Electronic Data Processing Plc, the UK supplier of turn-key technology systems to wholesalers and distributors, is finding its transition into a software and services organization a difficult one. And the company is laying most of the blame squarely at the door of Microsoft Corp and its failure to deliver on Windows NT 5.0. Managing director […]
Electronic Data Processing Plc, the UK supplier of turn-key technology systems to wholesalers and distributors, is finding its transition into a software and services organization a difficult one. And the company is laying most of the blame squarely at the door of Microsoft Corp and its failure to deliver on Windows NT 5.0. Managing director Richard Jowitt isn’t just cross, he’s absolutely hopping mad. The Sheffield-based company saw its net profits for the year to September 30 fall 32% to 1.2m pounds on revenue that dropped 12% to 12.6m pounds as the hoped for sales of NT-based software failed to materialize. EDP has been trying for several years to reduce its reliance on low margin hardware revenues and to emphasize its supply chain and distribution management software, aimed at large wholesalers and distributors in vertical markets like timber and plumbing supplies. Jowitt has long been convinced of NT’s total inability to run his breed of software with any reliability, insisting that for now, it simply isn’t capable of replacing Unix. But his clients want NT, even though Jowitt insists that the equivalent NT-based hardware will cost twice as much as a Unix installation. If anybody tells you any different, then they really don’t know what they’re talking about, he said. EDP has had to spend a fortune in research and development, porting its software to NT and Jowitt has been keeping the development work open to accept the promised extra functionality of NT 5.0, the first version he thinks might be capable of running this scale of installation. First Microsoft said it would be ready in June 1997, says Jowitt, but then it was delayed until March 1998, and now they say it’s the back end of 1998. EDP was gunning for big increases in published software sales this year to help supplement the downgrading of hardware sales and related maintenance. But the delays have cost him dear, and he’s fuming. In fact, EDP has given up the wait and will release its products for NT 4.0 in the first quarter of 1998. With Microsoft’s past track record of never ending delays, perhaps Jowitt should have seen all this coming. But in spite of these problems, EDP is highly cash generative and it does still have over 8m pounds in cash. It’s been poised to buy out a major unnamed competitor for what seems like an age now, but according to Jowitt, the price is still way too high. He wants struggling competitors to put their customer bases up for sale, but without inflated premiums for what he regards as their pre-historic mainframe technology. The total dividend for the year stays unchanged at 2.2 pence (final dividend 1.533 pence) and the shares fell 7 pence to 55.5 pence.