Retooling Comes Naturally to This Software Exec

Pervasive Software CEO Ron Harris has more than once taken a broken product and made it hum it again. Now, he's trying again

By Andrew Park

As a teenager in Nashville, Ron Harris loved motorcycles. So much, he once rebuilt a Harley-Davidson in his bedroom. He even made fast friends with the local chapter of the Hell's Angels motorcycle gang, who recognized his talent for repair. "I could go into their clubhouse like I go into the supermarket," Harris says.

On a typical Saturday, his parents would look out on the driveway to find five Harley choppers waiting to be fixed, he recalls. Although he went on many a late-night ride, Harris never joined the gang. But in appreciation for getting their bikes back on the road, a Hell's Angel known as "Fat Charles" gave Harris a denim jacket that he still wears today.

These days, Harris looks to have the motors humming at Pervasive Software (PVSW ). In the mid-1990s, the Austin (Tex.) company grew rapidly by selling its database to software developers who needed to embed the program into their own applications for handling such tasks as corporate accounting, tracking customer shipments, or scheduling fleets of vehicles. By flying under the radar of database giants Oracle, IBM, and Microsoft, whose products were costly and too complicated to easily package with other software, Pervasive picked up more than 10,000 customers, from small, independent software providers to established tech companies like Novell and Great Plains Software.


 Still, the company ran off the road in 1998 when Harris, its longtime president and CEO, decided to pour tens of millions of dollars into designing software tools for the Web-development market and couldn't produce the sales that were expected. After a year-and-a-half of trying, the project was written off in July, 2000, with a $23.4 million loss. Harris offered to resign.

Good thing the board said no. A year later, Pervasive is back in the black, and its sales are poised to grow again. At a time when many software company executives are adrift in the downturn, Harris has pulled off an enviable turnaround. In the quarter that ended Mar. 31, the company earned a small profit after five losing quarters. And having landed Bank of New York, Mutual of Omaha, and WebMD as new customers, revenues are returning to their old levels.

Pervasive will lose money for this fiscal year, which ends June 30, but analyst Mark Murphy of First Albany Corp. expects the company to earn $2 million on $43.3 million in sales in its fiscal 2002, up from $42 million in fiscal 2001. "They've restored the confidence of their core constituency," says Carl Olofson, an analyst with International Data Corp.


  Repair work still needs to be done. Pervasive's stock languishes below $2 a share. Just as before, the company needs to expand its product line. Only this time, Harris is making sure he doesn't jump headlong into new businesses. First, he's filling out the company's services group, which will boost revenues beyond software upgrades. Next, he's looking for ways to make Pervasive's databases an integral part of other Web software that small and midsize businesses are asking for.

Increasingly, when Pervasive's customers are away from the office, they want to use mobile devices to get at their data-intensive applications over the Web. Pervasive must offer those capabilities but without losing its knack for simplicity and low cost, analysts warn. "You want to make sure you're going in the direction that your customer base is going in," Olofson says.

Harris has been heading in new directions his whole life. If you ask his friends, it was Harris' idea that they all sail a 56-foot yacht for a Caribbean vacation, even though none were experienced sailors. An hour after launching, a summer squall came bearing down on them with rain and high winds. So Harris took over and steered the ship to safety. Randy Kies, who met Harris on a beer-soaked tubing trip down a Central Texas river 20 years ago, says riding out bad storms comes naturally to his friend. "He feels like somebody has to make hard decisions, and he feels like he's the person to do it," says Kies, an Austin dentist.


  While his family fretted over his love for fast machines, Harris excelled in school, graduated from Vanderbilt University with a degree in computer science and an MBA at the University of Texas at Austin. Harris cut his teeth programming at Texas Instruments. Later, he helped found server-software developer Citrix Systems (CTXS ), where he says he learned what it took to change direction when things go wrong.

Citrix, where Harris was a vice-president, got into deep trouble when Microsoft stopped work on the OS/2 operating system, which Citrix was using as the basis for the software it had developed. So Citrix ditched its OS/2 products to build Windows-based software, and sales took off.

Harris will surely need to make more tough calls down the road. Just as Pervasive has returned to profitability, tech spending has ground to a halt, and investors have grown less patient. But analysts say Pervasive shouldn't be afraid to venture into new markets and get beyond the database. If Harris can do that, Pervasive could be in for a heck of a ride.

Park covers technology from Dallas

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