Compuware Corp - Move Into E-commerce Software And Services

MOVE INTO E-COMMERCE SOFTWARE AND SERVICES

In the mid-1990s, Compuware acquired Uniface Holding B.V., a client/server software producer based in the Netherlands, and CoroNet, a management systems software maker based in Los Altos, California. Compuware then renamed CoroNet's software EcoS-COPE and merged it into its EcoSystems software line to increase the comprehensiveness of its network management tools, including those related to e-business. The firm continued its plan of growth via acquisition with the 1996 purchase of London-based automated software testing products and services provider Direct Technology Ltd. and the 1997 purchase of NuMega Technologies Inc., one of the world's largest manufacturers of error detection and debugging software for Windows and Java systems.

Because mainframe computers—what Compuware's software attempted to debug and enhance—were losing ground to Internet-based networks, the firm shifted gears in the late 1990s. It devised a plan to spend a few years preparing firms for the Y2K transition and then retain many of those same firms by offering them e-commerce services and solutions once the transition was complete. In 1997, to position itself as an authority on the impending Y2K transition, Compuware published Millennium, a newsletter about the effects the year 2000 could have on the computer industry. Sales exceeded $1 billion for the first time that year. Millennium was published online in 1998.

To augment its growing base of e-commerce holdings, Compuware purchased CACI Products Co. in 1999. The firm integrated CACI's application capacity planning tools into its EcoSystems suite, allowing clients to better manage the performance of their e-commerce applications. Although Compuware was ultimately successful in its efforts to become a leading Y2K consultant for companies operating mainframe systems, it soon found that it had overestimated the number of clients who would be looking to move into e-commerce early in 2000, and underestimated the amount of time it would take to train its Y2K specialists to function as e-commerce consultants. As a result, the firm failed to meet earnings forecasts for the first time in several quarters, and stock prices tumbled by roughly 80 percent in 2000.

Despite the difficulties Compuware experienced as it worked toward becoming a full-scale e-commerce service provider, it continued to expand into other ventures. For example, in 1998 Oakwood Healthcare Inc. and Compuware established a joint venture called CareTech Solutions Inc. to offer technical application services to healthcare providers. The firm also continued to add to its software offerings. The acquisition of Programart Corp. marked Compuware's first foray into application performance management (APM) software. In 1999, the company moved into the western and southeastern regions of the United States when it bought Data Processing Resources Corp.

In 2000, Compuware turned two of its acquisitions—Montreal-based Nomex Inc., a provider of Web design and development services, and Kansas City-based Internet consulting services provider BlairLake Inc.—into digital development centers (DDCs). The DDCs were designed to offer full-scale e-commerce services to clients wishing to undertake e-business ventures. A third DDC was soon opened in Farmington Hills, Michigan, at the firm's headquarters complex. The purchase of Optima, an e-business performance measuring software developer, further increased Compuware's e-commerce holdings.

Network Computing magazine named Compuware's Application Expert 2.1 as the recipient of its Editor's Choice Award in 2001. The firm developed the product in response to growing demand by e-business operators, particularly those with increasing traffic, for tools that would allow them to manage their Web sites' performance. Compuware's Application Expert helps clients to pinpoint problems and their causes and also recommends solutions. Also in 2001, the firm unveiled a version of its Abend-AID program designed specifically for e-business applications and upgraded its EcoPredictor to include the ability to use simulation to predict potential network bottlenecks. Research has indicated that online customers who wait more than eight seconds for a page to begin loading will likely go to another site. Compuware's products, which work to address these crucial performance issues for e-businesses, seem to bode well for the firm's future as an e-commerce software developer and service provider.