YOU ARE HERE: LAT HomeCollections

ASHTON-TATE : Confronting a Hard Life in the World of Software

May 10, 1987|VICTOR F. ZONANA | Times Staff Writer

In retrospect, the confrontation was inevitable.

On one side is C. Wayne Ratliff, a rumpled, 40-year-old computer software wizard who wrote the pioneering electronic filing program called dBASE, which propelled Ashton-Tate into the ranks of the Big Three makers of personal computer software, with Lotus Development and Microsoft.

On the other side is Edward M. Esber, the buttoned-down, 34-year-old chairman and chief executive of Ashton-Tate, a by-the-numbers MBA from Harvard who has little patience for the "cult of personality" that has grown up around the PC software business.

Tension Building

"The only industry that is more personality-oriented," snaps Esber, "is Hollywood."

Tension between Ratliff, a solitary software writer, and Esber, the quintessential organization man, had been building since 1984. That was when Esber took control of the firm after 41-year-old founder George Tate--described by many as "the soul of the company"--dropped dead at his desk of a heart attack.

Ratliff had been named Ashton-Tate's chief scientist in 1981 after selling the firm the rights to dBASE II and led the in-house team that developed dBASE III. Still, by 1985, Esber would call Ratliff "no more important to the success of the company than the guy on the loading dock who throws the boxes onto the trucks," according to Ratliff and others.

The simmering feud erupted into a pair of bitter lawsuits in January, after Ratliff left Ashton-Tate and began writing a new generation of database software for a small competitor, Migent Corp.

The dispute could not have come at a worse time for Ashton-Tate. The Torrance firm lost nine key executives last year and must confront sharply heightened competitive and technological hurdles as a new generation of personal computers comes to the fore.

The 7-year-old company's lucrative dBASE line, which dominates the database category and provided 63% of Ashton-Tate's $210.8 million in revenue last year, is being squeezed by more sophisticated programs from above and less expensive, look-alike clones from below.

Worse, Ashton-Tate is growing increasingly isolated from industry giant IBM--even as its principal rivals strengthen their ties to Big Blue.

Microsoft's lucrative strategic relationship with IBM dates to 1981, when IBM picked the Microsoft Disk Operating System--MS-DOS--to run its personal computers. Last month, IBM renewed Microsoft's profitable franchise by endorsing Microsoft's Operating System/2 for IBM's new generation of PCs.

Lotus Development unveiled its own strategic alliance with IBM on April 27. Beginning next year, the two companies will jointly distribute a mainframe computer version of Lotus 1-2-3, the dominant PC spreadsheet program. Other joint software programs will follow.

Company Targeted

All this activity threatens to leave Ashton-Tate out in the cold. Indeed, IBM has taken dead aim at Ashton-Tate, the smallest of the Big Three publishers of PC software. Last month, Big Blue announced--but has not yet shipped--database programs that will allow its new generation of PCs to effortlessly share data with IBM mainframes.

What is more, IBM will include the database software in what it calls the "extended edition" of OS/2, the successor to MS-DOS that will control the computer's basic operations. In other words, IBM's database software will come with its machines.

Some observers contend that Ashton-Tate's dBASE is "a toy" compared to IBM's and others' planned offerings. Esber acknowledges the threats, but notes that Ashton-Tate has an $85-million cash hoard and 18 months to prepare for the IBM onslaught.

Despite Esber's projection that sales will climb to about $300 million this year, Wall Street is worried. Just last month, Ashton-Tate withdrew a planned offering of 2 million shares of common stock.

The firm cited "fluctuations" in the price of its shares--which have lost about one-third of their market value this year, while shares of Lotus and Microsoft have zoomed ahead.

Technical Prowess Questioned

Securities analysts question Ashton-Tate's technical prowess, citing frequent delays in delivering such promised new products as dBASE for Apple's popular Macintosh.

Others fret about Ashton-Tate's high rate of turnover and wonder whether the company can negotiate the new competitive and technical shoals without the guidance of its two founding fathers and the developer of its flagship product.

Tate is dead; Ratliff is a competitor, and Hal Lashlee sold most of his stock and resigned from the board last year. (Lashlee is the "Ashton" in Ashton-Tate. "It just had a better ring to it," a spokesman says.)

Lashlee, whose stock holdings in Ashton-Tate once totaled nearly $100 million, couldn't be reached for comment. Dubbed "the phantom" by friends, he shuns the limelight and divides his time between homes in Venice Beach, Lake Tahoe and Florida.

Los Angeles Times Articles