Vantive's Blues
During the past year, CRM software maker Vantive Corp. suffered bruising managerial upheaval, lackluster earnings and plummeting stock values. In the wake of such tumult, industry observers think Thomas L. Thomas, the man Vantive's beleaguered board recently hired to resuscitate the company, has his work cut out for him.
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"Vantive is growing, but it is growing far behind the pace of its competitors," says Peggy Menconi, research director of CRM at AMR Research in Boston. "This was not the first quarter that it lagged behind, either."

Vantive's fiscal woes came to a head in April when the company announced that it would only break even during the first fiscal quarter. Though revenues had increased 23 percent to $44.8 million, net income was only $252,000, or $0.01 per share, down from $3.7 million, or $0.14 per share during the first quarter of 1998. The news caused Vantive's stock-which had already lost roughly 75 percent of its value during the year-to lose an additional one third of its value in one day. Shortly thereafter, longtime CEO John Luongo resigned and was replaced by Thomas, 50, who comes to the job from 3Com, where he served as senior vice president of electronic business and information services and chief information officer.

According to Menconi, many of Vantive's problems stem from a lack of focus. "It tried to take on Siebel and it didn't work because it spread itself too thin," she says. "Vantive got into e-commerce, call-center technology and several other verticals, and lost its identity. Trying to be all things to all people is not working."

Thomas has yet to announce a strategy for turning Vantive around, but with the company's stock in the doldrums and competitors like Siebel and Oracle circling, expect a leaner, meaner Vantive soon. Says Menconi, "Vantive has some competitive products, but it needs to get into a specific vertical, get its house in order and market these products."

Notable Quotable

"Report: One in Five Americans Currently Holding for the Next Available Representative"

-A recent headline from The Onion, found at www.theonion.com

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