Software companies don't often get second changes in the brutally unforgiving world of information technology, but it looks like Premier Solutions Ltd. is defying the odds.
Wayne, Pa.-based Premier, founded in 1980 as a developer of trust systems aimed at the world's biggest banks, has outgrown a troubled adolescence.
Problems included tens of millions of dollars in losses, high management turnover, and a spate of lawsuits from disgruntled customers.
Worst of all was its connection to a highly publicized trust systems meltdown in 1988 at Bank of America, when the California institution failed to get Premier's trust accounting software running properly, causing it to write off a whopping $80 million.
Thrown into Tailspin
"When the B of A project failed -- there's no way around it -- the company absolutely went into a tailspin," acknowledged Jay Mossman III, Premier's chief executive.
Mr. Mossman, formerly, a trust executive at Banc One Corp., was brought in by the company's majority stockholder, venture capital firm Safeguard Scientifics Inc., to staunch the red in in 1991.
"When I joined the company, I got a lot of calls from friends who said I was wacko," Mr. Mossman joked.
But after he took the reins, Mr. Mossman was instrumental in helping turn around Premier's fortunes by quickly settling the customer lawsuits and making the crucial decision to rewrite Premier's software to run on Digital Equipment Corp. VAX computers.
The software was originally designed for minicomputers from Prime Computer Inc., a hardware company that has since gone out of business.
"We converted from Prime to Digital in one year," Mr. Mossman boasted, a decisive move that basically saved Premier from extinction. Its customers have said that since converting to the Digital hardware, the software runs much faster.
Return to Profitability
As a result, Premier was able to regain the confidence of many trust bankers, and in 1992 the company returned to profitability for the first time in almost a decade, Mr. Mossman said.
According to Mark Hardie, an analyst with Wellesley, Mass.-based technology consulting firm the Tower Group, Premier will reach $23 million in revenues in 1994, up from only $4 million in 1990.
In addition to the move to Digital computers," What saved them was that they decided to narrow their product focus to international trust accounting and global custody," Mr. Hardie said.
He noted that Premier's competitive position has improved because of its software's ability to track investments from many countries in their local currencies, a capability called multicurrency accounting.
"More and more trust clients are demanding their banks provide them with global investmant opportunities, and multicurrency accounting has become a requirement," Mr. Hardie said.
Premier has benefited from this trend because other vendors have had difficulty in adding multicurrency accounting capabilities to their trust software.
Earlier this year, one Premier competitor, Minneapolis-based National Computer Systems, had to scrap its multicurrency trust package, called Ultrust, which it had been developing with a number of banks.
One of those institutions, Bankers Trust New York Corp. has now decided to install Premier's software, called Global-Plus, for its personal trust operations, company officials said. The bank is continuing to develop on its own a multicurrency system for its institutional trust custody operations, they added.
Other banking clients that are using Premier's software include Chemical Banking Corp., Credit Suisse, Fiduciary Trust Co., and Swiss Bank. Half of Premier's customers use GlobalPlus in service bureau arrangements with the company, Mr. Mossman said.
Deal Signed with Digital
To help bolster that part of their business, last month Premier signed a contract with Digital Equipment to transfer the operation of the VAX hardware Premier uses for its systems development and outsourcing activities. Premier still controls the software support activities for its banking clients.
"Digital has much better disaster-recovery capabilities than our old facility had," Mr. Mossman said, adding that Digital's sophisticated global data communications network gives Premier's customers the ability to easily expand into new international markets.
Now that Premier has righted itself financially, the company is busy developing enhancements to its software, including adding more so-called client-server capabilities, where personal computers take on more of the processing from mainframes.
Mr. Mossman said the original design of Global-Plus has made to move to a client-server architecture easier.
This is because when the software ran on Prime hardware, it needed distinct modules for data base management, investment accounting, and user interfaces to run more efficiently over a cluster of minicomputers.
"When I got here, I knew we had to move to client-server," Mr. Mossman said. "But we've been able to evolve what we have, instead of reinventing the wheel."
Mr. Mossman said his biggest challenge these days is managing Premier's growth so it doesn't alienate existing customers in the search for new business, as well as to keep up the earnings momentum.
"We've set some pretty lofty goals, because the intent is to take the company public one day," he said.