CROSSWORLDS LOSES CFO AND FOUR VPS, BUT IPO STILL ON.
CrossWorlds Software Inc insists that it is still on track for an
initial public offering in the third quarter of this year, despite
losing five key members of staff - including its chief financial officer
Robert J Habig - over the last few months. Following on from the
departure of high-profile board member Frank Quattrone, CEO of Credit
Suisse First Boston's technology group at the end of last year (CI
No 3,556), the departures have set tongues wagging among the application
integration industry that CrossWorlds has bitten off more than it can
chew, and is realizing it can't live up to the promise of the hype
it's generated over the last year or so. That is strongly denied by
Barton Foster, senior VP worldwide marketing & business development.
"Some say ours is a mission impossible - we tend to differ."
He does admit that CrossWorlds, which is attempting to put in place a
universal architecture and toolkit for pre- packaged, pre-built
components to support the most common application integration
requirements, has a "difficult and costly" task, which
isn't yet fully completed. The departures, which also include Bill
Phelps, vice president of client services, Lu Kabir, VP of business
development, Rob Evans, director and VP of West Coast sales, and
marketing exe cutive Mike Donaldson, are part of a wider headcount
reduction at the company which saw 15 staff in all cut from the
company's 200 strong payroll recently. Foster, who has taken on the
roles of both Kabir and Donaldson, says the reorganization was made with
an eye on profits, and claims the break-even run rate has been reduced
by 20%. They aren't all cuts, he says: Phelps was replaced by three
new VPs after a decision to reorganize services in order to make them
more regional. Habig's departure was the result, admitted Foster,
of "a mistake over the type of person we originally set out to
find." Habig was "a big company guy" with experience at
firms such as Pepsi and First Data, but "we needed someone
who'd been through an IPO and had investment bank contacts."
The decision over his departure was "mutually agreed" says
Foster, and the search is now on for a new CFO, who CrossWorlds hopes to
have in place within six weeks. CrossWorlds has yet to file its S1, the
initial stage of going public, but it's clearly signaling its
intent, with CEO Katrina Garnett now a regular speaker at analysts'
conferences. Foster says contract bookings for fiscal 1998, its first
full year of product shipment, topped $23m, generating $9m in revenues,
and that CrossWorlds now has 32 customers, nine or ten of them live.
Between them, he said, those customers are implementing "the full
breadth of the product." CrossWorlds has in the past been
criticized for reticence over its customers and a failure to come up
with a convincing reference site for its full product. CrossWorlds is
still on track to see its first profits in the third quarter, says