Shell spins off management systems arm

Shell Transport and Trading will today spin off a software start-up that has developed “off-the-shelf” systems to enable companies to monitor global business performance.

Kalido, part of the IT services arm of Shell, was set up in 1997 to develop data management systems for the Shell group.

It not provides performance management services for Shell subsidiaries in more than 85 countries and has been adopted by Unilever.

Andy Haylor, chief executive, said Kalido’s data warehouse software would enable companies to install and customize management systems quickly instead of having to build them from scratch.

Kalido made sales of $3.3m in 2000 and expects to become profitable by the end of 2002.

It generates revenues from sales and maintenance of software. The system runs across a number of localized servers around the world.

Kalido charges an installation fee of $300,000 for each server and then a yearly 17.5 per cent maintenance charge for each server’s upkeep.

Unilever – which was “feeling the same pain” as Shell in its inability to find a workable business performance system according to Mr Haylor – is the most prominent of Kalido’s handful customers.

Analysts are impressed with Kalido’s offering. Frank Buytendijk, of Gartner Group, said that Kalido’s advanced stage of development would help it in the stiff competition it faces.

“Normally vendors have capital pressures and have to roll out software in six to nine months but Kalido has had the luxury of the deep pockets of Shell. That is quite an advantage.”

But he also warned that the software’s ability to feed through changes in data systems quickly and cheaply could become a “Pandora’s box.”

If you use Kalido, you need to develop mechanisms to control change,” he said.

Lisa Williams, of the Yankee group, added that Kalido would have to work hard to get companies to adopt its “revolutionary” software.

“They are competing against the way people have always done data management. People don’t always want change,” she said.

By: Elizabeth Rigby

Source: Financial Times


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