IONA Technologies' chief executive, Dr Chris Horn, moved to reassure investors yesterday, revealing in greater detail the issues that caused first-quarter losses.
The problems were entirely within the company and not indicative of any long-term malaise, the head of the Dublin-based software firm said.
"The issues here are internal. It's not as if it is competition, it is not as if it is market demand, it is nothing like that. The mistakes we made were internal execution issues which are in our control to fix," he said in an interview with The Irish Times.
"During the current quarter we will be watching things like a hawk and hopefully get back on track again," he added.
Iona issued a statement on April 1st, warning investors that profits for its first quarter would be lower than expected. On Wednesday, the company said it had made a loss of $400,000 (€371,000), but added that turnover had risen by 20 per cent compared to the 1998 quarter, to $21.2 million (€19.7 million).
The firm's share price fell rapidly on news of the profit warning, losing more than half its value in a day's trading. It has since showed signs of recovery, moving from below $15 to as high as $20, but fell back in trading last night to close at $18.933/4.
Dr Horn said that when Iona floated last year all of its sales deals were "volume" contracts, typically under $500,000 in value. Now, 50 per cent were "enterprise" business, contracts worth more than $500,000 that often required sales representatives to pitch deals with senior management in person to get them through.
"Part of the problem was perhaps, frankly, immaturity in terms of the sales reps who used to be in the volume business and have now graduated to the enterprise business and are now grappling with that change and finding the transition more difficult than we expected," Dr Horn said.
Another problem was that the recently-hired staff had experience elsewhere in software sales, but were not completely au fait with Iona's products.
"Frankly, we failed in some cases to have the right induction and training in place rapidly enough to bring our new hires fully up to speed and make them as productive as possible," Dr Horn added.
