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Informix has uphill battle

The database software company is continuing its comeback attempt but still faces the larger challenge of winning new customers.

Informix Software (IFMX) is continuing its comeback attempt based on new technology and a renewed product line, but the company still faces the larger challenge of winning new customers.

The database software company is making a sincere effort to attract new customers and retain existing users. In the past few months, Informix has simplified its product lineup and has focused on new products that fill specific market niches. And, ever so slightly, the strategy is beginning to pay off.

This week, Informix announced a tool for analyzing data housed in its Dynamic Server database. The ROLAP (relational online analytical processing) Option 4.0 lets users query data warehouses and data marts either from a standard client application or through a Web browser.

The software also includes administration features that let managers restrict access to sensitive data, a capability needed as data warehouses are opened up to Web users. Pricing starts at $37,000, plus $1,295 per concurrent user.

Informix marketing managers are also busy spreading the word on other technology offered by the company, such as its Universal Data Option that allows multimedia data to be stored and managed by the company's Dynamic Server database. Last week, the company trumpeted that it had broken the 1,000-customer mark for its Universal data technology.

But after a series of setbacks--financial turmoil, management shakeups, lawsuits, and a Securities and Exchange Commission investigation among them--the company is still hampered in its quest to win new business at the high end of the market and to grow its flagging revenues.

"Technology has never been the issue for Informix," said Merv Adrian, an analyst with Giga Information Group. "Financial issues are really hurting them."

Adrian said the company needs to continue to hone its marketing message and to show that its sales team can win major contracts before Informix will be able to lure significant deals away from competitors. Even if Informix manages to get its house in order, other issues may stand in the way of a true comeback.

While Oracle, Sybase, and other competitors have sought to balance their database business with a healthy dose of technologies such as development tools and middleware, Informix has stuck to its knitting and continues to position itself primarily as a database software company, according to CEO Bob Finocchio.

That strategy, which means Informix is totally focused on its core products, leaves it with nothing to hedge itself against what appears to be a slowdown in the database market.

Also, Informix is aiming for the top of the Fortune 1000 with its database software, where the company thinks it has an advantage over Oracle and where Microsoft, a growing force in the low end of the market, has no presence at all.

While the high end is--along with database software running on Windows NT--one of the few growth areas in databases, analysts said competition is heating up.

Adrian sees IBM and NCR subsidiary Teradata making a renewed push to win high-end data warehousing business in the coming year. That could leave Informix scrambling for business vs. two well-heeled competitors.

And, since Informix is fixated with high-end Unix and Windows NT business, that means it could miss out on smaller Windows NT deals. But the company's well-respected technology has helped it to snare several new customers in the past few months.

This week, Informix said it has inked a deal with Hana Bank, a large Korean financial institution, to build a data warehousing system. It signed a deal with GTE late last year to supply software for a Web-based law enforcement service. And earlier this month, the company said it has expanded a deal to supply Egghead Software with technology for its e-commerce Web site.

To stay on this comeback trail, Informix needs to convince potential customers that it is on solid financial ground.

"They are after the high end of the market and those buyers are concerned about the viability of the company," Adrian said. "They are not buying throwaway stuff--they're looking for strategic partners."