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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 Foster.
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Publication:Computergram International
Geographic Code:1USA
Date:Feb 2, 1999
Words:495
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