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CEO Spotlight: Peter Gyenes, Ascential Software Corporation

By Angel Mehta, Managing Director, Sterling-Hoffman Executive Search

Angel Mehta: What does Ascential Software do?

Peter Gyenes: Ascential Software (Nasdaq: ASCL) is the leading provider of enterprise data integration solutions. We provide infrastructure software to integrate data from disparate sources, - a fundamental requirement for any enterprise that depends upon accurate, reliable data for making smart business decisions. Every enterprise has this requirement, but is challenged by disparate and stove-piped systems that created silos of information frequently inherently disconnected from one another and incompatible with one another. 3,000 customers across the globe use our products to connect and leverage data across their strategic transactional, operational and analytic enterprise applications. Examples of these applications include customer relationship management, supply chain management, B-2-B order processing systems, data warehousing.

Angel Mehta: What are the company’s revenues?

Peter Gyenes: We feel that this has been a good year for the company and its shareholders. We expect to close FY2003 on December 31 with approximately $180 million in revenue. This compares with $113 million in FY2002. Looking forward, our guidance for 2004 is for revenue in the $265 to $275 million range.

Angel Mehta: Ascential has been very successful despite the protracted sluggish economy. How have you achieved this?

Peter Gyenes: We’ve seen strong demand for our enterprise data integration solutions driven by data integration issues relating to industry regulations such as Sarbanes-Oxley for corporate governance and HIPAA in the health care sector in the United States, and Basel II in the financial services sector. In these and other sectors, demand is also driven by a need for increased IT efficiencies. Reducing the instances of a particular application or consolidating many applications into fewer instances to simplify and reduce the cost of systems operations and management, or adopting new technologies such as grid computing or services-oriented architectures are examples of initiatives that have strategic impact but whose success depend upon data integration infrastructure software. Increasingly, it is about providing an IT solution that supports and advances an organization’s strategic business goals of increasing business levels, reducing and optimizing costs, and increasing return on assets. Each of these goals by definition requires information that enables a 360-degree view of customers, of supply chain, of business operations. This in turn requires a data integration infrastructure. We’ve doubled our customer base in the past 3 years and continue to expand our solutions within these customers as well as winning new ones. Our services and support teams are also a strategic asset for us and add to our differentiation. They do a fantastic job, which is best reflected in our very high services renewal rate of over 95%. Lastly, Ascential benefits from strong partnerships with technology leaders such as IBM, SAP, BearingPoint, Accenture MicroStrategy and others.

Angel Mehta: You immigrated to the United States as a young boy. Tell me about the experience and challenges of coming over from Hungary as a child and how you ended up starting with IBM?

Peter Gyenes: I was born in Budapest, an appropriate amount of time after my father’s escape from a forced labor camp just before the end of the World War II. My family decided that they wanted to emigrate to New York where there were already some family members. That meant a stopover in Paris, but we ended up staying in Paris for 6 years waiting for the visa to the U.S.. When I was 9 we completed the move to New York City. I was fluent in French and Hungarian at that time, but didn’t speak a word of English. To make things more challenging, my parents decided to send me to a Jewish parochial school. I didn’t speak Hebrew either, so I had to learn two languages at once. Fortunately, as a kid in New York City I also got to learn stick ball, which gave me something I could be good at while all the other kids were making fun of my accent.

I started working at IBM while still an undergraduate student at Columbia University. I worked at a subsidiary of IBM whose business was renting computer time 7 days a week, 3 shifts a day. I worked the third shift, or better known as “the graveyard shift,” all the way through college and in the process learned programming… ultimately became a programmer at Service Bureau Corporation (the IBM subsidiary), and that got me through graduate school.

Angel Mehta: So how did you get into the Sales Management side?

Peter Gyenes: I wanted to work more in customer-facing environments rather than in back office environments. IBM offered me a SE (systems engineer, which is a pre-sales technical support position working with sales reps and customers) role in Oklahoma but being a true New Yorker I couldn’t see myself moving to Oklahoma City. So I went into the job market in New York and was recruited by Xerox Data Systems. I was a pretty good SE and wanted a chance to manage, but didn’t get the promotion when it became available. Instead, the Regional Vice President decided that I would do well as a sales rep. I remember him saying, ‘Just don’t try to be your own SE because when you’re a SE, customers believe what you say about the technology. When you are a sales rep, customers don’t believe you as much.”

Angel Mehta: Let’s move forward a few years. How did Ascential enter the data integration market? What are the key events over the company’s history that led to the company you are today?

Peter Gyenes: Our company began its life as VMark. It was formed by some of my associates from the Prime Computer days in the mid-80s to leverage what was known as the ‘Pick’ data model and build a database platform for open systems. Although I was not part of the original VMark team, I was close to the company as an eventual investor and as a re-selling partner through my roles at Encore Computer and at Data General Corporation.

In early 1996, VMark decided to change management and also to establish a breakout growth strategy beyond what had turned into a niche $50M database business. By the time I joined the company in May ’96, the team was already working on the growth strategy around data warehousing. We developed the strategy around the thought that business intelligence tools were going to be ubiquitous, therefore data warehouses would be as well, and therefore there would be a large need for tools that automate the process of populating data warehouses from disparate operational systems.

We developed DataStage, our core data transformation product, in 1996 and shipped it in January 1997. In 1998, we wanted to be a larger company so that we’d have more of a platform for sustained long-term growth, so we merged with Unidata who was also in the niche database business of VMark, and changed the name of the combined company to Ardent Software. By this combination, we had a $100M very profitable company which provided the means to invest in our growth within data integration. By the end of 1999, Ardent was $160M in size, with $60M of revenues in data integration.

Informix was an OEM partner of Ardent, and they acquired us at the beginning of 2000 to accelerate their strategy of e-business software infrastructure. As a result, I became a board member of Informix, and eventually was appointed its CEO. In the spring of 2001, IBM acquired the database business of Informix for $1 billion in cash. This left us with the data integration business, which at the time was about $100M, with great core technology and products for data integration, about 1500 customers, the beginnings of great partnerships with IBM and SAP and others, a great balance sheet and the chance to build a market-leading company within a major market. We renamed the company Ascential Software Corporation and that is who we are today.


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