How Deep Is Platinum's Shine?

Flip doesn't begin to describe Platinum Technology Inc. Chief Executive Andrew J. "Flip" Filipowski, an entrepreneur whose holdings also include a recording studio, a film-production company, and 200 Boston Market restaurants. During one interview at the software company's Oakbrook Terrace (Ill.) headquarters, where he arrives clad in shorts and a loud T-shirt, Filipowski threatens to fire employees who doubt the company's strategy, jokingly propositions Executive Vice-President Paul L. Humenansky, and dismisses a question about Platinum's ability to integrate 17 recent acquisitions as "stupid."

No question, audacity has served Filipowski well so far. By snapping up a bunch of small companies in his market--software that helps corporations wring better performance out of mainframes and other computers--the 44-year-old entrepreneur is on his way to tripling revenues, to $300 million. Wall Street, which has been mainly enthusiastic about Platinum since its 1991 initial public offering, has bid up the company's shares from the teens a year ago to around 25.

But buying companies and running them are two different things. Platinum's payroll has doubled, to 1,200, and Filipowski's team is scrambling to make its operations work as a single unit. A newly hired sales force must learn to sell unfamiliar products. More than 50 programs must be made to look and act as if they were developed by one company. And Filipowski suddenly finds himself in the big leagues, selling against such giants as IBM and Computer Associates International Inc.

SMOOTH SEGUE. True to form, Filipowski shrugs off the challenges and offers one of his own: to surpass $2.5 billion Computer Associates "by the end of the decade." That's a bold boast, to say the least. Three years ago, Platinum was a a niche company whose programs made it easier to use IBM's DB2 mainframe database program. But the outlook for mainframe sales began to darken in 1993, and Filipowski decided to move on to other markets.

Software for so-called client-server networks was the obvious choice. In early 1994, he began a buying spree, snatching up companies whose products manage these networks of desktop clients and the server computers that feed them data and software. Filipowski acknowledges that the spree, which cost $300 million in cash and stock, mirrors the strategy Computer Associates used in becoming the leading independent supplier of mainframe programs.

If Filipowski aims big, he certainly picks the right targets. The market for programs to manage client-server nets is growing at a 25% annual clip and could top $10 billion in five years, says Gartner Group. Companies want software to manage, troubleshoot, and fix a tangle of diverse computer systems and software. Answer Systems, acquired for $38 million, handed the company a client-server "help desk" system that automates tech support. And Platinum's $33 million purchase of Locus Computing gives it expertise in the intricacies of the Unix operating system.

Filipowski's biggest bet is the $150 million deal for Trinzic Corp., which closed on Aug. 24. Trinzic is a top player in the fast-growing market for data warehousing--a technique for collecting information from multiple databases and cross-indexing it. By correlating data from the marketing department's server with data from engineering, for example, companies can gain valuable new insights into their businesses.

MELDING POT. Getting a handle on the new Platinum isn't as easy. Despite a $1.3 million loss in the second quarter--because of a $1.5 million charge for acquisition costs--analysts at Furman Selz and Robertson Stephens & Co. rate Platinum a buy. But Filipowski faces technology and marketing hurdles. A onetime programmer at Motorola Inc., he must now supervise the job of making dozens of different programs work intimately together. "That's not an easy task," says Max P. Watson Jr., CEO of rival BMC Software Inc.

In marketing, Platinum is no longer simply trying to persuade midlevel managers to buy software worth $100,000 to help run their mainframes. Now, the company must get technology and finance chiefs to spend $500,000 on software that will help them organize entire computer systems. Platinum's current customers are watching this with concern. "It's a big risk, obviously," says one. The question is whether the audacity that got Platinum where it is can take it where it's going.

    Before it's here, it's on the Bloomberg Terminal.