enterprise software vendor System Software Associates (SSA--Chicago, IL) named
Robert Carpenter as its new Chief Executive and Chairman of the Board. Carpenter
succeeds the retiring William Stuek, the former IBM executive put in charge
of SSA's turnaround several years ago. While Stuek was able to stabilize the
company during his tenure, it has never regained its former industry position.
Carpenter comes to SSA from systems integrator Origin B.V. (Eindhoven, the Netherlands),
the IT arm of Dutch corporate giant Phillips, where he was president and CEO
of Origin America (Murray Hill, New Jersey). While at Origin, Carpenter significantly
increased both the company's IT services and outsourcing revenue, turning it
into a profitable venture.
is that the timing of this event is long overdue. SSA continues to hemorrhage
cash (it posted a 3Q99 loss of $6.7 million - not including restructuring and
other charges of $22.8 million) and revenues declined 32% from the same quarter
one year ago, making it the company's 7th consecutive negative results quarter.
SSA's financial situation deteriorated so much that the company had to change
its stock ticker symbol and execute a 1 for 4 reverse stock split (reducing
the total number of shares available). Its current market capitalization is
only around $40 million, and its balance sheet is in shambles ($65M of negative
With that in
mind, we find it very difficult to see SSA's resurrection, despite its large
customer base and attractive product portfolio. SSA's chance of surviving, in
a consolidating market, with new competitors arriving from all directions, declining
revenues, and continuing losses, are slim without a substantial cash infusion
from a big partner or a potential acquirer.
Due to their
dire financial situation, any organization evaluating SSA should exercise extreme
caution, consider existing functionality only, and be able to provide the majority
of product support in-house or through a 3rd party.