Bluebird Software Plc, the AS/400 agent in which IBM UK Ltd has a 5% shareholding, called in an administrative receiver late yesterday. The Rickmansworth, Hertfordshire company says that it approached its major backer, 3i Plc, for further funding, but 3i’s best offer was unacceptable. Bluebird then approached a number of venture capitalists and says that it was close to achieving refinancing. IBM and Bluebird have been conducting top-level negotiations over the past week, and many sources believed that IBM would be actively involved both in the refinancing and restructuring. However, Bluebird’s Frank Park says that despite being extremely supportive, IBM felt that it couldn’t come up with the extra funding. Bluebird made 10% of its workforce redundant last month (CI No 1,692), leaving it with 270, but this latest development will almost inevitably mean further job losses, although Park says that the directors want Bluebird to carry on if at all possible. He claims that financial mismanagement and a black hole caused the company’s problems. Too much money went into local government software and developing new products, and Bluebird ended up using its overdraft rather than financing new development realistically. Commentators say that Bluebird’s troubles may be due to a number of factors including the knock-on effect of IBM’s commission structure last year, described by many agents as dire. Others say that Bluebird is overly dependent on commission from IBM and Pansophic Systems Ltd, for which it is the main UK representative, and it is suffering the penalty of not owning its products. Bluebird is the second AS/400 agent to enter receivership in three months, with Manchester-based Banford Computers suffering the same fate, although it re-emerged as Byford within a few weeks and was immediately appointed as an IBM agent. The failure of Bluebird is a big blow to IBM, which was already having a difficult time with the AS/400 in the UK. An administrative receiver from Touche Ross & Co will be appointed.
