The deserted QSP stand cast long shadows across Hall 20 at the Softworld 2001 event, but following the shock of the Newcastle-based company sliding into receivership, how will the collapse impact on its former rivals.
Troubled financial software company QSP, went into administrative receivership last week, three weeks after its shares were suspended from the stock exchange.
As the news of the company’s lapse became apparent, the contrasting views of vendors at the show was clear to see. The news came as a blow to some who are attempting to reassure users at such an uncertain time.
Other ‘vulture’ companies were looking to take advantage of the QSP demise, while others were sizing up their options. But what lessons can the market learn from the QSP dramas?
It is often said a company which fails, fails from day one, however in this case there are not one, but three main reasons why the company no longer exists. Lack of resources, the problems of entering an already mature market and finally the poor state of the global economy all contributed to QSP’s demise.
As a result, the bottom line for the company was that it ran out of money. But who do you blame, the management, the banks or the administrators?
It would be harsh to blame the banks, despite their hasty orders to administrators Smith & Williamson to close down the operation. The real responsibility must lie with the decisions made by the management.
Some are already blaming the company’s ASP strategy which tried to make customers accept accounting applications over the internet. But this seems unfair given it had already moved 30% of its customer base in this direction.
QSP’s real problems stemmed from the day it identified at the end of the 1980s a need to change towards becoming a broader based solutions provider. QSP took the technological heart out of its products and rewrote them so that they would be capable of running on multiple platforms such as Unix.
The company was a long-established player in the UK market for corporate financial software. When its revenues and market share started slipping in the mid-1990s, it attempted to move away from pure software development to expand its services business.
It opened a separate NetConsulting wing, acquired a business intelligence software developer and formed an alliance with expenses management specialist Extensity.
It also floated in a bid to widen its capital base and give it an opportunity to extend overseas. But the 1995 acquisition of its US operation proved to be a massive drain on resources.
Management changes followed in 1996 and 1997, but by then, the issue of web enablement had emerged. With the financial hits it had already taken, the company could only afford to pump limited funds into investment in this area – and when the company finally entered the market, it had already matured.
A former spokesman for the company, said: ‘The company had been dogged by bad luck since our formation twenty years ago. There were attempts to reinvent the business using limited funds.
‘Also, the company was not getting the contracts signed – and unfortunately for us, we were a niche company in a field where other companies had the advantage of having been around for longer.’
Market insiders believe the company had been touted around for a couple of years, but it is more likely this is months or even weeks. Receivers will now want to find out who’s interested in QSP’s intellectual property. Customers such as the Bank of England, British Airways and Sony, have some decisions of their own to make.
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