Information Builders, Inc. History

Address:

Two Penn Plaza
New York, New York 10001
U.S.A.

Telephone: (212) 736-4433
Fax: (212) 967-6406

Private Company
Incorporated: 1975
Employees: 1,700
Sales: $263 million (1996 est.)
SICs: 6794 Patent Owners & Lessors; 7372 Prepackaged Software; 7373 Computer Integrated Systems Design

Company Perspectives:

Information Builders develops and markets software and professional services for the creation of high-performance business information systems at large, data-intensive organizations. These products and services form an integrated yet open technology framework for Enterprise Data Access, Enterprise Decision Support Systems, Data Warehousing, On-Line Transaction Processing Applications, Internet Integration, and Packaged Application Integration and Productivity.

Company History:

Information Builders, Inc. (IBI), a computer software firm, is one of the largest privately held companies in New York City. It ranked among the world's top 20 independent software vendors in the mid 1990s and was recognized as an industry leader in fourth-generation-language (4GL) technology, specializing in information access and analysis. A 4GL is designed to help users create complex data queries and build client/server applications around databases. IBI's Focus software was the most widely used 4GL product in the world by 1990. Focus and the company's other software all shared a common middleware architecture intended to eliminate the complexities and support headaches that could result from adding new vendors each time a new application systems was required. The company also offered technical support, training, and a complete range of professional consulting services from its 85 worldwide offices in 1997.

Focus-Driven Growth, 1975--87

Information Builders was founded in 1975 by Gerald C. Cohen, Peter Mittelman, and Martin Slagowitz. Cohen, a native New Yorker who in 1997 still lived on Manhattan's Upper West Side where he grew up, remained president and chief executive officer of the firm through the late 1990s. A graduate of St. John's College in New Mexico, Cohen began developing Ramis software--often cited as the world's first 4GL--with an engineering team at Mathematica, Inc., in 1965. "We pioneered an industry," Cohen later told Mike Bucken of Software Magazine in a 1990 interview. "Ramis was the first non-procedural language and the first to be sold outside [the] IBM [sales force]."

Once Ramis had been developed, Cohen took charge of selling the product. This experience gave him new ideas on selling software directly to large corporations and led him to leave Mathematica in order to found Information Builders with Peter Mittelman (also a Ramis developer) and Martin Slagowitz. "Mathematica was really a consulting firm," Cohen explained to Bucken. "Selling software by a strictly consulting company wasn't the way to go. ...That was the reason I left."

Information Builders quickly created Focus, a software product that allows computer users who want to manipulate a database--names and addresses on a mailing list, for example--with little training and using standard English. Originally intended as a mainframe-oriented product that could be accessed remotely through time-sharing systems, Focus was itself developed on leased IBM mainframe time, bartered from a software service company that also provided seed money and terminals. Additional funding in IBI's first year came from RCA, which also agreed to purchase a Focus license while it was still being developed, and Tymshare, a Silicon Valley-based service bureau that contracted to distribute the product for use over its network. "When we started out, our clients did credit checks on us," Mittelman recalled. "Now we do credit checks on our clients."

Time sharing fell out of widespread use by 1980, but leasing the original Focus, designed to run on IBM 4300 machines, to time-sharing firms was vital to Information Builders during its early years. By contrast, turning to direct sales of the software, Cohen recalled, was "a very big decision" that required a significant investment. "Time sharing had given us an unparalleled opportunity," he told Bucken, "but we could see that people were going in-house [to develop applications]. So we began to build an infrastructure to sell the product." This infrastructure was completely funded internally from the company's steady stream of license fees.

Information Builders secured its first international contract, from Datema Co. of Sweden, in 1977. The company's first subsidiary opened in London in 1980, followed by InfoBuild, a Canadian subsidiary, in 1982. FUSE, the first Focus user group (training center), was formed in 1979, with the first branch established in Palo Alto, California. Information Builders had 25 employees and about $3 million in annual revenues by 1980.

The firm made an early marketing decision to sell Focus not as a database management system (DBMS) but as an "information builder." "We knew that if we went in and said we were a DBMS vendor, they would say they already had one," Cohen explained. David Kemler, hired as the company's first salesperson in 1977 and later becoming its sales and marketing vice-president, said that, from the start, Focus was marketed as "a 4GL front end. We were precluded from going into large shops and saying we had a database because they already had IMS [from IBM]." Nevertheless, most users purchased the Focus DBMS as an option with the 4GL, and by 1990 it was being used in 99 percent of IBI's customer sites, according to Kemler.

The revenue stream from time-sharing licensees also enabled Information Builders to fund development of a version of Focus for the personal computer market. The company first attempted to enter the PC field in 1980 by porting Focus to the Apple II model but decided the computer was too slow. In 1982 IBI began work on a version for the IBM PC. Just as it was determining that this model also lacked adequate performance, IBM came out with its improved XT version. Focus was ready to serve this computer when the first shipments of the machine were made in 1983, thereby enabling Information Builders to become an early power in the microcomputer business.

In 1985 the PC version was expanded with a single-user release, the addition of a network version, and a host-language interface to enable programs written in traditional programming languages to create, build, and maintain PC/Focus databases. Upgrade kits were free for customers under IBI's extended maintenance and service contract, $550 for other current users, and $1,595 for new users.

Focus versions for the Digital Equipment Corp.'s VAX line and Wang's VS-based systems were released in 1986. They were followed by versions for the Macintosh PC, variations of the Unix operating system, the NCR Workstation 300, and the Convegent Technologies Ngen computers. Focus versions for the proprietary minicomputer offerings of Hewlett-Packard Co., Tandem Computers Inc., and IBM's AS/400 were released in 1988. Each version was in effect a different product requiring a separate development and marketing team.

By the end of 1987 Information Builders was among the three largest privately held software companies in the United States, with revenue expected to top $110 million in that year. Focus, the market leader in fourth-generation language, was still the company's only product, with an estimated 29 percent of the market at U.S. IBM and plug-compatible manufacturers' sites. IBI had added capabilities for graphics, spreadsheets, and report writing to core database-management systems such as IBM's IMS and DB2 and Digital's Rdb.

New Products, 1987--95

In 1987 Information Builders made its first acquisition, Level Five Research, Inc. Cohen believed that this Florida company would help IBI offer more decision-support products to its Focus lineup, such as problem analysis and intelligent documentation. Level 5 was an expert-system shell running on MS-DOS-based personal computers and Digital minicomputers running VAX/VMS. By 1990 work had been completed on a Level 5 module to include with Focus, and a team was working to develop versions for all Focus platforms. IBI was also marketing PRL3, an expert-system development tool for the VAX, and Insight 2+ for IBM PC's and compatibles.

Cohen told Computerworld in 1987 that Information Builders was "not selling product but selling service." The firm was offering service that year at 20 offices around the United States and had 125 employees to help customers get their applications running. By 1990 IBI had 53 user groups in the United States. It also had opened a development center in Paris. A German subsidiary opened later in the year. IBI was ranked in 1991 as the 15th-largest independent software company in the United States, with 1990 revenues of $191 million, up from $130 million in 1988 and $155 million in 1989. The company claimed 600,000 Focus users in early 1990. It had sold 100,000 PC Focus licenses and installed 5,000 copies of mainframe and minicomputer Focus versions.

Information Builders introduced a new product line, EDA (Enterprise Data Access) in 1991. The purpose of this product was to gain entry into the fast growing client-server market, where networks of small computers communicated with each other or mainframes. The problem to be solved was access to data in the huge range of incompatible machines, operating systems, and databases in corporate networks. EDA/SQL used an ANSI (American National Standards Institution) version of SQL as a standard interchange format. Running on a PC or workstation, the client bit of EDA/SQL "talked" to the server bit, running on a file-server, minicomputer, or mainframe. The server then talked to a range of databases, which might not use SQL. In Europe, however, not many databases, and even fewer applications programs, were using ANSI SQL, so that other products were also needed to service this market.

By the end of 1997 the EDA family of middleware products extended the reach of virtually any application or tool that supported either SQL or RPC, for transparent access to more than 65 of the most widely used proprietary databases, files, and application programs in 35 interconnected operating environments.

By 1993 Focus was running on about one million computers, with 35 percent of sales derived from overseas, mainly Japan. PC-based versions of Focus were selling for $795, while those designed for mainframes cost $150,000. More than half of the Focus software was still running on mainframes, but this business was dwindling as a share of the total market. Focus still accounted for 80 percent of IBI's revenues whereas EDA/SQL, including several upgrades and new versions, brought in only about 10 percent. IBI was also doing design work for select clients including the U.S. Air Force.

Information Builders joined an alliance in 1994 led by Amdahl Corp., best known for mainframe computers compatible with IBM. Amdahl announced it would enter the market for massively parallel database machines to be built by nCube Corp. using software from IBI and Oracle Corp. Amdahl claimed that the alliance would develop electronic repositories that could store and retrieve vast amounts of data.

Also in 1994, IBI came out with its first version of Focus for Windows software. Interviewed by InformationWeek, Cohen acknowledged that the Focus business was slowing down but predicted a rebirth when the company came out with a graphical-user interface version. He also observed that the VAX market was declining and that the company had experienced a "disastrous time in Europe," but he added that its European subsidiaries had been rebuilt and that business overseas had rebounded. Acknowledging that IBI's EDA business had been slow to meet expectations, Cohen defended the product line, saying that it was "growing fast."

Information Builders' revenue came to $227 million in 1993 and $243 million in 1994, of which packaged software sales were $200 million and $204 million, respectively. During 1994 the company introduced Focus Reporter for Windows 1.5, as well as Focus Personal Service and EDA/Copy Manager for Lotus Notes for the IBM AS/400. The company signed agreements with Oracle and Informix to build new middleware gateways for their flagship environments and announced an expanded relationship with Microsoft to deliver an integrated family of EDA/SQL solutions for the company's Windows NT operating system. By 1995 the company had 28 sales offices in the United States, with 500 people in the field. It also had three offices in Canada and 13 international subsidiaries.

Information Builders in 1996--97

Information Builders introduced WebFocus in 1996, a tool designed to let database administrators display reports on the World Wide Web. Users could display charts and graphs using any standard Web browser. WebFocus worked with most common databases and was fully compatible with the IBI client/server reporting system. Another IBI introduction that year was Cactus, a software product for developing and partitioning three-tier applications spanning heterogeneous operating systems, mainframes, midrange servers, personal computers, and workstations. To work correctly, Cactus required programmer training in a proprietary language and EDA/SQL server products.

In 1997 Information Builders prepared to move its headquarters from 1250 Broadway to nearby Two Penn Plaza, leasing three floors for a total of 179,000 square feet of office space. It also added 30,000 square feet of space at nearby 330 West 34th Street for back-office operations. The 15-year leases were valued at more than $100 million. In order to keep the firm from moving its 800-plus employees to New Jersey, New York City contributed nearly $5 million in sales tax incentives and cheap energy. IBI retained about 27,000 square feet--two floors--at 1250 Broadway. The company had 10 foreign subsidiaries and representatives in 25 foreign countries, plus Hong Kong and the Gulf states. IBI regularly published technical journals, a quarterly newsletter, and a features magazine.

Principal Subsidiaries: Information Builders Belgium S.A.; Information Builders (Canada) Inc.; Information Builders (Deutschland) GmbH; Information Builders France S.A.; Information Builders Iberica S.A. (Portugal); Information Builders Iberica S.A. (Spain); Information Builders (Netherlands) B.V.; Information Builders Pty. Ltd. (Australia); Information Builders Switzerland A.G.; Information Builders (UK) Ltd.

Principal Divisions: Enterprise Data Access; Integrated Solutions; Micro Products; Open Systems; Specialized Systems.

Information Builders, Inc. History

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