chairman Phillip White, who yesterday resigned his post as chief executive, today outlined the management changes that newly named CEO Robert Finocchio, Jr. will put into place as he takes the reins of the troubled database software company, then turned the podium over to his successor.
White, speaking at the annual Informix users' conference about
the hiring of former 3Com president Finocchio, said Informix is close to filling its vacant chief financial officer position and adding a new executive spot, chief information officer, to its lineup.
White said his successor was selected in order to fix the company's problems while
executing its strategy.
"To ensure we are back on track, and to ensure we can execute, in April of
this year the board and I started a search to bring in a proven executive
to help us to run the business," White said. "The first person I called,
before the search firm even looked at the list of candidates, is the fellow
who now is our president and CEO."
White has been under fire recently from
angry shareholders, with some calling for his resignation at the annual
meeting in May. Investors blame White for Informix's sinking fortunes in
recent months as it focused its marketing and technical efforts on its new
object-relational Universal Server, while scaling back efforts on its
Dynamic Server database.
The company, as a result, reported an unexpected first-quarter loss of
$140.1 million as revenue plunged 34 percent to $133.7 million. White said
the company's goal is to return to profitability by the end of the year.
White noted his departure as CEO was the result of his "focus on the
technology" aspect of the business, rather than
developing a cohesive global marketing strategy, for instance. He noted his missteps
were based on the belief that Microsoft would come on stronger and
faster with its database technology faster than it did, and that content
would be more important, sooner to Informix customers.
"Innovation doesn't always mean great success," said White. "In fact, our
Q1 is a great example of where we were ahead of the market...we think that
market will come dramatically back to us."
White noted the company has changed gears to refocus on its database
products, while at the same time continuing the push for its Universal
"We're now focused on what got us to be the best technology?we're focused
on performance and scalability, we're focused on what customers need to
today and what their future needs are tomorrow," White said.
He added that the company has also realized that Windows NT is not the
"enemy" but rather an opportunity. And the company plans to continue its
support for Unix.
White pointed to Finocchio's role in 3Com's success and his long tenure with
the networking company as assets that will serve Informix well.
Finocchio, also speaking at the conference, said he took the CEO
post for its challenge and opportunity.
He said the challenges to building on Informix's technology foundation lie
in the implementation.
He then briefly laid out five areas he'll address in the short-term.
First on the list is to improve the company's execution skills by getting
the business more predictable and building up its infrastructure to
accommodate its size.
A second area improving the company's financial outlook by getting expenses
in line with revenues.
A third priority is to articulate the company's place in the
marketplace, which is second to rival Oracle. And Finocchio's fourth priority is
building a strong team through such steps as hiring a chief financial officer.
Informix's last CFO resigned shortly after the company posted its
And lastly, Finocchio said he will build on the company's existing
White said "Finocchio will handle the-day to day operations and my role is to get him
up to speed and help set a strategy," White said. "As long as I can contribute to the company, I will stay as chairman."
Shares of Informix jumped roughly 10 percent in morning trading before
settling down to close at 11-7/16, up 5/8 over yesterday. That builds on
roughly 20 percent growth over the past two days; the stock closed at
9-23/32 on Monday.
But will this recent uptick in share price appease litigious Informix
In April, Informix was slapped with a handful of shareholder lawsuits as
the company's financial disclosures came under increased scrutiny. The
suits alleged that Informix and certain of its officers and directors
violated federal securities laws by misrepresenting the company's first
quarter earnings growth potential. The suit also alleged that the
company reported inflated and deceptive earnings because of improperly
Meanwhile, Informix users at the conference said the management change has
raised some concern among the database company's customers.
"It has given me some concern, but hopefully the new CEO will have good
ideas and make the company stronger," said Irina K. Raff, director of
customer and application support for Pepsi-Cola General Bottlers. "This change
won't affect our buying decisions; rather, it's where Informix will be in the
marketplace in a year from now."
Raff said the company is planning its next purchasing round in three
months; she will talk to others at the conference as well as research firms
to further understand where the company is headed.