Founded: 1983 as Software Renovation Technology
Sales: $113.7 million (1998)
Stock Exchanges: NASDAQ
Ticker Symbol: VIAS
SICs: 7371 Computer Programming Services; 7372 Prepackaged Software; 7379 Computer Related Service, Not Elsewhere Classified
Viasoft Inc. is best known as a leading provider of highly-integrated information technology (IT) solutions for businesses. Its product line consists of integrated technology, software products, and related specialized, professional consulting services, which are typically designed to manage and automate the evolution of large-scale existing COBOL applications software systems. For example, the company’s line consists of programs to extract and build comprehensive information on programs and applications; systems designed to automate the process of analyzing and understanding complex COBOL logic; systems designed to implement desired program changes without introducing undesirable side effects; programs to isolate and extract specific business functions from a program; tools designed to promote speed and accuracy in code testing and debugging; and systems to synthesize comprehensive program information directly from the source code and organize it. Viasoft’s products also assist in the evolution of other information technology (IT) assets, showcasing the technology and services to capture, consolidate, reuse, and evolve critical IT assets. The company also offers professional services designed to help customers address the Year 2000 (Y2K) century date conversion requirements for existing applications and technical support and maintenance for products.
The Early Years
The company which eventually became Viasoft was founded in 1983 in Sunnyvale, California, as Software Renovation Technology. In January 1985, the company moved its corporate headquarters from California’s Silicon Valley to Phoenix, Arizona, with the backing of a group of venture capitalists. This move was made under the direction of entrepreneur LeRoy Ellison, who had previously been the founding president of Kapex Corp., which also developed software to aid programmers and was later acquired by Computer Associates International. After the move, Ellison named Kent Petzold—formerly Director of Western Operations for Pansophic—to the position of President and Chief Executive Officer. The company arrived in the Valley of the Sun with a handful of employees and a product that had yet to be introduced into the market.
In 1986, the company changed its name to Viasoft, combining the Latin phrase for “by way of with the word “soft,” which was short for “software.” During that year, the company released VIA/Insight —a program understanding tool—as its first generally available product. The next product that was developed and marketed was SmartTest (renamed VIA/Smart-Test), which was a tool used for testing and debugging. Smart-Test was followed by SmartEdit (renamed VIA/SmartEdit), a COBOL-intelligent editor.
Viasoft’s business took on a new dimension when the company began to emphasize software solutions rather than individual tools. The first solution introduced was Viasoft’s Insourcing, which combined the company’s Existing Systems Workbench (ESW) toolset with services for enhanced systems maintenance. The ESW products provided the advanced technology necessary to gain in-depth understanding of computer applications, and to automate time-consuming programming tasks—both of which are vital to the effective management of a company’s business. Viasoft’s unique core technology unraveled the intricacies of these complex applications, providing a thorough understanding of how the applications work. ESW provided integrated functionality to manage every aspect of system maintenance and enhancement, while also providing the technological foundation for a range of company-wide initiatives, including Y2K conversion, portfolio assessment, application re-engineering, maintenance productivity improvement, and a transition to new computer architectures.
In 1988, the company established its Annual International Users Conference, to assist companies in application development and systems engineering. Within a decade, the conference would boast more than 700 attendees, representing some 400 companies from 23 countries.
In December 1989, the company joined forces with PC tools developer Micro Focus Inc. to create COBOL tools, allowing cooperative applications in which processing is shared between PCs and mainframes. The tools conformed to the Common User Access (CUA) rules of IBM’s Systems Application Architecture (SAA). Prior to this alliance, Viasoft had been solely a mainframe supplier, and saw the venture with Micro Focus as a chance to build compatible user interfaces between PCs and mainframes. The alliance also produced a new line of complementary COBOL code-editing, testing, and debugging tools from both companies for designing cooperative-processing applications.
An Expanding Focus in The Early 1990s
By 1990, the company was marketing four computer-aided software engineering (CASE) products throughout the world (priced at nearly $40,000 each) and boasted some 150 employees. Sales for the previous fiscal year had topped $12.5 million, and Viasoft had posted profits for two years in a row. The company continued to develop and enhance its ESW products and add solutions.
In June of 1990, the company released VIA/SmartDoc, an intelligent tool for programmers which automatically generated full documentation for COBOL programs. It was the first documentation tool to understand the internal logic of COBOL programs and how they handle data. It collected information directly from the program source code, then analyzed and organized that information into detailed documentation.
Later that year, in September 1990, the company’s board of directors returned Chairman of the Board Ellison to the company’s top executive slot, replacing Petzold at Viasoft’s helm. That year, Ellison was also named an Entrepreneur of the Year in Arizona. Steven D. Whiteman, formerly senior vice-president of sales and international operations for Systems Center Inc., a developer and marketer of network and systems management software, joined the company as vice-president of sales and marketing in December 1990. He would go on to become Viasoft’s president in May 1993, chief executive officer in January 1994, and chairman in April 1997.
By 1992, a growing number of information systems managers were moving their programming tools from the mainframe to the PC, because developers could no longer afford the delays that went along with building software in a mainframe timesharing environment. At that time, Viasoft sped up its move away from work in mainframe environments and toward the personal computer market.
That year, the company created a Client Services Division to support its customers’ efforts in code renovation and engineering using the company’s products. The new division provided consulting partnerships with customer staffs to provide technology transfer, which was designed to speed up customer adoption and success with Viasoft tools. The division also began to offer product training courses.
It was around that same time that the company introduced Via/Insight-OS/2, a version of its COBOL analysis package for mainframes that was designed as part of its existing ESW tools for rebuilding and maintenance of mainframe COBOL systems. The program, however, was designed to run on OS/2 Presentation Manager as part of the company’s transition to PCs. The program’s introduction was a major step in Viasoft’s quest to transform itself into a PC CASE company over the next two years. That same year, the Viasoft also released OS/2 versions of its other development tools: its COBOL re-engineering tool Via/Renaissance (a COBOL re-engineering tool that broke applications into smaller, more manageable part); an OS/2 Presentation Manager version of the company’s mainframe COBOL analysis package (which displayed the code, structure charts, and documentation in different windows, giving developers rapid access to the information they need to make decisions); and Via/Recap (designed to measure the quality of complex COBOL programs).
Viasoft’s mission is to assist Global 5000 companies and other organizations in the effective management of their information technology assets.
By mid-1992, Viasoft’s client list included telecommunications giant Pacific Bell, who used the company’s software to isolate, extract, and reuse code from existing COBOL systems in new systems without harming original programs. Viasoft had also formed a partnership with Atlanta-based KnowledgeWare Inc., to provide redevelopment tools to expand IBM’s Application Development/Cycle (AD/Cycle) CASE software. This was done to meet the needs of users for software maintenance products, as IBM added Viasoft to its International Alliance for AD/Cycle. AD/Cycle products emphasized designing and building new applications, but customers demanded more CASE tools for enhancing their many aging COBOL applications. So the addition of Viasoft to the alliance was indicative of Big Blue’s support for the art of re-engineering existing code, which was the process of analyzing and cleaning up applications code through housekeeping tasks; the elimination of data-name redundancies; making code ready for change; and preparing code to add or move to another hardware platform. IBM and most of its AD/Cycle business partners had previously focused on new application development instead of working with existing applications. KnowledgeWare, already a member of the alliance, developed the Application Development Workbench (ADW)/Maintenance Workstation, an OS/2 front end to IBM’s Inspector, Pinpoint, and Recoder mainframe redevelopment tools. IBM soon began selling five Viasoft mainframe-based re-engineering products.
Also in 1992, the company enhanced its ESW product line with a Common User Access (CUA) interface, Structured Query Language (SQL) database support in all ESW components, and an interface to Computer Associates International, Inc.’s CA-IDMS mainframe databases, which provided access to program functions through action bars, pop-up windows, and pull-down menus.
New Problems and New Solutions in the Mid-1990s
In 1993, the “Year 2000 Problem” (Y2K) was brought to the world’s attention by Canadian consultant Peter de Jager, who wrote an article called “Doomsday” in the September 1993 issue of Computerworld. The problem, involving misinterpretation of “00” in two-digit date fields in computer systems as 1900 instead of 2000, loomed over the entire information technology industry as it moved toward the 21st Century. Analysts and computer experts throughout the world predicted two main scenarios: either computer systems would revert to dates in the year 1900, or they would crash completely. Faced with the realization that most companies and organizations lacked the staff, tools, processes, and systems knowledge to effectively handle this challenge, Viasoft and other similar companies turned their attention toward the growing market of correcting the problem. The move proved to be wise; Viasoft’s total revenue for 1993 (prior to Y2K being a significant part of the company’s work) had reached $20.6 million, but with a net loss of $3.3 million. The following year, however, total revenues climbed to $26.0 million, and the company achieved a net income of $3.7 million.
By February 1994, the company had more than 700 clients in 24 countries, and net export earnings had reached almost $6 million. By March of that year, the company was a recognized name in the Mexican software market, with a client list that included Bancomer—one of Mexico’s largest banking chains. By August, Viasoft had introduced the $45,000 VIA/Alliance program as a part of its ESW line. Complete with a set of cross-reference supports for creating detailed reports on existing applications, and able to format information into a DB/2 database, VIA/Alliance was designed to allow developers to perform impact analysis, inventory source code and job control language so that firms could view the reusable code available to them.
By late 1994, railroad pioneer Union Pacific Railroad Co. had joined the Who’s Who list of Viasoft clients. Union Pacific had a history of consistently deploying technology to keep ahead of its competition, and utilized Viasoft’s ESW product line to enhance its software maintenance operations. Use of Viasoft’s products made the job of operating some 750 trains—180,000 freight cars daily—over more than 17,000 miles of track more feasible for the Omaha-based railroad company. In April 1996, the Union Pacific addressed its Y2K compliance problem by again bringing in Viasoft to perform an impact assessment of its old codes.
Having achieved a great deal of success and having landed a number of big-name clients, Viasoft launched a successful initial public offering (IPO) in March 1995. By mid-year, the company started what is now known as the “Providers” program, which generated wider market penetration.
In 1995, Kevin Schick of Gartner Group, Inc., a highly-respected, publicly-traded computer consulting firm, estimated that fixing the Year 2000 problem (which he called “the biggest single information project the world has ever faced”) could cost as much as $600 billion, “a suitably terrifying number that grabbed the world by the throat,” as described in the August 1996 issue of Fortune. It launched a flurry of articles on the problem. In April 1995, Viasoft released Enterprise 2000, a Y2K software and consulting package aimed at helping companies convert legacy systems to handle dates after 1999. The program comprised an impact-analysis component, development of a project plan, and implementation of that plan—all of which were marketed separately, with the first piece being offered for $30,000. Viasoft’s total revenue for 1995 rose to $31.0 million, with a net income of $5.2 million.
In October 1996, the company joined forces with IBS Conversions Inc. to expand the platforms available for Viasoft’s Y2K solution. Together, they incorporated Chicago-based IBS’ Y2K date analysis and scanning services for companies with AS/400 systems into Viasoft’s Enterprise 2000 product, enabling programmers to identify faulty date codes and estimate costs necessary for conversion projects. Later that year, Viasoft also entered a joint agreement with KPMG Peat Marwick LLP to market the latter’s year 2000 consulting services with Viasoft’s millennium programming software.
The company ended 1996 with the acquisition of R&O Software-Technik GmbH, which added the ’ ’Rochade” repository to Viasoft’s product line. The Rochade repository is a specialized IT database that allows an organization to capture, reuse, and evolve information assets. Its architecture, power, and stability also provide a solid environment for the integration of all IT assets in a company, while managing complexity, facilitating communication, and providing a company-wide view of business processes. To do this, Rochade leverages the latest information technology, including client/server architecture, Internet and Intranets, object orientation, and graphical user interfaces (GUIs). This enables the reuse of IT information for initiatives such as data warehousing, modernization of systems, tool integration, the Y2K conversion process, and European implementation. Total year-end revenues for fiscal 1996 jumped to $43.6 million, with a net income of $6.2 million.
The End of the Century and Beyond
In 1998, Viasoft assembled the technologies for OnMark 2000, its distributed Y2K solution, and unveiled a suite of tools for European implementation. In January of that year, the company acquired EraSoft Technologies, a Calgary, Alberta, Canada-based provider of Y2K assessment and analysis software for desktop environments, for $7.75 million in cash.
In February 1998, The Mutual Life Insurance Company of New York (MONY) selected the company’s ESW integrated suite of software development tools to complete its Y2K code conversion compliance project. The 155 year-old mutual life insurance company, which sold the nation’s first mutual life insurance policy, installed the technology at its Syracuse, New York site, which provides customer-related services to more than a million MONY policyholders and clients throughout the world. Also in February, the company gained Caldor Inc. as one of its Y2K clients. The fourth-largest discount department store chain in the United States, with 157 stores in ten states and annual sales of approximately $2.6 billion, Caldor acquired the technology in order to have its mainframe systems maintained at the highest possible levels in order to expand its business functions and keep its information technology costs low.
In June 1998, the company further bolstered its growing client list by signing a licensing agreement with the fifth-largest chemical company in the world—Dow Chemical Co.—for the use of Viasoft’s ESW2000. Although the company’s stock fluctuated from 1997-98, the Year 2000 Problem continued to plague Global 5000 companies, and Viasoft’s Y2K programs offered solutions. Thus, the company could count on steady business growth as the millennium grew near.
As the end of the century approached, Viasoft was serving customers throughout the world, including many “Global 5000” corporations and similarly sized organizations, through a worldwide network of independent distributors. Viasoft had domestic sales offices located in the following U.S. cities: Ros-well, Georgia; Chicago, Illinois; Dallas, Texas; Herndon, Virginia; and Westford, Massachusetts. The company also possessed international sales offices located in the following countries: Australia, Belgium, France, Germany, Japan, The Netherlands, and The United Kingdom. Competitors have included Alydaar; BindView Development Corp.; Data Dimensions; McCabe and Associates Inc.; Micro Focus/Burl Software Laboratories; NetSuite; SEEC Inc.; Sterling Software, Inc.; and Knowledge Ware Inc.
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—Daryl F. Mallett