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Can anyone save Ashton-Tate?

CAN ANYONE SAVE ASHTON-TATE? To us, the only truly interesting question about Ed Esber's abrupt departure as Ashton-Tate's chief executive is this: Will it make any difference? Some Tate-watchers think the reshuffling at least gives the company a little breathing room. "There's been tremendous anger toward Ashton-Tate, a huge negative aura," dBase expert Adam Green says. "Now the attitude of the user base will be different. Whoever takes over in Ed's place can certainly count on a honeymoon effect."

Well, maybe. But we predict the honeymoon effect will be short-lived. Apparently, Ashton-Tate's top management -- not just Esber -- feels the next release of dBase IV should ship soon despite a fair amount of residual bugginess ("but better than the industry average," according to marketing (vice-president Joe Brilando). That's bad enough for a product whose first release was notoriously flawed. Worse, Tate has promised to swap every copy of that almost-unusable first release with the new version. Result: At least 200,000 copies of dBase IV 1.1 will flood the market almost overnight. If there's anything wrong with the early copies of this new version, Ashton-Tate will have another major embarrassment on its hands. End of honeymoon.

And once the post-Esber honeymoon is over, Ashton-Tate will have to face exactly the same problem Ed couldn't solve: Pulling the company out of a spiral of declining sales and monster losses. For the moment, the board has appointed a caretaker team (led by president Bill Lyons) to manage daily affairs. Presumably, the company's top priority is to recruit a new chief executive or, worse case, to find a friendly buyer who won't gobble the company up. But we're convinced that Ashton-Tate's problems are so deep-rooted that changes in the executive suite aren't enough. To survive, Ashton-Tate may have to be torn apart and rebuilt from the bottom up.

Tate's most critical weakness--its disorganized and anemic development group--is no secret. In fact, it can be argued that Ashton-Tate's own developers never successfully created a major new product by themselves. Every key Tate title (including dBase itself) originated outside the company. At most, Tate's internal development group contributed upgrades--and many of these have failed dramatically to keep up with the competition. Product design, scheduling, debugging, performance testing--Tate's development group somehow never quite mastered any of these basic skills.

Moreover, Ashton-Tate's long history of marketplace snafus suggests that its reputation as a marketing organization is also a bit overblown. The company has persistently ignored, antagonized, and discouraged professional application developers ("they don't buy much product," Brilando told us), who make up the most influential segment of the dBase community. As long as distributors and Fortune 1000 buyers can be persuaded to place big orders, Ashton-Tatehs marketing department seems content--even though the company's market share continues to collapse at an alarming rate.

Ultimately, we believe Ashton-Tate suffers from the most dangerous of all problems--a corporate culture that has become profoundly self-destructive. Talented employees tend to leave the company; the survivors (yes, there are still good people left) have to spend much of their energies fighting instability and creeping mediocrity. In a sense, Ashton-Tate is no longer even a real company: It's a collection of private fiefdoms.

That culture--and Ed Esber's loose leadership--may have been adequate when the company owned a dominant product in a fast-growing, open-ended market. But the database market is far less forgiving than ever before. Besides the hostility of its own customers, Ashton-Tate faces increasingly capable rivals in the database arena. Borland and Microrim both have new versions on the market that are winning favorable notices, and both companies have mapped out server-oriented strategies that highlight Ashton-Tate's backwardness in this area. The mainframe database companies, particularly Oracle, covet Ashton-Tate's PC franchise; both Lotus and Microsoft are trying to carve out pieces of the database marketplace. The waters are full of hungry sharks, and Tate is bleeding badly.

Perhaps more importantly, the dBase language and file format have turned into commodity standards. Increasingly, there are easily accessible alternatives to Ashton-Tate's brand of dBase. Esber's answer was to threaten lawsuits that scared almost no-one (except customers), while letting competitors seize the high ground in technology, performance, and ease of use. Clearly, that strategy didn't work: The dBase clone companies now own big pieces of Ashton-Tate's former market, and more dBase-compatible competitors jump on the bandwagon every year.

The next Ashton-Tate chief executive may find a surprise solution to these problems. We hope so; watching a great company disintegrate is never a happy experience. But for the moment, we suspect that Ashton-Tate's next few years are going to be pretty stormy--regardless of who takes over at the top.
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Copyright 1990, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Date:May 7, 1990
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