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Esber Steps Down as Chief of Troubled Ashton-Tate

May 01, 1990|CARLA LAZZARESCHI | TIMES STAFF WRITER

Edward M. Esber Jr. resigned Monday as chairman and chief executive of Ashton-Tate Corp. after struggling for 18 months to rescue the Torrance software publisher from problems caused by the release of an error-riddled version of its most popular personal computer program.

In a shake-up widely expected by Wall Street analysts, Esber, 37, will be replaced by William P. Lyons, an Ashton-Tate vice president and former IBM executive, who was named president and chief operating officer. In addition, Carmelo J. Santoro, 48, the chairman and chief executive of Silicon Systems Inc. in Tustin and an outside director of Ashton-Tate for the past seven years, was named chairman of the Ashton-Tate board, a position expected to give him direct oversight over Lyons' activities. He will not be an employee of Ashton-Tate.

"It was time for a change," Santoro said. "The board felt the company needs to be operated by a guy with a short-term, tactical mentality who can focus on the internal operations of the company. Bill is that kind of guy. . . . Ed's strength is not operations."

Esber, a Harvard-trained MBA who joined Ashton-Tate in 1984, declined, through a spokesman, to be interviewed. However, in a prepared statement, he said the moves "were in the best interests of Ashton-Tate and me." For the immediate future, Esber will serve as vice chairman of the board.

The executive suite changes, which became effective Monday, are the latest attempt by Ashton-Tate to reverse a steep slide that began nearly 18 months ago and to avoid the crash-and-burn fate that has befallen other software publishers that once appeared to have a market firmly in their grasp.

Founded 11 years ago, Ashton-Tate pioneered what is now a $500-million-a-year market for PC database management software and clearly dominated it until 1988 with its dBase products, a lineup that accounted for up to 80% of the company's sales. Since the release of a bug-filled dBase update in October, 1988, Ashton-Tate's fortunes have steadily soured.

As customers continue to wait for a corrected version of the new dBase program, sales have slipped and the company has suffered losses of about $40 million during the past four quarters. Last year, a generally strong year for software publishers nationwide, Ashton-Tate's sales skidded $2 million to $265 million, dropping the company from third- to fourth-largest software publisher in the nation. More devastating, however, was the erosion of the company's share of the database market from a once-enviable 80% to less than 50% by some current accounts.

Analysts have consistently said the root of the company's problems has been its lack of the necessary technological vision and hands-on operational management to guide it through the maze of product shifts, customer demands and technology explosions. And they have faulted Esber for failing to correct the problems.

Ultimately, several analysts said Monday, the problems became too big for Esber.

"They had to placate the outside software developers that the company depends on and squelch the internal strife," said James Weil, an analyst at SoundView Financial in Stamford, Conn. "So Esber agreed to step aside."

David Bayer of Montgomery Securities in San Francisco predicted that Esber will remain at the company in a "holding pattern" until he finds another position. "That's the mold this scenario is fitting at this point," Bayer said.

In an interview late Monday, Lyons, who joined Ashton-Tate in October, 1988, said his goals are to bring stability and a measure of predictability to the management of the company's franchise product line, dBase. "We have to give our customers regular, predictable updates of this program," he said. "We don't need revolutionary advances every time."

Before joining Ashton-Tate, he was employed by IBM for 19 years, most recently as vice president-PC software marketing for IBM's national distribution division.

Santoro said no particular event triggered the board's action, which evolved from a series of discussions that began at a board meeting last Thursday. However, he said the board was upset at the delays in getting a correct version of dBase IV to the market and with the company's decision to release the original version with bugs.

Six months ago, Esber was confident that he could lead the company out of its slide and that he would have the last laugh on the analysts who had been bashing the company.

"All I ask for now is time," he said then. "Give me a year. Be patient with me. And don't count me out."

BACKGROUND

The shining superstars of the technology industry change regularly, particularly in the fast-moving personal computer markets. Ashton-Tate of Torrance was once one of those high-fliers, but a series of missteps at the software publishing house has lowered its orbit considerably.

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