Vision and Timing: Be There When Customers Are Ready

Software Magazine, June, 1999

Operating Philosophy has Served Sterling Software Well

Geno P. Tolari, executive VP and COO of Sterling Software, joined Sterling in 1985 when the company acquired Informatics General Corp., where he was a VP of professional services. He served for nine years as president of Sterling's Federal Systems Group and two years as president of the Systems Management Group. He was named COO in 1996. The Federal Systems Group grew from $8 million to $100 million in annual revenue during his presidency. He spoke with Editorial Director John P. Desmond.

Q: With the acquisition of Platinum Technology by Computer Associates, the industry sees more consolidation of heavyweights. Now there are fewer bigger companies left and Sterling is one of them. What are your thoughts about industry consolidation?

A: I don't think there are fewer software companies today than there were a year ago, and more companies are starting each day. There is a tremendous amount of competition out there and a tremendous opportunity to make acquisitions where that makes sense.

With BMC buying Boole and CA buying Platinum, it is true that, among the traditional systems management companies, there are not as many big companies today. Still, some are growing fast, such as Veritas. We are one of the big companies today, but there are still many acquisition candidates and no less competition.

Q: Platinum's stock price reached a vulnerable low range, creating the opportunity for the acquisition. If you were at Platinum, what would you have done differently?

A: Their operating system was different from ours. From the beginning, we have been led by strategy and fitting acquisitions into our strategy. We integrate the acquisitions when they make sense. There have been times when we've left them there for a while, and times we have integrated them instantly into a complete product portfolio, with a marketing message and sales people in place. When we hit the street, we hit with all of that at the same time. We have always had a focus on earnings per share. We believe in consistency.

Q: How should IT managers think about Sterling?

A: When IT managers look to us, they see financial stability. They also want technology vision. Many companies have that, but the real challenge is to make sure that the technology vision does not get too far in front of them. So you need vision and the right timing, to be there when your customers are ready.

Customers are the most important assets you have. You need to make sure you understand their strategies. We have customer advisory boards we pay close attention to. They let us know where the customers are going and we match to that cycle.

Q: What is Sterling's overall strategy in the application development area?

A: We are the vendor of choice today for enterprise-scale or very high-end applications. That comes from the legacy of KnowledgeWare's modeling tools, which were CASE tools, and the Texas Instruments generation capability. But that market is changing. Some felt that OO would replace everything right away, but we're seeing that component-based development (CBD) is the choice of the future. Also, there is a lot of application integration going on. That is the new way of describing application development. As companies consolidate, acquire, and do mergers, they have legacy systems, and packaged applications from different companies that need to work together. They need to be able to integrate that, plus get additional capability. So part of what we've done is to offer state-of-the-art tools to make that happen.

Q: Can you comment on how you are integrating the Cayenne tools?

A: We had COOL: Jex and they had Object Team. We've tried to take the best of both and pull them together under COOL:Jex. It helped us take a leap forward in OO A&D. Also, Synon had pattern-based development. In a lot of applications, patterns get repeated. They give you a head start. COOL:Plex gives us the capability of having a pure NT solution and a pure AS/400 solution; the developers can generate to either platform.

Q: What is the key priority for Sterling in the next 12 to 18 months?

A: In the application development area, people are now moving to CBD. There have to be standards there, and the capability to wrap existing legacy systems and treat those as components, and to handle foreign components and packages like SAP. We're a leader in that, and we're working with our customer advisory board on that.

In storage management, we see people moving to storage area networks (SANs). Some of our packages or tools are already SAN-enabled; we need to stay a leader in that and be teamed with the right people. Another trend is that IBM had been shipping their TCP/IP stack with their systems, so people are now adopting the Internet protocols to run the OS/390. They need to be able to manage the OS/390 in an IP environment. We have the tools to help with that.

Q: Who is the competition today for Sterling?

A: Our customers are interested in developing and managing applications as opposed to system resources. That is becoming very, very complex. No one vendor can provide all of it. That is causing a lot of "coopetition."