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Informix bets on the Net

CEO Phil White says the Net will spur demand for Informix's Universal Server database. Wall Street wonders.

SAN FRANCISCO--Informix (IFMX) chairman and chief executive Phil White is confident that his company will see a surge in growth this year thanks to the Net. Wall Street isn't so sure.

Speaking at the Robertson Stephens Technology 97 conference here, White said increased use of the Internet through computers built with Intel's new MMX Pentium processors will spur demand for the company's Universal Server database that rolled out last December.

White argued that the Net and the MMX chips will drive demand for multimedia content, noting that it requires more storage capacity and databases designed to store specific types of data. That combination of demands, he said, will drive more corporations to buy Informix's Universal Server, one of a series of new databases.

White anticipates that sales of the Universal Server will constitute a bigger portion of total sales in late 1997 through 1998, compared with Informix's traditional relational databases.

But Wall Street analysts are reserving judgment.

"He presented all the bits and pieces," said Marshall Senk, a Robertson Stephens analyst. "But it's too early to tell if X equals Y equals Z for opportunity."

Senk noted that a clear picture of Informix's software and hardware sales related to its Universal server will not likely be known until 1998. Until then, he said, the database company will largely receive its revenues from its relational database sales.

Senk also pointed out that Informix's acquisition of Illustra--along with its multimedia technology upon which the Universal Server is based--brought relatively few new users.

Wall Street will be measuring the accuracy of White's projections by watching average order size and the number of large purchases of Universal servers in the coming months.

One element that will make the process harder to gauge is the recent restructuring of Informix's sales force. The company used to assign its sales force to particular geographic regions. Now, sales reps will be assigned to customers depending on the industry they serve.

"Rather than have a salesman familiar with databases, you'll need to have a salesman familiar with the telecommunications industry, for example," Senk said.

As a result, Senk does not foresee substantial growth for the first half of the year in this transition period. His earnings estimate for the fiscal year is a profit of 84 cents; he carries a "neutral" recommendation on the company.

White noted that first-quarter growth is expected to be slower than figures for the fourth, as has historically been the case.

(Intel is an investor in CNET: The Computer Network.)