Visix Software Falls Off the Map

Visix Software Falls Off the Map

Visix headquarters in Reston, Va. The software tools company closed down this month.

By Bob Starzynski
Staff Writer

Visix Software Inc., a hot software tools company in the Washington market just four years ago, closed shop this month after the company's board of directors voted it out of business.

Spun off in 1989 from American Management Systems Inc. of Fairfax, Va., Visix blossomed into a 250-person company with $50 million in annual revenue in 1994, according to sources familiar with the company. They said the company had a stretch of 20 consecutive profitable quarters - a rarity with software start-ups.

But after several years of marketing and sales missteps along with changes in the software tools market, the Reston, Va.-based company fizzled to 13 employees last month before closing down.

The company's phone recording does not acknowledge the shutdown, but the Internet address no longer connects to the company's site. An empty office building prominently situated along the Dulles Toll Road is still crowned with the company's name.

According to Visix literature from 1996, its large customers included AT&T, Delta Air Lines, Sony, J.P. Morgan, Xerox and NASA.

Barry Libenson, a longtime business development executive with Visix who served as chief executive officer for the final five months, would not comment when reached at his home last week.

Gene Bedell, Libenson's predecessor who worked for the company only one year, could not be reached for comment.

However, sources familiar with the company agreed that Visix had great products but lacked the marketing panache to sustain long-term growth.

"It was a company of very strong technology but little marketing understanding," said Stan Dolberg, a former vice president of marketing at Visix. He is now an analyst with Forrester Research in Boston.

Visix made a name for itself in the early '90s, developing software products to run on C and C platforms. As the company started to grow, it also started to diversify.

When Java - a next-generation software language - was still in its infancy, Visix was putting tens of millions of dollars into Java development tools, sources said.

Although its new Java product was well-engineered, it cost more than other products on the market.

"They were still charging the higher prices; they weren't moving with the trends of the industry," said Mitch Kramer, a market analyst with Patricia Seybold Group in Boston who has followed Visix for the past five years.

"That was the straw that broke the camel's back," said Kramer. "After that [product] release a year ago, the company got really quiet."

Aside from the recent pricing problems were the earlier, failed marketing efforts, said one source who used to work closely with the company.

"It was a group of engineers who thought that since they had great technology, it would sell itself," the source said.

Additionally, said the source, while Visix turned its attention to new Java products, it began neglecting its bread-and-butter C products.

The source said that Java tools vendors are not generally doing well in today's market, despite interest in Java's potential.

Instead, information technology budgets are being spent on making computer systems compliant for the year 2000.

As the product problems worsened during the past three years, the company was weakened by the constant turnover of its executives.

First, Jay Wettlaufer, the first chief executive officer of Visix, stepped aside in 1996 but retained the chairman title.

Chuck Teubner, Wettlaufer's replacement, quit abruptly six months later. A former senior vice president of Sybase Inc. of Emeryville, Calif., Teubner was supposed to be the marketing guru that would orchestrate a more pronounced effort on the Visix sales front.

Next came Bedell, the founder of Seer Technologies Inc., who came to Visix in September 1996 and left 14 months later. (Sources said Bedell was shown the door at Seer after turning the company's initial public offering into one of the 1995's poorest performers.)

By the time Libenson took over the company six months ago, Visix was too far gone to salvage, said one former employee. "[Bedell] bet the farm on Java and lost," the employee said.

Because Visix was a privately held company, it is difficult to determine its owners or board members.

Contacted at his home last week, Wettlaufer said he still held a 10-percent stake in the company when it closed down, although he stepped down from the board two years ago.

Wettlaufer added that most of the ownership of Visix was held by venture capitalists but he would not elaborate.

One employee said Ken Marshall, former president of Giga Information Group in Cambridge, Mass., was also a board member and shareholder of Visix. Marshall could not be reached for comment.

Dolberg said John Grillos, a former manager at investment banker Robertson Stephens in San Francisco, was also a board member of Visix. Grillos also could not be reached.

Typically when a software company goes out of business, the firm sells its products or technology to another company in order to maintain service for customers still using the products.

Dave Kelly, vice president of application strategies with the Hurwitz Group in Boston, said Visix has not sold its products.

"They executed an orderly shutdown and have not sold the technology to any other company, leaving their existing users to fend for themselves," said Kelly, who has covered Visix as a product and market analyst for the past five or six years.

No sources could give an indication of who Visix's primary customers were at the time of the shutdown.


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