Phibro Energy Pulls Plug On MC2 After Mobil Oil Nixes Deal
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Phibro Energy Inc. of Westport, Conn., has dramatically scaled back its commitment to mc2 Technologies Inc., the software vendor it set up to market its NeXT Computer Inc.-based energy trading system.
Phibro, a commodity trading subsidiary of Salomon Inc., brought the ax down on its would-be spin-off vendor at the beginning of the year. It let go some 30 consultants associated with the mc2 development effort, suspended marketing efforts indefinitely, and ordered the remaining 10 or so Phibro staffers involved with mc2 to concentrate on developing systems for internal use only.
Spokesmen at Phibro decline to comment on any matters concerning mc2 or Phibro, citing a new corporate policy. A Salomon spokesman declines to comment.
But according to other sources at the firm, the cutbacks at mc2 are part of a ripple effect that began when Phibro reported poor earnings in the third quarter of 1992. Salomon responded to the bad results by merging Phibro's trading operations into its own at year-end, and slashing the subsidiary's staff and operations by 30 percent across the board (TST, Dec. 14, 1992).
Though Salomon spared mc2 at the time, when word of the Phibro cutbacks got out, Mobil Oil Corp. canceled a pending deal to buy the vendor's software. Mobil would have been mc2's largest client to date (TST, Oct. 5, 1992). With Mobil's defection, Phibro had no choice but to apply the ax to its software sales effort. Mobil officials decline to comment or didn't return calls.
Phibro's own traders -- numbering about 70 since the cutbacks - - continue to use the mc2 software running on NeXT processors. However, one source says that there isn't much mc2 software to be used. This source says that planned trading and position-keeping systems are not as yet fully functional, despite the fact that Phibro has had more than a year to produce.
Now, this source says, Phibro developers have started work on a new mainframe-based package of energy trading applications written in Cobol and accessible on the NeXTs via 3270 emulation. The source says that the only usable mc2 application is a market data display tool supported by a feedhandling system from Kapiti PLC.
Sources say that Phibro's original plan called for the NeXT workstations to provide access to both mc2 and mainframe-based back-office applications. The mc2 systems are meant to run on Sun Microsystems Inc. SPARCstation servers, while back-office systems run on the Digital Equipment Corp. mainframes.
Sources say that Phibro employees formerly devoted to enhancement of mc2 will now join forces with other Phibro management information systems and development groups.
This newly configured Phibro IT group will continue development work on mc2 -- but at a much slower pace than before, if at all. The group will also handle the firm's other technology business.
Sources say that the only thing that could drive Phibro to recharge mc2 as a vendor would be a commitment from a major customer. At the same time, sources speculate that a company better equipped to run a software vendor may purchase the marketing rights to the mc2 applications from Phibro.
While not a severe one, Phibro's decision to back off on mc2 represents another blow to NeXT's effort to establish itself on Wall Street. However, now that NeXT has all but come clean with its intentions of transforming itself into a software house, perhaps it will begin to expand its product line with a trip to Connecticut.
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