OSH flotation targets mid-range IT rivals

US accountancy software group Open Systems Holdings floats on the Alternative Investment Market tomorrow as part of its UK launch.

The company, with a planned capitalisation of #10m, plans to sell its 32-bit Windows, Microsoft Access-based accounting software product Traverse through a network of around 200 resellers. Traverse is pitched squarely at the highly competitive mid-range sector, taking the likes of Sage Sovereign head on.

Company chief executive Michael Bertini, who bought the business from Unisys in 1990, said the AIM launch reflected the commitment the company planned to make in the UK. He said: ‘We could have set up a small subsidiary here, or sold directly. But we felt that as a publicly listed UK company it would send a strong message to potential buyers.’

And Bill Wolff, OSH’s chief operating officer, said the AIM flotation took the company a step beyond other US and continental European accounting software developers who have set up in the UK with little success. ‘Getting into the reseller channel has been their problem. But our approach by listing here is very different. It shows we are here for the long term,’ Wolff said.

OSH will remain based in Minnesota but, as part of its flotation, it plans to move corporate R&D to its UK offices in Tunbridge Wells. Bertini said R&D investment had left relatively little funding for expansion.

He added: ‘We are currently investing 41% of turnover in product development.

Next year is dedicated to setting up our reseller channel and getting established in the UK.’

Analysts described OSH’s expectations as ‘ambitious’, but the company’s software got the thumbs up. Jyoti Banerjee, managing director of Tate Bramald Consultancy, said: ‘Traverse is ahead of the competition, but to really make it in the UK the company needs more resources. It is completely modern, uses the Microsoft Access environment, unlike Sage Sovereign or Pegasus Opera, and will offer excellent integration with other Microsoft applications.’

The product’s features include full credit card payment handling, foreign languages, sales and commission calculations and multimedia – Traverse will store photographs in the stock control module. Banerjee commented: ‘A number of these features are increasingly desirable, but standard products don’t have the graphical environment that Traverse offers.

‘I think OSH’s plans to get 200 value-added resellers in the UK within a year is ambitious. It has set itself a tough task and setting up a complete UK operation from day one is a tall order. But, if the flotation goes well and it devotes a third of the proceeds to the UK, this will be a terrific start. No one else has come to the market at that level with a product that is ready to go. It has a vision of becoming an international company but with massive UK presence.

‘There are many imponderables, but it has thought through many of the options. It comes down to whether UK investors are prepared to take a punt on the company. I’d say it was a typical high-technology stock – high risk but with high potential for growth.’

DELETING COMPUTER FILES

Computer security remains a pressing problem and keeping tabs on sensitive client information should always be a priority. The subject came to the fore last week at Reading Crown Court when a former salesman was convicted of blackmailing a chartered accountant by asking her to pay for confidential information he found on a computer she had once used.

The salesman repeatedly contacted Elizabeth Anfield after he stumbled across private files about her clients on the hard disk of a leased computer.

The ex-salesman told his victim that for u1,000 he would ensure the information was not shown to her clients and the English ICA. The salesman, Michael Wilkinson, was convicted of blackmail after a seven-day trial and now faces a jail sentence. The court had heard how Mrs Anfield, of Newbury, Berks, had thought the files had been erased from the computer when she handed it back to the lease company in July 1994. But, when the same computer was leased to Wilkinson, he found information containing details on about 450 separate clients on the hard disk drive.

Mrs Anfield notified police after she was contacted by Wilkinson and he was arrested after meeting her in October 1994. The police had already taped telephone conversations between the two.

The prosecution told how Wilkinson had claimed he was the director of a high-powered company called Mol plc, which regularly gave security advice to banks and building societies. The defence admitted that Wilkinson had ‘delusions of self-importance’, but denied intending to blackmail.

The case highlights the problem of deleting files. Although users may believe they have removed confidential documents from their hard disks, software does exist to retrieve them. The majority of leasing companies can advise how to delete files permanently. Most people do not realise how vulnerable their files are. Unfortunately, it takes a case such as the one above for them to discover the truth.