 December 1996, Vol. 7, No. 12
As the world turns
Sysdeco soap opera spins off media business (Atex, et al.)
What is it about the late fall or early winter? The leaves turn, the air gets nippy and the business once known as Atex suddenly lurches.
It was at this time of year in both 1992 and 1994 that Atex changed owners, and it is at this time of year in 1996 that a change in ownership has been signaled once again.
The board of directors of the embattled Sysdeco Group AS of Oslo, Norway, voted in November to spin off the media business -- which sprung from the company’s acquisitions of Atex, ComIT, Dewar and SyPress Oy -- into its own stand-alone company.
The board took this tack about the same time it was revealing more losses for 1996.
What went wrong? There are probably three key issues Sysdeco management overlooked when it decided it wanted to be in the "media" business (it ain't media, it’s publishing):
Synergy, smenergy: The stated rationale for Sysdeco’s interest in Atex, et al., was that a division devoted to publishing would open doors of opportunity to Sysdeco to sell publishers its core technology -- the Systemator tools that allow for the rapid development of database applications.
It sounded good. It probably looked good, on paper: more than 700 sites worldwide, each eagerly awaiting a Sysdeco sales person to come in and solve all its problems.
The downside was that publishers don't see tools as solutions (picky, picky); they see them as tools. Publishers want solutions. Sysdeco learned only after it had been in the industry that newspapers would buy products developed with Systemator, but not by Systemator itself. Oops.
Own and control: The top Sysdeco executives were adamant about owning all the technologies the company sold. This is why it bought SyPress and Dewar -- SyPress had written the core code for the Enterprise classified front-end, Dewar had written the core code for DewarView, the editorial front-end.
These acquisitions saddled the Sysdeco Media Group with R&D costs, and flew counter to the direction in which most other suppliers were going -- either concentrating on R&D or concentrating on integration and sales.
As the publishing industry entered the arena of "open" and "off-the-shelf" solutions, it had become apparent suppliers could only afford to concentrate on a small sliver of business -- either you provided a niche product, or you developed software that was sold by others, or you integrated components and sold directly to customers.
The Sysdeco managers built a business that looked suspiciously just like the Atexes and SIIs of the 1980s -- a model that had failed in the ’90s.
Newsprint: Who would have thought that newsprint prices would skyrocket? Who would have guessed that publishers would raid capital expenditure budgets to pay for high-priced paper (and therefore not buy systems from companies like Sysdeco)?
Anyone with a minute of experience in publishing -- which was something the Sysdeco gang lacked.
The blow-by-blow account -- and an interview with the chief executive of the "new" media business -- is inside.
Also inside is a compelling look at how many newspapers are handling the issue of getting their print content on-line. The concept of "shovelware" is derided, but it’s something everyone uses, found Correspondent Marion J. Love.
On the flip side of that equation, Correspondent L. Carol Christopher shows us ways to acquire content for newspaper web sites from wire services and syndicates.
And, lastly, your humble correspondent visits the new America West conference and trade show, held Oct. 23-25 in Reno, Nev.
Holiday cheer desk: Seven years ago this month I spent a week at my dining room table putting labels on the first issue of this newsletter. Probably the biggest improvement in the seven years is that now professional label-attachers handle the chore (hi, Marge).
Ninety-six has been a good year for us and we hope that it -- and the holiday season that’s about to descend upon us -- has been good for you.
Thanks for your business. Here’s to a great ’97.
-- David M. Cole
See also Hellbox
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