business which it hopes to complete by the end of this month, Fiore said. "We need to do fewer things, (but do them) better than Informix has done in the past," he added.
Fiore suggested that Informix might terminate some of its software that isn't experiencing high growth, while migrating customers away from such products to other, more profitable Informix offerings.
"We need to decide where we invest and where we stop investing," he said.
"We've got to invest less in some areas and more in others." Fiore wouldn't be drawn on which Informix business areas would receive less or more funding, or which software may be discontinued.
Informix hopes that by restructuring its business units and cutting jobs, it can streamline the decision-making process, improve financial performance and simplify the message Informix is trying to communicate to both its remote staff and its customers, Fiore said.
"Customers have said that the message coming from the company is kind of confusing -- Informix has not clearly articulated its corporate strategy," Fiore said. "The strategy needs to be more clearly articulated and by a smaller group of (Informix) people."
As an example of previous duplication in the vendor's operations, he referred to Informix's database server technology which, prior to Wednesday's restructuring, stretched over three business groups. "There was a lot of redundancy and duplication of people and resources," Fiore said.
The 500 or so job cuts confirmed Thursday are worldwide and are occurring primarily in Informix's financial, administrative and marketing organizations, according to Fiore.
Informix also plans to revamp its marketing operations. In the past, the company's marketing efforts left something to be desired, as Informix staff concentrated on creating high-level brand awareness campaigns to the detriment of building programs to generate strong sales leads, Fiore said.
"I don't think there are any magic bullets here," he said, talking about the overall restructuring and refocusing effort. However, Fiore stressed the experience of the fairly recently installed management team now leading Informix.
Most of the management team came to Informix through its acquisition earlier this year of data warehousing specialist Ardent Software Inc. Peter Gyenes, Informix's latest chief executive officer, appointed last month, is the former chairman, CEO and president of Ardent. [See "Informix Board Member Becomes Firm's New CEO," July 13.] Fiore was previously Ardent's vice president of worldwide marketing.
"We do have a new and different management team that has worked together in the past with some success," Fiore said. "We have very strong experience in building sales and marketing operations."
He admitted that the absorption of Ardent into Informix has taken longer than the company had hoped. However, the integration of Ardent and Informix sales operations around the world is now complete, Fiore said.
Informix users and partners are sticking by the company as it negotiates its latest turnaround in fortunes and reorganization, Fiore maintained. "Their reaction to what they're hearing (from us) is very positive... they're giving us the benefit of the doubt," he said. "It's our job to deliver (on our strategy.)"Informix's announcement late Wednesday that as of Aug. 14, it will begin buying back 6.4 million of its shares is an important step towards reassuring users and partners of the company's commitment to both its new strategy and its future, Fiore said.
Informix, in Menlo Park, California, can be reached at +1-650-926-6300 or http://www.informix.com/.