Richard Owen has announced that he will resign as CEO of AvantGo from 30th September 2002, the close of the company’s current financial quarter. AvantGo also expects to transfer trading of its shares to the Nadaq Small Cap market following a sustained period below USD 1.00.
AvantGo provides software for delivering web content and applications to mobile devices. It operates one of the world’s largest consumer mobile internet services, providing free web content to several million handheld computer users. Its products, which include tools for synchronising Lotus Notes and Microsoft Exchange data with mobile computers, are used by a number of Fortune 100 companies.
Owen’s decision to ‘pursue other interests’ has prompted a wider reshuffle, with CFO David Cooper assuming a dual role as Chief Operating Officer, with responsibility for the day-to-day operations of the company. James Richardson also joins as Chairman of the Board and will be tasked with finding a long-term replacement CEO. Owen joined in January 2000 from Dell, where he led the development of the company’s pioneering e-commerce operations.
James Richardson said: “On behalf of the Board, I would like to thank Richard for the significant role he has played in making AvantGo the leading provider of mobile enterprise software. During Richard’s tenure, the company had a successful initial public offering in 2000 and posted revenues of $24 million in 2001. In addition, Richard has built a strong and committed management team that is focused on the company’s drive to profitability.”
AvantGo is potentially one of the great success stories of the wireless technology industry. Based on technology originally developed for grabbing crosswords from the web and formating them for access on a Palm handheld, AvantGo’s products are found on the majority of the world’s handheld computing devices. It’s popular mobile internet client is integrated into every Pocket PC and virtually every Palm OS handheld. Millions of people rely on AvantGo every day for mobile information such as news and stock quotes.
In the enterprise market, AvantGo uses the same technology as the basis for its M-Business Server and a series of business specific (e.g. sales, pharmaceuticals) solutions. M-Business Server essentially provides a bridge between existing web and groupware applications and the mobile environment, enabling companies to leverage their existing IT investments. It has been extremely popular with large corporations, adopted by 28 Fortune 100 companies and 2500 other organisations.
However, it’s stock has been languishing at around USD 0.50 for months, after an IPO which saw it rise as high as USD 28. AvantGo has been hit by the slowdown in corporate spending in its key North American market and by contraction in the advertising revenues which support its free mobile internet service. Revenues are down year-on-year, although there was sequential growth from Q1 to Q2 2002.
AvantGo has said it hopes to break-even on a cash-flow basis in Q4 2002 following deep cost-cutting and staff reduction. Owen’s resignation and the management reshuffle suggests it may miss this target. This can be attributed to wider market conditions rather than operational failures on AvantGo’s part. It has plenty of cash (around USD 37m at Q2 2002) to see it through a protracted downturn and when the environment becomes more favourable, it will be well positioned to resume strong growth. It may also make an attractive acquisition target for a larger enterprise software vendor.
Originally published by PMN Mobile Industry Intelligence, the subscription-based analysis and insight platform founded by Marek Pawlowski.