When Manus Bray set about establishing a software company in Ireland he brought his expertise in marketing, law and accountancy to the table. He and business partner, Bill Chisholm, established Millennium Solutions, two years ago. Last year, the company which specialises in purging the millennium bug from IBM AS400 systems, had pre-tax profits of £1 million and is on target for a £7 million turnover this year.
The company now employs 40 people in five offices worldwide and has been tipped for a stock market flotation amid predicted revenues of £14 million in 1999.
Tired of travelling abroad from one job to another, Mr Bray attributes the decision to return home to "a mix of homesickness and not enjoying such an unstructured lifestyle".
Years of experience in the IT industry working as a consultant for Systems Software Associates (SSA) gave him a good insight into the market's requirements. He immediately identified the millennium bug as a business opportunity, having witnessed countless companies spend millions of pounds on their IT systems. There are about 400,000 AS/400 systems installed worldwide, primarily in large manufacturing distribution outlets. Mr Bray knew these companies couldn't possibly afford to replace the costly systems, and set about developing an automated solution which could run through an entire enterprise package, making it millennium-compatible. With Mr Chisholm's technical expertise the company came up with the first solution of its kind for the AS/400 system at the start of 1996. However, in order to make the fix commercially viable, it needed to try it out on a test applications system, where users could test the beta (test) product. In August 1996, it approached Waterford Crystal which had a serious problem with the Y2K bug, as it was in the process of major diversification and had to prove its systems could handle the expansion.
Millennium Solutions struck a deal with Waterford Crystal to develop a generic system free of charge, saving the company about £60,000. In return, the company's first product, MS4 was ready for commercial release by December 1996. Mr Bray and Mr Chisholm were able to draw on their global contacts from their days with SSA to get the product to market. The first licence went to pharmaceutical giant Novartis and through non-exclusive reseller agreements they appointed resellers to install the product worldwide.
The MS4 product can be used on AS400 systems running major applications such as BPCS, JBA, JD Edward, PRMS, MAPICS and PRISM. Millennium Solutions has been greatly aided by IBM and SSA's endorsement of the product. Now the product has been installed in 55 countries on five continents, and it remains the most timely Y2K solution, as it can be installed in just five days. This will have increasing appeal as the countdown continues to 2000. Its clients include Siemens, Proctor & Gamble and locally, Murphy's. The MS4 solution works on the simple premise that the same day of the week occurs on the same date every 28 years. The software automatically runs through the enterprise analysing the location of all date formats on databases, numeric fields and edit codes. It then subtracts 28 from the year field of all entries, so instead of comparing 25/10/98 with 25/10/ 01, it will compare 25/10/70 with 25/10/73 producing the same results. To the user the entire process appears as normal on screen.
Now Millennium Solutions has developed a euro product - which would automatically carry out the necessary currency conversion calculations - for the same AS/400 market. In September, it won a £1.6 million contract with CIBA, the giant chemical company, to make its European sites euro-compliant after it had made the company Y2K-compliant in a global contract worth £1.4 million.
The euro contract is the first enterprise implementation of Millennium Solutions's new product EM4, which is being developed for market with the help of CIBA's analytical skills and is still awaiting patent approval.
According to Mr Bray, the EM4 product conducts all the necessary currency conversion and triangulation procedures required under EU law.
Millennium Solutions has matured considerably since it first developed MS4. Back then Mr Bray believes they released the product too early, leading to high helpline costs. EM4 has had a more controlled development, and will only be released when it is completely operational and stable within CIBA. The company has also taken on board some heavy hitters over a very short period. These include Mr Ed McBride, who was global supply chain manager for United Distillers; Mr Nevin Dowling, former CEO of Bord Gais Eireann, now chairman of Millennium Solutions; and Mr Maurice O'Connor, former commercial director with London-based Unidata & Communications. Now Millennium Solutions is looking to its next phase of growth, as it cannot survive as a two-product company with no shelf-life beyond 2002. "We understand we have to move away from solutions dictated by legal issues. But these products have created a massive image for us globally and it is a lot easier for us to open doors than a stranger trying to enter the AS/400 market."
The next step will involve a large-scale acquisition of an AS/ 400 software development company, says Mr Bray. Working from a shortlist of four, he sees the move as crucial to securing the company's future beyond 2000. Consultancy was also identified as a key growth area after Millennium Solutions saw how much money it was losing by contracting out the enterprise implementation of its products to resellers. The priority now is to sell other companies' products into Millennium Solutions' existing client base.
The company is in the process of reorganising to introduce a holding company, Millennium Group, which will include a consultancy arm, Millennium Consultancy. It is in talks with an Irish services company which, if successful, will leave it with a complement of about 20 specialists in AS/400 consultancy.
Following this restructuring process, Mr Bray predicts a stock market flotation within about 18 months. His personal market preference would be the Nasdaq in terms of potential returns but he remains uncertain whether the company is good enough at this stage. The next year will see the establishment of a greater US presence, with a lot of marketing revenues being pumped into North America.
The next 18 months for Millennium Solutions will be all about combining marketing, accounting, legal and technical expertise to map out a blueprint for its future. "We're in this for the long run. There was an early days' perception we were a `one-night stand' company, but we have already proven that we want to build a global corporation," he says.
