Informatics General

Walter F. Bauer (1924–2015), the main founder of Informatics, was from Michigan and earned a Ph.D. in mathematics from the University of Michigan in 1951. Another key founder was Werner L. Frank (1929–), who during 1954–55 had done programming work on the ILLIAC I at the University of Illinois at Urbana–Champaign. He was then recruited by Bauer and joined Ramo-Wooldridge in 1955, where he did numerical analysis and programming in assembly language and FORTRAN. Working with pioneers of scientific computing such as David M. Young, Jr. and George Forsythe, Frank published several important articles on numerical analysis in Journal of the ACM and other publications. By 1958, Ramo-Wooldridge had been acquired by Thompson Products, Inc. and come to be known as TRW Inc.; Frank then did early programming on several defense industry computers, including the AN/UYK-1, and spent long stretches of time in Washington, D.C. The third founder was another TRW colleague, Richard H. Hill, who had been a professor at UCLA and an assistant director of a joint data center between that university and IBM. In January 1962, Bauer approached Frank and Hill to start a new independent company that would provide software services. At the time, it was an unusual move since few people saw software as a viable business. Indeed, throughout his time with the company, Bauer embodied the personality characteristics of entrepreneurship. Venture capital was hard to locate for such start-ups in that era and Bauer met with several rejections. The co-founder of Data Products, Erwin Tomash (1921–2012), was from Minnesota and had earlier worked at Engineering Research Associates, a pioneering computer firm from the 1950s. He had known Bauer and thought that the two new efforts being formed together would provide a hedge against either one of them encountering start-up difficulties. Informatics was thus created as a wholly owned subsidiary of Data Products. The new software firm was capitalized at all of $40,000, of which Data Products contributed $20,000, Bauer $10,000, and Frank and Hill $5,000 each. ==The name==

The company's name came from the founders' desire to base it on "-atics", a Greek suffix meaning "the science of". Their first thought was "Datamatics", but a form of that was already taken by an early computer from Honeywell/Raytheon; Bauer and the others settled on "Informatics", meaning "the science of information handling". At the very same time, March 1962, French computer pioneer Philippe Dreyfus came up with the name "Société pour l'informatique appliquée" for a new firm of which he was co-founder, thus creating a French version of the same name. However, in France, the term "informatique" soon became a generic name, meaning the modern science of information handling, and would become accepted by the Académie française as an official French word. The term then came into common use in a number of other European countries, adapted slightly for each language. In the United States, however, Informatics fought any such use as an infringement upon their legal rights to the name; this was partly in fear of the term becoming a brandnomer. Bauer later recalled that at one point the Association for Computing Machinery, the leading academic organization in computer software, wanted to change its name to the Society for Informatics, but the company refused to allow that use. Eventually the generic usage of the term around the world caused the company to reconsider and, according to Frank, was the reason for the 1982 name change to Informatics General. ==Early history==

Informatics, Inc. began operations on March 19, 1962, in Frank's empty house in Woodland Hills Data Products, which served as the Informatics back office, was located in nearby Culver City at that time. By its second year, Informatics was profitable and had 37 employees; by the third year it was growing well. It was listed on the over-the-counter market, based in New York. However, 60 percent of its stock was still held by Dataproducts. Informatics was no exception; its price–earnings ratio rose from 25 at the time of its IPO to 200 by mid-1968 and over 600 by early 1969, despite the company having only $40,000 in earnings for the previous year. By 1969, Informatics had revenues of over $11 million with earnings of $561,000. ==Origins of Mark IV and the software product business==

The history of what became Mark IV goes back to 1960, when GIRLS (the Generalized Information Retrieval and Listing System) was developed at Douglas Aircraft Company for the IBM 7090. Its creator was John A. Postley (1923–2004), an engineer who had worked for many years in the aerospace industry. Postley was working in the Advanced Information Systems subsidiary of Electrada Corporation along with Robert M. Hayes and others. In April 1963, Advanced Information Systems was purchased from Electrada by Hughes Dynamics, an early 1960s subsidiary of the Hughes Tool Company that provided computerized management and information services. Subsequent versions of GIRLS were called Mark I and Mark II; made for the IBM 1401, they were increasingly stronger in their capabilities. Under Hughes, Mark III was in development, with key performance improvements. Hughes Dynamics then decided it wanted to exit the activity of making software. While accounts later told by some Informatics executives imply that Howard Hughes himself was aware of, or played a role, in what was going on, In any case, in May 1964, Informatics acquired Advanced Information Systems from Hughes Dynamics. For this it paid essentially nothing: Hughes actually paid Informatics $38,000 to take it, but in doing so Informatics assume some existing customer obligations of about the same amount. Indeed, it is possible Bauer and Wagner, who were both active in SHARE (Wagner had been a chair of it), were influenced as to the value of such a product by their exposure to previous efforts in that users group. and it was Postley who had the full vision of what a software product might be. Informatics as a whole was reluctant to finance the development cost, which Postley estimated to be half a million dollars. Existence of the new product was first announced in 1967. But IBM then decided to unbundle software from its mainframes in 1969, which helped facilitate the growth of the commercial software industry in the 1970s and beyond. This accelerated sales of Mark IV severalfold from what Informatics had anticipated. ==Computing Technology Company subsidiary==

In 1968, Informatics announced it was acquiring a New Jersey firm, Computing Technology Inc., a transaction that closed during 1969. This became the Informatics Inc. Computing Technology Company, a wholly owned operating unit of Informatics that was located in River Edge, New Jersey. Within this subsidiary was the Communication Systems Division, and it developed a communications system for the Federal Reserve Bank of New York. This was one of several large contracts the River Edge division had with Wall Street firms for joint development of bank transfer systems and related services, with those other firms including Dun & Bradstreet and Dean Witter. The Federal Reserve Bank effort had begun in 1968 and involved using advanced techniques for store-and-forward-based message switching and similar needs. The implementation was based around the SDS Sigma 5 computer from Scientific Data Systems, a computer line which had been acquired by Xerox Corporation. The communications system was a success and Informatics and Xerox made a joint agreement to market it to other customers, with the Informatics product being named the ICS IV/500. Informatics had hopes for the ICS IV becoming a strategic product for them, and while it was sold to General Foods and Japanese National Railways, it proved a very high-priced, low-volume market and there was an effort to find a less expensive alternative. Informatics was contracted by Bankers Trust to develop a version of the system that ran on the DEC PDP-11 minicomputer with a Sigma 5 emulation unit. However, the project was not successful, and by the mid-1970s Informatics departed this communications space. Subsequently, the Computing Technology Company subsidiary produced the Accounting IV package. This was a group of integrated financial applications for companies. ==Equitable Life Assurance Society relationship==

Beginning in 1970 the computer industry hit a downturn that lasted several years. Software houses of the time tended to suffer from unprofitable contracts, failed ventures, and slowing demand. Informatics' creation of a Data Services Division, and with it the acquisition of a number of computer service bureaus as a means of providing utility computing, did not go well. But in a time when many software firms did not survive, In 1971, Informatics and The Equitable Life Assurance Society of the United States announced a joint venture, Equimatics, Inc., headed by Werner Frank, that would develop and sell computer-related products for the insurance industry. In particular, Equimatics, sought to establish a data services business that would provide such services to Equitable and others in the insurance industry. The deal closed in March 1974. Thus Informatics became a subsidiary of Equitable Life, with the goal of gaining the ability to grow organically and to acquire other businesses. It had some 1,800 employees at locations around the world. Seeking to capitalize on the brand of its most known entity, some other Informatics products were named with a "IV" in their title, including "Production IV" for planning in manufacturing and "Accounting IV" for the financial sector. It was only the second software company ever to be listed on the NYSE. ==Products and divisions==

During the late 1970s and early 1980s, the company broke its revenues down into three sources: software products, professional services, and information processing services; from 1978 through 1982, the three were in rough balance, with each of the three comprising anywhere from 26 to 39 percent of the total. Beginning in 1982, the company categorized revenues as coming from cross-industry customers versus vertical market segments; These changes reflected complicated, and frequently changing, reporting structures within the company. Mark IV and Mark V Mark IV was a batch processing, early fourth-generation programming language that combined file management and upkeep with report generation capabilities. Mark IV was originally designed to be usable by non-programmers, with simple interfaces given for report requests and data updates. This interface consisted of filling out one of several paper forms by hand and then having it keypunched into a machine-readable form, that was then run by a batch operation. However experience showed that non-programmers had difficulty understanding the increasingly complex capabilities of the product and that only those with some data processing background were able to use those capabilities effectively. Mark IV and Applied Data Research's Autoflow are generally considered to be the two most influential early software products. Instead, Informatics built up a large sales force that was explicitly modeled after IBM's, with long sales cycles also a characteristic of their market space. An independent users' group of Mark IV customers, named the IV League (a play on the Ivy League of universities), was created and had its first full meeting in 1969. By 1972 the group's meetings up to 750 attendees. A lot of Mark IV special features were developed as separately priced add-ons, each of which became financially successful. Mark IV later sold for up to over $100,000 depending upon mainframe size and those features desired, and that higher price became a typical cost for customers. So unfamiliar was the software product business that for the first four years or so, Informatics did not charge at all for Mark IV product support. However, beginning in 1973, the company began to impose an 'Annual Improvement and Maintenance Service' fee. In terms of non-IBM platforms, Informatics made a few efforts to develop a version of Mark IV for them, but they were generally not fruitful. By 1977, Informatics had created a Software Products Group to conduct the Mark IV business. At its peak, it was responsible for $30 million in revenues per year. It is not only that, as computer historian Thomas Haigh has written, "Mark IV [was] the most successful product of the early independent software industry" For a long time Mark IV had few effective rivals in its market niche; as Bauer later remembered, "We didn't have much competition with Mark IV for many, many years. It was just pure sailing for 10 or 15 years." As that happened, much of the Mark IV-related revenues came to consist of the annual maintenance fees as well as charges for company-offered product training courses. In contrast to the batch-only features of Mark IV, the goal of Mark V was the generation of online applications, although initially this was still done through some batch-oriented development steps. The same taxonomy of application generators mentioned earlier placed Mark V in the category of "Application Development Systems", as it covered more advanced capabilities such as generating online systems with screen dialogue and similar features. Mark V never become a dominant force in the marketplace like Mark IV was. It had many competitors, including products from Applied Data Research, IBM, Cincom Systems, DMW Europe, and Pansophic Systems. Following the acquisition by Sterling Software, Mark IV continued to be a significant product, but in 1994 it was renamed VISION:Builder. By one account, in the late 1990s the product still had close to $20 million in annual revenue. Government services and online search During the 1960s and 1970s Informatics played a key role in the development of online information services. One of these was RADCOL at Rome Air Development Center (site of some of Informatics's earliest contracts); this was short for RADC Automatic Document Classification On-Line, which ran from the late 1960s into the mid-1970s. Informatics had several contracts with NASA. The earliest, in 1966 (and possibly earlier) was in support of NASA efforts at the Jet Propulsion Laboratory and a database application for maintaining information about primates in use at various NASA laboratories. The program for redesign of the Goldstone antenna used what came to be called a hill climbing algorithm and was given special recognition by NASA in the form of a small monetary prize for its developers. Work done at Ames included the creation of software in support of the Ames wind tunnel complex, which included real-time data collection systems for it. The Ames operation lasted through the lifetime of the company and was considered well-run and consistently turned a profit. Later, Informatics had another long-running contract with NASA from 1968 to 1980. This began with winning an over-$4 million business to operate the Scientific and Technical Information Facility at College Park, Maryland. There Informatics maintained NASA online bibliographic systems, including the pioneering RECON facility. Using some of the technology in place at NASA, including the DIALOG system which had been placed in the public domain, Informatics developed online search services in other areas as well during the 1970s, including TOXLINE and CHEMLINE for the United States National Library of Medicine. At one point Informatics made an offer to DIALOG founder Roger K. Summit to join and had he done so, it is possible that Informatics would have entered the commercial online services world with some form of what became DIALOG. Instead, Informatics focused on government and private information services that were developed and maintained on a contractual basis. Data Services Division Although Informatics was always best known as a software company, it always had a presence in the services arena, with service processing and facilities management often accounting for around a quarter of Informatics' revenue. This activity was the responsibility of the Data Services Division, which was funded out of Informatics' stock offerings during the late 1960s. Users could work in either OS/VS batch mode or VM/CMS interactive mode with a variety of programming language and program development tools available as well as access to an IMS database. Typical customers of the Data Services Division during the 1970s included the General Services Administration for hosting a teleprocessing services program, the National Highway Traffic Safety Administration for hosting a reporting system, and Simplan Systems, Inc. for macroeconomic modeling. Informatics still offered time-sharing services into the early 1980s. Answer Division During 1979 and 1980 Informatics tried to broaden its range of IBM mainframe-related products beyond just Mark IV. Database management systems were becoming increasingly popular, but Informatics decided not to create its own such system, instead making products that worked in conjunction with IBM's database and data communications products, such as IMS and CICS, respectively. It was followed by Answer/DB, a product introduced in 1981, that allowed end users at terminals to make queries against various files and IMS databases on the same IBM mainframe operating systems. Informatics then put out a series of a products that linked specific popular PC-based applications to Answer/DB on the mainframe. Such linkages were a frequent aim of products being developed during this time. For Informatics, these products were called and released as Visi/Answer in 1983, dBASE/Answer in 1984, and Lotus/Answer also in 1984, so named because they represented links for VisiCalc, dBASE, and Lotus 1-2-3. The products generally communicated to the mainframe over IRMA boards or the FORTE package. Sales of Visi/Answer were much slower than Informatics had anticipated. By 1985 the Answer product line was continuing to experience high costs and disappointing sales. Management Services Division and Ordernet William D. Plumb was a pioneer of electronic data interchange who began thinking about it while at a Columbus, Ohio-based firm known as Management Horizons. The data processing part of this firm was spun off as a subsidiary, Management Horizons Data Systems (MHDS), which provided transaction-based computer services to wholesale distributors. MHDS was subsequently acquired by Citibank. In particular, it was set up as a service bureau that would provide a solution to distributors looking to handle business-to-business transactions. In 1975 Informatics had arranged with the National Wholesale Druggists' Association to create a central clearinghouse for the processing of electronic purchase orders within the industry. In 1978 that association formally endorsed the use of Ordernet, which led Informatics to create an Ordernet Services Division. As a business unit within Informatics, this division was essentially a one-person effort at the beginning. By 1982 four trade associations had endorsed the use of Ordernet, the most recent being the National Association of Service Merchandising. Ordernet was one of the main prizes that Sterling Software sought by acquiring Informatics in 1985. Warner Blow became the CEO of Sterling Commerce. which was founded by Michael J. Parrella. Intended to significantly reduce the development time for online, CRT terminal-based applications, TAPS had been around since 1974 and initially ran on IBM mainframes under the CICS teleprocessing monitor and the TCAM access method. TAPS was not only a development tool for making online applications but also a production environment to run them within, and as such provided essential capabilities including network security and control, screen mapping and data editing, menu processing, database maintenance and inquiry, concurrency protection, and network and database recovery. During the late 1970s TAPS was ported to a number of minicomputer platforms, including the Digital Equipment Corporation PDP-11, the Hewlett-Packard HP 3000, Perkin Elmer's Interdata minicomputers, and the IBM Series/1, along with systems from Harris Computer and Tandem Computers. At this time some 70 percent of TAPS sales were to other companies doing software development, such as McCormack & Dodge and On-Line Systems, Inc., in what the firm said was a deliberate strategy to first market the product to customers who would be "the toughest test of all". Bauer stated that Informatics wanted an entré into the minicomputer market and Frank had been looking for a while for a transaction- and terminal-based application building system. and Informatics continued to stress the portability of TAPS across different hardware, operating systems, and terminal models. Prime Computer became an important minicomputer platform for the product; Projects were undertaken to expand the number of IBM platforms that could host TAPS, to include not just System 370 OS-based ones such as OS/VS1 but also the DOS-based SSX/VSE for the IBM 4300, and even the relatively obscure IBM 8100 distributed processing engine. The overall goal was a product that could span across mainframes, minicomputers, and microcomputers. Applications could be built and tested in one environment, such as an IBM mainframe in a data center, and then run in another environment, such a minicomputer located in a regional location or a microcomputer located in the field. with the Navy's use going back to the 1970s. By the early-mid-1980s, TAPS had secured a new $1 million contract for the Army's modernization of its non-tactical administrative, logistical, and financial information management systems, and TAPS was heavily used inside the Navy's stock management and distribution system. During the early-mid-1980s TAPS underwent an implementation change from TAPS I, which was written in less-portable languages, to TAPS II, which was written in an explicitly designed portable dialect of the Pascal programming language. a consulting company in New York City that had previously done work on the product and was known for being one of the few consulting firms that was owned by women. SOFT did development work to keep TAPS going on the Tandem and especially IBM platforms, and TAPS remained in use by the Army and Navy for accounting, personnel, and distribution and supply applications into the 2000s, It was not until 2015 that TAPS was finally retired from service by the U.S. military. Equimatics Division / Life Insurance Systems Division United Systems International was a Dallas, Texas-based company that was building an ambitious solution for automating the back-office functions for companies that offer life insurance. From this the Life-Comm solution emerged; and growing to have several dozen customers among insurance companies. It eventually became the leading product in the field. The Equimatics Division persisted as a name within Informatics even after the company was acquired by, and subsequently became independent from, Equitable Life Assurance itself. It released related insurance products, such as GROUP-COMM, for the administration of group insurance plans. However over time it became instead known as the Life Insurance Systems Division. In late 1984, the division was sold to The Continuum Company. Legal software divisions Informatics had two divisions that related to computer support for law firms. One was the Legal Information Services Division, which was begun around 1974, was based in Rockville, Maryland, and provided a service bureau for litigation support services. In particular it offered a legal support service that assisted law firms with large-scale document maintenance and retrieval functions in complex litigation efforts. It was one of the first software companies to realize that law firms needed dedicated computer support for client billing operations, and from that need its Legal Time Management System product was created. In May 1981, Informatics acquired Professional Software Systems. In so doing the Professional Software Systems Division was created. Continuing to sell the Wang-based Legal Time Management System turnkey solution, the Phoenix division had yearly revenues on the order of $30 million by the mid-1980s. It would claim in advertisements in the ABA Journal to have 30 of the largest 100 law firms as customers and to be the top supplier of integrated legal word and data processing systems. Following the Sterling Software acquisition, the Rockville operation was sold in 1987 to ATLIS. As an entity, ATLIS Legal Information Services persisted at least into the early 1990s. The Phoenix operation was sold several times, beginning in 1986, and also was still active into the early 1990s as owned by Wang Laboratories. In 1965 Informatics acquired it and formed the CPM Systems Division, led by Russell D. Archibald and located in Sherman Oaks, Los Angeles. Much of its focus was on the efficient planning and construction of tract housing, but the business dissipated during a housing downturn in the late 1960s. Nor was it competitive with software from McCormack & Dodge, the other leader in that field, and it was sold to that firm a year after the Sterling Software takeover. ==Final years and the Sterling Software takeover battle==

Informatics continued to grow, both organically and via acquisition. Indeed, by the early-mid-1980s Informatics General had made more than thirty different acquisitions along the way. Depending upon when and how the counting was done, the company had some seventeen divisions within it, and sometimes subdivisions within those; some of these were small-sized businesses that revealed a lack of focus within the overall company. The divisions were organized into groups, and these groups were sometimes independent entities unto themselves. Werner Frank had a parting of the ways with Informatics management and left the company at the end of 1982, with some acrimonious relations taking place between him and Bauer. There were attempts to change the structure of Informatics' management, such that Bauer would be less involved in operations. Accordingly, in February 1983, Bruce T. Coleman was named president of the company. He had originally been hired in 1978 as a group vice president. However, during a large-scale reorganization of the company in August 1984, which involved the selling off of some unprofitable businesses, Coleman departed and Bauer resumed being both chairman and president. The company continued to have strong revenue growth, moving from $129 million in 1982 to $152 million in 1983 to $191 million in 1984. Profits followed the same path for most of the time, with seven straight years of increasing earnings through 1983, The performance of Informatics stock became erratic, as exemplified by a market close in December 1983 where the New York Times wrote that Informatics General was the "big loser" of the day when its stock fell to after a poor earnings forecast was put out, or by a drop of to on a day in July 1984 when another a forecast for a break-even quarter was released. By 1985, Informatics General had some 2,600 employees and offices in 30 cities in North America and in nine other locations around the world. with a low point of $14. He criticized company management, saying further said that "Bauer, the longtime chairman, is 60 years of age and has managed the firm too autocratically and too monotonously for too long." As a result, Wall Street analysts considered the company a prime target for acquisition, with the expectation that new management could make it a better. Wyly had a controversial background with both successes and failures, the latter including a $100 million loss in attempting to establish Datran, a U.S. nationwide digital network in direct competition with AT&T. When that too was rejected, the acquisition attempt became an overt hostile takeover that was later described by one Informatics executive as "an all-out war", with both financial interests and pure ego driving it. (and the next would not be until two decades later, with Oracle Corporation's hostile takeover of PeopleSoft). Received opinion had been that it would be counterproductive, However, Wyly felt that in this case, the staff in question would view more competent management coming in "not as conquerors but as liberators." (In Bauer's later rueful estimation, the main beneficiaries of the takeover struggle were lawyers and investment bankers, who received millions of dollars in fees no matter the outcome. The acquisition was approved by Informatics shareholders in a process that ended on August 13, 1985. At that point, as the Chicago Tribune later wrote, "the Informatics name, long a legend in software circles, was gone." == Aftermath and legacy ==

Overnight, Sterling Software became a $200 million in revenue company, up from $20 million, and one of the biggest firms in the software industry. The entire Informatics corporate headquarters office in Woodland Hills was let go, including Bauer. Bauer also believed he was the longest-tenured CEO in the computer industry at that time. Sterling Software management insisted in the first years after the acquisition, and later in oral histories, that the transition had gone well, that layoffs other than at the corporate office had been minimal, and that they had brought about better performance than Informatics management had. Informatics employees sometimes had a different perspective, as some 40 percent of the staff at the Canoga Park facility were laid off in September 1985, during a day employees called Black Thursday. Some of what they kept became part of the core of Sterling Software going forward. The Ordernet business of Informatics was expanded greatly under Sterling Software as a series of e-commerce initiatives under the rubrics Electronic Document Interchange and Electronic Data Interchange, so much so that it was later spun off as its own company, Sterling Commerce, in 1996. Informatics Legal Systems remained as the name of the subsidiary under Convergent. There it became known as the Wang Informatics Legal & Professional Systems, Inc. wholly owned subsidiary and was still based in Phoenix. Wang Informatics was still active in 1992 when Wang Laboratories itself went into bankruptcy. In 2000, Sterling Software was sold to Computer Associates; that software giant would later be acquired by Broadcom. That same year, Sterling Commerce was sold to SBC Communications; it later became part of IBM. Relations between Bauer and Frank did not remain completely sundered, and in 1999 Frank attended, along with Wagner, Postley, and three other early executives, a private "Informatics Retrospective" hosted by Bauer, where they could, in Bauer's words, "discuss what happened, good and bad." ==References==