Former DJ Mitchell Kertzman Leads Sybase Out of the Red

Fired from radio station, he began his career as a programmer

By Don Dugdale

Name: Mitchell E. Kertzman

Age: 48

Place of Birth: Boston, MA

Position: President and CEO, Sybase, Inc.

Time in Current Position: 7 months

Years in the Industry: 29

Playtime Activities: Spending time with his wife and children--daughters ages 6 and 4 and a son, age 2.

Car He Drives: 1997 BMW 750il

On UniForum: "I think one of the great things about UniForum is its commitment to keeping the visibility and the importance of open computing. I think that's a real service to the industry and something we wholeheartedly support and endorse."

It was a storybook beginning for the career of a high-tech CEO. He was the teenage folk singer who dropped out of college to become a radio disk jockey, and was then fired for inciting a riot (he denies the accusation). While he was pumping gas, his mother found him a job as a technician at a software company. He started to program, found himself hooked, started his own company and never looked back.

It might sound corny in a paperback novel, but in Mitchell Kertzman's case, it's all true. Now president and CEO of database vendor Sybase, Inc., of Emeryville, CA, Kertzman has been charged with turning around a financially troubled company and has shown evidence of accomplishing that in his first few months on the job. Kertzman also happens to be an unapologetic booster of open systems who will give one of the keynote addresses at UniForum '97 in San Francisco next month.

Kertzman is the kind of guy who, when asked where he grew up, responds, "That question assumes that I've grown up." He is easy to talk to but unpredictable. When pressed, he acknowledges that he grew up in Boston. "When I was a young teenager I was pretty shy, but I found out that when I learned to play the guitar and do folk singing, girls really liked that," he relates. "So I pursued it primarily for that reason and I ended up playing and performing in coffee houses around Boston and Cambridge back in the '60s."

Rocky Start in the Business World
While a sophomore at Brandeis University, he was recruited to become one of the first rock disk jockeys on WBCN in Boston, one of the country's first progressive rock stations. Kertzman had been at the station four months through the summer of 1968 when he became involved in what he describes as "a peaceful protest of a curfew on the Boston Common. Someone was listening to the radio station and called the police and said there was some crazy person on the radio telling people to go down and pop the pigs. There was never any sort of riot or anything like that. But the station owner was convinced that I was trying to sabotage his radio station, so he fired me."

"Now they use my old code as an example to new programmers. They say, 'If you write code like this you'll be fired.'"

After a brief career as a gasoline station attendant, he took a job as an audio-visual technician with an educational software company called Interactive Learning Systems. "I asked the vice president in charge of my department if I could try a little programming. In perhaps the most fateful decision ever made about me, he said 'Sure, try $100 worth of time and show me what you've done. Then I'll see if you can do any more.'" Kertzman did, and continued to program for the company on and off for the next four years. "I loved to program," he says. "Now they use my old code as an example to new programmers. They say, 'If you write code like this you'll be fired.'"

After the company ran into financial difficulty, Kertzman decided to start two businesses. One provided biorhythm charts by mail. The other was a kind of dating service for bands that matched them with bookings. "That one had a fundamental flaw in the business model," he says. "It relied on the business ethics of rock and roll musicians. I learned a good lesson there."

A Company Called Powersoft
In 1974 Kertzman decided to start his own programming business, forming a company called Computer Solutions in West Newton, MA, a block from where he lived. "I had no vision," he says. "My business plan was 'Will Program for Food.' The notion that I could make a very modest living programming seemed like a great idea. I was a programmer with skills and hopefully people would need them--and at the end of the day I could afford to buy groceries and pay the rent."

Kertzman was good enough that by the late 1980s his company had become Powersoft, one of the most successful companies providing software for manufacturing and requirements planning (MRP). Powersoft created PowerBuilder, a client/server development tool; Optima++, a family of rapid application development tools to simplify the use of C++ and Java for building client/server and Web-enabled applications for Windows; and S-Designor, a design and modeling toolset.

"When I hung out my shingle as a custom programmer, it happened that my first couple of customers were small manufacturing companies," Kertzman recalls. "I learned their businesses and automated them and sort of followed my customers." He attributes his success to "sort of a fanatical attention to customers and the ability to develop software that was easier to use and quicker to implement than competitive software. I had a passion for ease of use and the ergonomics of the software user interface."

In 1987 Kertzman decided that the next wave of computing would be networks of PCs running user interfaces--what would later be called client/server computing.

In 1987 Kertzman decided that the next wave of computing would be networks of PCs running user interfaces--what would later be called client/server computing. "I started looking for development tools with which we could rewrite our manufacturing application and couldn't find any. It was then that I hooked up with Dave Litwack (now vice president of Sybase products). He had a vision for development tools that later became PowerBuilder. So we both rewrote our manufacturing application and went into the development tools business. The development tools business was so successful that we sold the manufacturing applications business."

Enter Sybase
By 1993 the now-renamed Powersoft Corp. was ready for its initial public offering, one of the most successful of that year. Then in February 1995, Sybase bought Powersoft for $904 million. It was an acquisition that Kertzman welcomed, but which quickly proved disappointing. "Unknown to us and unknown to Sybase management, Sybase was about to hit the wall," he says. "We had merged for Sybase stock, so that meant that about six weeks after we completed the merger, the value of the company was significantly less."

Sybase's acquisition of Powersoft and other companies was part of founding CEO Mark Hoffman's design to diversify Sybase's product line in an attempt to keep up with rival Oracle. It so happened that the $1 billion in acquisitions coincided with the release of Sybase's core database product, SQL Server 10. But defective code made System 10 hard to use for many of Sybase's key accounts and Sybase quickly began to lose ground to its rivals. While Sybase's sales remained flat in 1995, Oracle grew 42 percent and Informix surged by more than 50 percent. The company lost $19.5 million that year. By July of 1996, Hoffman had stepped down--remaining as chairman--and Kertzman had been given the reins of a company 10 times the size of Powersoft when he sold it. Kertzman moved his family to the San Francisco Bay Area last October.

By refocusing on Sybase's core products in the client/server database market, Kertzman has begun to bring the company back with two successive profitable quarters in late 1996. "I did place a high priority on getting back to profitability as quickly as possible," Kertzman says. "Sybase had gotten fairly diffuse and into a number of businesses that we probably shouldn't have been in. I essentially took us out of interactive TV and multimedia development tools and things like that, and focused on our core competencies and core mission." He also has plans for a revamped marketing effort. "Sybase diversified over the past few years and we never updated our message into the marketplace--our identity, our vision and our mission. We have been doing that and the results will be visible in the next couple of months."

"We think the thin client is a good idea but we think an absolute dogmatic approach to it, saying that PCs are evil and that only network computers are viable probably isn't very customer oriented."

Client/Server Battle Looms
Kertzman's speech to UniForum '97 will address the issue of distributed computing vs. recentralization. He sees a battle looming between those promoting the thin client/fat server model of computing--notably as touted by Oracle and Sun--and those who want to continue the distributed client/server model. "We think the thin client is a good idea but we think an absolute dogmatic approach to it, saying that PCs are evil and that only network computers are viable probably isn't very customer oriented," Kertzman says. "We think customers should be free to choose the application architecture and the implementation that matches their requirements.

"We are wholehearted and enthusiastic supporters of Sun's efforts in the Java world, and we're enthusiastic on thin client. We just don't think that thin clients are the only application architecture. We think that the bulk of the value added in the application architecture is likely to be in the middle layer, in the so-called application servers or transaction servers. What we're really for is freedom of choice for users and for customers.

"The problem is the continuous habit of our industry trying to sell our customers magic bullets. That's the phenomenon we're going through now--the assertion that network computing will solve all the problems of client/server computing just as client/server computing was supposed to solve all the problems of mainframe computing.

"People like Informix and Oracle are pursuing strategies that bring more of the application into the database. The universal server is really a thinly veiled plan to move more of the application logic into the database where it can be more proprietary."

The issue of proprietary computing is a sore point with Kertzman. "Open seems to be a dirty word these days. Nobody talks about it anymore. That's because everyone wants to own the customer. They feel that the only way they can own the customer is by getting more proprietary. Also, the whole industry is aligned against Microsoft, so they're trying to do things that will be to Microsoft's disadvantage.

"We still think there was great value in open computing and in breaking down some of the proprietary barriers. Everything about our architectures and everything about our plans commits us to open computing. I don't believe that customers should be controlled. I believe customers should be supported and serviced, and you do the best job for the customer when you support the customer's ability to choose the best technology."


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