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Shell to spin off software company

The oil company says it will spin off Kalido, which lets large organizations manage multiple business transactions in a single location.

The Shell Group, parent company of Shell Oil, said today it would spin off software company Kalido, which lets large organizations manage multiple business transactions in a single location.

Conceived in 1996 inside Shell's information technology group, Kalido's data warehousing software is directed at global companies looking to link their products and transaction histories across different continents and different currencies.

The company will be a fully independent entity but entirely funded by the Shell Group. There are plans for an IPO spinoff in the next two years, the company said.

"It's success ratio has been so good that it made sense to spin it off into its own company," a Kalido representative said.

An oil company spawning a software unit may sound unusual, but analysts say it isn't the circumstances. Large corporations often develop specialized products within their IT departments, which in turn take on a life of their own.

In the case of Kalido, the move was strategic in that the company will now unify its focus. Already, executives have been hired from IBM, Oracle and Cognos.

"It made more sense to spin them off and bring in executive management from Oracle and other places than to have shell, which is plastics and oil, run a software company," a Kalido representative said.

IDC Analyst Dan Vesset said he believes Kalido will be competitive against large players like Oracle, given its partnership with Shell and the benefits of its product.

"When one company acquires another, Kalido allows data warehousing to link the two sources and create a unified environment," Vesset said. "In any data warehousing, over 75 percent of the effort and time is spent getting the data out of the underlying systems. Kalido simplifies that."