Ecometry extends its HP 3000 lifespan
Support strategy changes after buyout of firms
The founders of Ecometry have retired and sold off
their e-commerce firm, but that transaction wont change things
for customers as much as another retirement. The new owners of the
company will mothball the strategy that all of its HP 3000 customers
must leave the platform by HPs Dec. 31, 2006 support
Ecometry was founded by Will Smith and Allan Gardner,
and those two men sold the privately-held company in December for an
undisclosed amount to a partnership of equity firm Golden Gate
Capital and current Ecometry executives led by CEO John Marrah. Smith
and Gardner retired after building up the application supplier which
still counts one of the biggest single groups of HP 3000 packaged
Marrah said that Ecometry, bolstered by Golden
Gates $2.5 billion wallet, will pursue an aggressive
acquisition strategy in 2005, buying companies to both extend its
customer bases and advance its technology. But in the meantime, he
said Ecometry will spread the word that HP 3000 sites can expect
application support of its MPE-based software during 2007, and
Were going to extend support of
Ecometry, Marrah explained, because of the advent of the
3000 support network. Its really becoming a reality.
Marrah said in early January that the company
hasnt decided yet on any end date for MPE-based Ecometry
support. Up through the end of 2004, customers had been told for
three years that Ecometry wouldnt support HP 3000 installations
But in exchange for the support extension, the
company will ask its 3000 customers more than 70 percent of
its 380-company base to move up to the most current version of
Ecometry, 6.11/7.0U, to be eligible to remain on their HP 3000s.
With the year-end holiday rush behind them,
Ecometrys sites can consider changes to their systems for the
next six to nine months this year. Customers have reported they will
be migrating slowly, if at all.
We are going to get as much life from our HP
3000 as possible, said Todd Bostwick, Ecometry analyst at
Teachers Discovery. We do not want to migrate, and
homesteading is our first option at the moment.
Other sites have been waiting for an event like this
before they make a decision about going forward with Ecometry on
We have no plans of moving off the HP 3000, MPE
7.0 and Ecometrys 7.0 application, said Tony Luna at the
United Methodist Publishing House. This issue will be up for
review in October, 2005. Until then we will sit and see what
Customers who run their businesses with the HP 3000
version of Ecometry will not see major modifications and
enhancements, Marrah added. We are doing new UPS [shipping]
updates, and credit card updates, he said. The things
that are necessary to keep that platform alive and running, we are
doing. But we stopped doing enhancements nine months ago on that
For the people that the 3000 is doing
everything they need, theres no need to change or
migrate, Marrah said. If theyre happy with that
platform, and theyre able to get third-party support,
thats great. I dont want to force them off.
As the clock ticks down to the end of HPs 3000
support, Ecometry will point its customers at all of those
great third-party support companies, Marrah said.
Ecometry wont be realizing additional revenue
for moving its 3000 customers to the latest application release, he
added. Its free to them, Marrah said. If we
can get them on the current versions, its easier for us to
provide better support.
The company regained profitability at the end of
2003. The red ink surfaced when Ecometry was creating an open systems
version of its application while weathering a downturn in the
economy. The dot-com boom created new customers through 2000, but its
bust coincided with Ecometrys investment in developing a
non-3000 version of the software. Migrating customers to the new
version has taxed support profitability.
We never increased support costs, Marrah
said. We migrated customers almost for free. Over the last four
years we cut the companys resources almost in half, had a
hugely significant decrease in revenue, increased customers,
increased support requirements and built a new open systems product
that weve got 90 customers on today.
Outside enthusiasm, inside management
Ecometry stepped up to its new name it was
known as Smith-Gardner around the same time that Smith and
Gardner took the firm public in 1999. That IPO raised $53 million in
capital for the founders and shareholders such as Marrah. He started
as Chief Operating Officer and became CEO in 2001, and his share of
the company was essential to the buyout.
I owned 25 percent of Ecometry, Marrah
said, and we found a financial partner to help us execute a
strategy of growth.
Smith and Gardner attempted to sell the company back
into private status in 2003, but a deal with Syngistix fell through.
The two founders then paid shareholders $2.70 a share in a
transaction that cost Ecometry more than $30 million to go private.
The stock had run as high as $22.63 at its peak.
Back in 1999 and 2000, the company was posting yearly
revenues of more than $45 million and had a workforce of 400. Its
experience in catalog commerce applications made it a leading choice
for e-commerce, as mail order companies ramped up their Web-based
sales outlets using HP 3000s. Its client base has represented some of
the best-known companies among HP 3000 users, including Nordstrom,
Lego, Time-Life, Brookstone, Hickory Farms, Levenger, Nine West,
Coach, and Urban Outfitters.
Golden Gate, which owns HP 3000 user Herbalife, was
excited about buying into Ecometrys future. We are very
excited to invest in Ecometry, said David Dominik, a managing
director at Golden Gate.
Ecometrys HP 3000 customers have been slow to
move to the open systems product up to now. Marrah said 30 HP 3000
shops have made the switch to open systems versions of the
application, adding that the Windows version of Ecometry remains the
migration target for more than 90 percent of the shops.