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Firm Finds its Niche in Communication Gap

Computers: The need for programs to talk to one another is attracting attention to Software Technologies of Monrovia.

May 22, 2000|ASHLEY DUNN | TIMES STAFF WRITER

For much of its nine years of existence, Software Technologies Corp. of Monrovia has been one of the most obscure technology companies in Southern California.

Even after the company's initial public stock offering last month and a current market capitalization of close to $1.5 billion, the company still has a meager profile, even in its own industry. As does James Demetriades, the 37-year-old founder and chief executive of the company, whose stock is now worth about $600 million.

Part of the reason is the nature of the company's product: a software program that serves as a centralized, universal translator that allows large business computer programs to communicate with one another. It performs a function so arcane and invisible that even within corporate computer departments it is still not widely known.

But the proliferation of specialized corporate software and a need to tie those programs together inside and outside a company have now put Software Technologies in the heart of the hot business-to-business e-commerce movement.

The reality is that most corporate computer systems are a hodgepodge of specialized computer programs from different companies, storing information in different formats. Software Technologies' solution gives companies the flexibility to buy whatever computer programs they want while still allowing them to communicate with one another.

Demetriades concedes that getting Software Technologies known and increasing its market share in this time of booming e-business growth is its most immediate problem.

In the last two years, he said, there has been almost a 100% turnover in the company's sales staff--a result of its search for just the right people to push a complex product.

Software Technologies is also facing a crop of competitors, including IBM Corp., Mercator Software Inc., New Era of Networks Inc., Vitria Technologies Inc. and Tibco Software Inc.

But after two years of losses--the first in Software Technologies' history--Demetriades said the key pieces have fallen into place and the company is ready to march forward.

Within the last few months, some of the biggest names in technology consulting, including Andersen Consulting and EDS, have adopted Software Technologies' products as part of their offerings to customers.

The company's list of customers for its flagship eGate program has been steadily growing, topping 1,200 with such large companies as Hewlett-Packard Co., Fluor Corp. and Barnesandnoble.com.

The business credentials of the company have been polished with the addition to its board of directors of such established executives as Raymond Lane, president of database maker Oracle Corp.

And even in the recent grim Nasdaq decline, the company's stock has fared reasonably well.

On its first day of trading last month, the stock rose from its offered price of $12 a share to close at $20.13.

The stock hit a low of $15.31 early this month but has been heading up since, closing Friday at $21, down $2.38.

Software Technologies "has a lot of longevity and experience behind them," said Lauren Shu, a senior analyst for e-commerce software for GartnerGroup. "Over the last year, we've heard a lot from the small players, but this company is right up there with the big boys. They can play in that league."

Demetriades is the first to admit that understanding Software Technologies' place in the crowded and confusing market is no easy task.

He started the company in 1989 as a one-man software consulting firm specializing in designing business programs for hospitals. His expertise was in getting all the various types of software programs that hospitals used--such as those to track new patients, store X-ray files, calculate billing and monitor inventory--to talk with one another.

At the time, hospitals, like other businesses, used a variety of software programs that all spoke their own languages and stored information in their own formats. A typical hospital could have several dozen separate systems. A large manufacturing firm might have several thousand.

In many cases, the cost of buying a software system for, say, patient admitting and discharge was minor compared with the cost of actually getting the software program to talk with other programs and share its information.

The prospects were bleak because the trend was for hospitals to computerize more of their operations, not less.

One solution was to buy only programs that stored information in the same format and used the same standards to communicate with one another. Companies such as SAP, PeopleSoft and Baan rose to prominence with this strategy, offering enormous software packages that tried to cover all the major corporate functions.

Demetriades' solution was to create a central gateway that would coordinate communication between software programs and automatically translate information into the proper form. Instead of making all the programs the same, his solution allowed companies to use whatever programs they wanted.

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