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Inprise CEO, CFO resign

Inprise chief executive Del Yocam and chief financial officer Kathleen Fisher resign abruptly, a day after the toolmaker's first quarter closed.

    The departure of Inprise chief executive Del Yocam, hired two years ago to steer the once high-flying toolmaker back on the right path, has plunged the firm back into uncertainty, analysts say.

    Yocam and chief financial officer Kathleen Fisher resigned abruptly yesterday, a day after Scotts Valley, California-based Inprise's first quarter closed. An Inprise spokeswoman said their departures are not tied to the quarterly results, which will be released in mid to late April.

    "Del had been on vacation the past several weeks. I don't know how much of a surprise this was to everyone, but it was not considered imminent," the spokeswoman said. "There's some thought that Del felt he had done what he could have done for the company and he's been commuting for two years from Oregon. That it was a combination of those two reasons."

    But one analyst thinks Yocam's departure and the quarterly results are connected.

    "They say there's no connection, but certainly the timing is suspicious, especially since they gave no [official] reasons for the resignations," said analyst Brian Goodstadt, of Standard & Poor's Equity Group. "I won't be surprised to see other defections until they come up with a new management team that can annunciate a clear strategy to get the company back on track."

    In the interim, Inprise will be run by an executive committee made up of James Weil, president of the Inprise division; John Floisand; president of the Borland.com division; Jay Leite, formerly vice president of business development and now acting as interim chief financial officer; and Hobart Birmingham, vice president and general counsel.

    A spokeswoman at the company said the board is actively seeking a CFO replacement from outside the company, and are considering their options for the top spot.

    Analyst Mike Gilpin of Giga Information Group, was not surprised by Yocam's resignation. "The circumstance was that he was a turnaround specialist, and although it appeared he was executing on a plan, things didn't turn out as planned," he said.

    Yocam, previously Apple's executive vice president and chief operating officer, replaced Gary Wetsel as head of Inprise in the summer of 1996, after the software tools company suffered dismal quarterly earnings.

    Yocam attempted to steer the development tools company into the lucrative enterprise software business, serving large corporations.

    Last spring, the company bought middleware firm Visigenic Software and changed its name from Borland to Inprise to reflect the new strategy of providing enterprise and middleware software for businesses. At the heart of the company's strategy was an application server, which combined technology from both Borland and Visigenic.

    But Inprise has struggled. In the fourth quarter, the company laid off 190 employees after reporting a net income of $3.5 million on $48.2 million in revenue. Sales were $1 million below Wall Street estimates.

    Yocam restructured the company this spring into two divisions: Borland.com, focusing on its development tools, and Inprise, specializing in enterprise and middleware products.

    The problem, Gilpin believes, was that Yocam couldn't get the company's enterprise software team to work with the development tools division.

    "There was so much company history with the [development tools] part of the company that it was not in synch with the new strategy, the application server-centric view of the world," Gilpin said. "It tore the company inside and reflected on Borland.com being separated."

    Gilpin said Yocam had the company headed in the right direction.

    "He defined the new Inprise mission around application servers and the unification of that with development tools. That was the right mission and had the greatest promise to turn a profit in the future," he said. "The problem is to achieve that, you have to get the troops marching in the same direction, and for some reason, that didn't happen."

    Goodstadt agreed. "It seemed like he had the company on the right path for a little while, but the past few quarters have been difficult," Goodstadt said. "They're facing some real tough competitors out there, like Microsoft, that have made it tough for them."

    Analysts said it was probably a mistake to have changed the company name from Borland to Inprise. And the new leader needs to take better advantage of the Borland name, which resonates with software developers who recall the company's early years under founder Philippe Kahn.

    "It's not to say they should change the company's name back to Borland, but they should not forget the Borland legacy. That it's a good development firm for developers," Goodstadt said.

    But both analysts said the middleware market is growing rapidly, which should benefit Inprise financially in the future.

    Goodstadt said Inprise might make a good acquisition target for some competitors because its stock price is low. But an Inprise spokeswoman said management has no plans to sell the company.

    Some analysts have speculated that Sun Microsystems might be interested in purchasing Inprise for its Java development tool called JBuilder. But Sun executives have declined to comment on the speculation.