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TWST: What is BluePhoenix Solutions?
Mr. Kilman: BluePhoenix is a leader in a very interesting space called
legacy modernization, and it's a software space. We are a software
company; we are selling solutions to our customers. We are selling
solutions that take their legacy application and modernize it, slowly
but surely, in a way that will decrease risk. We have a high return on
investment and we enable them to grow into a modernized IT in a way that
will support the growth of their business. The stage is very simple. If
you take a typical enterprise from the Fortune 10,000 or 15,000 in the
world, you find that in the last 20 to 30 years, this enterprise has
invested anywhere from hundreds of millions of dollars to tens of
billions of dollars into IT. They started their investment in the 1970s
and 1980s and went through the 1990s and the 2000. Technology changed,
the Internet came out, but there are still a lot of legacy applications
that are very difficult for them to maintain and develop because of the
following problems. First of all, they suffer from lack of skills,
because the specific programming skills that were popular in the 1980s
are diminishing and you won't find these skills among those who are
graduating from college and who would do the job for them. Secondly,
these applications are not flexible; they are not using state-of-the-art
tools that enable people to analyze information and so on and so forth.
So BluePhoenix has a different set of software tools, and we are not
talking hardware here ' we are talking software. We have a set of
software tools that enable us to come in during the first phase without
changing any functionality of an application, just migrating it to a
much more modern technology for the customer. BluePhoenix actually is a
merger of two companies. One of them was Crystal Systems, which was very
popular during the Y2K obsession, and it developed some of the tools
that I was mentioning that originally helped people to migrate to
overcome the problem of 2000. The other part is a company called
BluePhoenix that merged with Crystal and supplied some of the other
tools and the infrastructure concerning the Crystal tools and solutions.
So the merger happened after Crystal had gone public in 1997 on the
basis of its Y2K solution. When Y2K situation ended in 2000, the
business of Crystal went down. However, the tools and the technology
were so good that we have been able to reconfigure and redeploy them in
the last three years and we are now doing general legacy systems
modernization for our customers.
Tickers included in this excerpt: BPHX
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