US-based application development and middleware firm Progress Software is to sell off 10 “non-core” products, and make headcount reductions of up to 15 per cent after disappointing results.
The firm led a strategic review, conducted internally but also with the help of J.P. Morgan, that appears to have recommended a complete change of tack away from its “Responsive Process Management” vision.
CEO Jay Bhatt said the review took five months, and the conclusion was that the firm needs to keep its feet on the ground but get its head in the clouds. Specifically, it will continue to invest in as well as ‘cloudify’ what it now calls its core products – the OpenEdge, DataDirect Connect and Apama Analytics and Decisions products.
Pretty much everything else is getting the heave-ho by the middle of 2013 at the latest, and the list of things that are non-core makes surprising reading. The ten products for the chop are Actional, Artix, DataXtend, FuseSource, ObjectStore, Orbacus, Orbix, Savvion, Shadow and Sonic – many of which were acquired for considerable sums over the years, for example Actional for $32m in 2006 and Savvion for $49m in January 2010.
Anyway, Bhatt said everything will be fine once the plan is executed. “Valuable analysis, market feedback and lessons learned from previous product strategies helped inform our view and we fully intend to evolve Progress into a leaner company that will help to lead the computing evolution from on-premise to the Cloud. The Board and I are confident that Progress has the right DNA, scale and experience to make this transformation successful for the benefit of all stakeholders.”
Shareholders in particular will be feeling a little bruised by Progress’ recent, er, progress (and yes, it did unfortunately trademark the term “Business Making Progress”.) On the announcement of its rather poor first quarter (revenue down 7 per cent, operating and net income both down around 40 per cent) its stock fell 40 per cent in a day.
Perhaps realising that its shareholders’ patience has already worn thin, the firm also announced a stock repurchase worth $350m which could help the shares regain a little ground.
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Jason Stamper is the editor of Computer Business Review.