[Commentary] Is FileMaker Inc. for Sale?

"If it looks like ____, talks like ____, and acts like ____: there is a high probability that it is ____." —a very wise person.

According to a highly reliable source (I'm not making this ____ up), FileMaker Inc. is for SALE.

It doesn't stop there: I also hear that Servoy is bidding to buy FileMaker Inc.

No ____! My reaction also.

Am I going to tell you where I learned this? Hell no. Am I going to tell you why it makes sense? How can I resist?!

(The rest of this commentary is pure speculation on my part.)

First, look at the database that comes with AppleWorks. It's about as accessible a database tool as it gets. And powerful too for a flat-file database (it can even run a script when you exit a field—imagine that). OK, so it's not relational, but add straight-forward relational capabilities and AppleWorks would have 80% of the features of FileMaker Pro that 80% of FileMaker Pro users use. With word processing, page layout and spreadsheet capabilities thrown in—what a whopping good bargain it would be at $49.00 US.

Then there is the whole thing about FileMaker Inc. being a wholly owned subsidiary of Apple Computer. A leftover artifact from the Claris days that survives only because FileMaker Inc. has contributed to Apple's bottom line for "x" amount of quarters straight. The "x" being a number that I hear each year at DevCon and I still can't remember the exact value. Probably because all that comes across to my brain when I hear "x" is that FileMaker Inc. is pretty proud of "x" and how large "x" is. Reminds me of some people I know.

Which to me says that all Apple cares about is what FileMaker Inc. brings to the bottom line. As long as FileMaker Inc. shows a profit, Apple pays no attention to whatever the hell FileMaker Inc. is doing. I believe this is the main reason for getting FileMaker Pro version 7 foisted on us. If FileMaker Inc. could have delayed another year or two to get a couple of major features figured out (object based and event driven interface anyone?) they would have done so for sure. But they ran out of industry buzzword features (like XML and Web) to add to FileMaker Pro 3.0 to extend the life of that product so version 7 had to ship in the state it was in.

Now let's just briefly scan the beast that is FileMaker Pro 7. In short, you would be hard pressed to find a finer collection of nested dialogue boxes, power user features, "lay" person features, old technology, new technology, proprietary technology, frustrating oversights, simple ways to do things, and bass-ackwards ways to do things in any other single product. FileMaker Pro 7 was supposed to be a re-write for gawd's sake! Who spilled the beer on the product road map???

The seemingly unending charm of FileMaker Pro prior to version 6 (XML was a dubious power feature to add onto FileMaker Pro 5 to arrive at version 6) was that you could learn a little and do a little. Learn a little bit more, do a little bit more. A nice easy slope that progressed upwards at a steady pace. With FileMaker 7, this slope still starts out easy but then soon splits into several roads—all of which go sharply uphill. If I had to choose between teaching new employees Oracle Forms 10g or FileMaker Pro 7, it would be an easy choice for the Oracle product. In my opinion, it now takes just as much effort to become a good developer in FileMaker Pro 7 as it does for any other product on the market currently AND you end up with a developer who can't code worth beans in any other language.

More telling is the fact that FileMaker Pro 7 hasn't brought anything new to the bottom line of their customers. You still have to install clients and a server, there is no versioning, there is no separation of data and GUI/logic, and your data is still locked up in a proprietary format. All of which is old methodology and thus still requires a great deal of effort to deploy and maintain a solution to any reasonable amount of users. Add in the increased cost of client and server licenses and customer ROI (return on investment) has literally gone down with the release of version 7!

Lastly, let's add in a few more facts to the puzzle: FileMaker Inc. revenues have fallen from its high point of $100 million to between $60 and $70 million. A large portion of the FileMaker Pro 7 product development team left or was fired (story here) not long ago. And the last couple of years has seen the departure of a number of key high level people at FileMaker Inc. (did you catch the job openings on Monster.com?).

From my vantage point, FileMaker Inc. is reaching the end of it's product life cycle. It missed its one golden opportunity to innovate in a major and compelling way with the version 7 release. Now, other cool technologies are on the horizon or already here. To make FileMaker Pro innovative again would require a complete product rewrite (as opposed to the combination of old and new code that version 7 is) and FileMaker users are not going to go for upgrading their applications to a new code base so soon after going through the pain of rewriting to version 7. The writing is on the wall and cracks are starting to show. If you've read Geoffrey Moore, FileMaker the product has reached the point where its main customer base are the "conservatives" and the "skeptics". Very few "technology enthusiasts" or "visionaries" are attracted to FileMaker Pro 7 and this is a bad thing for the future of FileMaker Inc.

Coming around full circle: why would Servoy be interested in buying FileMaker Inc.? Because Servoy is what FileMaker developers at the top level have been waiting for since FileMaker Pro 3.0. Servoy is the logical evolution to FileMaker Pro. Makes sense considering ex-FileMaker Pro developers created Servoy.

If Servoy became the official upgrade path to the FileMaker product line, the loss of a portion of the "conservatives" and "skeptics" would be greatly offset by the flood of new "visionaries" and "technology enthusiasts" that Servoy brings. And if I was Apple Computer, I'm thinking that the customer base that is lost can easily be attracted to a relational and limited multi-user version of AppleWorks.

In my opinion, Servoy buying FileMaker Inc. would be the best thing that ever happened to FileMaker customers and developers.

David Workman, Editor
Servoy Magazine

Comments (7)

Graham Greensall 2004-11-10

David You spoilt my coffee break this morning! Logged on to Servoy Magazine expecting to see another raft of great ideas and tips but you lead with the 'news' that Servoy might be bidding for Filemaker. Please use all the influence that you publishing moguls have to persuade the Servoyians to stick to what they do best - producing a great development tool, listening to user feedback and providing great entertainment (couldn't overlook Bob C!). Merging two software companies almost always follows the equation: 2 + 2 = 1. Anyway, the combined name of ServMaker does not have a winning ring to it. Yours hopefully Bothered of Balsall Common

Thunder 2004-11-10

I think the idea would not be to merge the two software companies but rather to give existing fmp customers an intelligent future direction under a familiar mothership. The existing FMP code could be slowly phased out as customers weaned to Servoy and eventually Servoy v.3 would be Filemaker 8 or whatever. Granted, FMP customers would have to go through ANOTHER format change, but it could be eased and sweetened (if Servoy had ownership of the code) and by all accounts they are going to have to anyway ;)

Developer 2004-11-11

What a crock of _________! From what I've heard FileMaker are doing beter now that they have for 4 years. I will stick to FileMaker for when I need it (I use Servoy too) - columns like this do nothing except create FUD and bad feeling between the companies. There's no way Servoy could ever afford to 400-500 million it would take to buy FM (if they were for sale) so why write this article? If this is the business route Servoy are taking (I'm sure you didn't write this all on your own) then count me out - Ill stick with a professional company who don't employ such immature tactics.

David Workman 2004-11-11

(1) Price for FileMaker.... Consider the hostile bid that Oracle is putting on PeopleSoft. I think it's up to around 7.7 Billion now. PeopleSoft's revenue is approx. 2.6 Billion per year. That's a factor of almost three times revenue. Let's put FileMaker's revenue per year at 80 million. A similar hostile bid figure would be 240 million then. However, Oracle is paying a premium for PeopleSoft to convince all the shareholders to vote for it (now that the board rejected a lower offer). It's not like PeopleSoft is looking for a buyer. Typically, when you buy a company you look more at the "maintenance" figure (current existing contracts--guaranteed income when you buy the company) and base a bid price on that figure. Let's say FM's maintenance figure is $20 million. Factor by a generous three times and we get 60 million. I would put the price of FileMaker Inc more in the range of 60 to 240 million than 400 to 500 million. (2) Read what I have to say about FUD in an earlier commentary <a href="http://www.kabootit.com/home/2004/09/commentary_inst.html">here</a>. (3) Nice _______ reference :)

Developer 2004-11-15

You just can't compare the two scenarios. Peoplesoft are one company of many in that ERP space, plus they are struggling. They may have a good-looking turnover, but are they profitable now and are they going to be profitable next year? Probably not. FileMaker Inc, however, have an almost unique product and, as far as I can see are both profitable now and very likely to be for many years. There's a LOT more goodwill in the FileMaker business than in PeopleSoft's. Plus, and it's a BIG plus, they are a division of Apple Computer Inc. Me, I wouldn't want to go to Mr. Jobs and ask for one of his favorite divisions at a cut price! What rumors next? Servoy to buy MS? Servoy to buy Oracle? Servoy to buy lunch?

Michael Rochard 2004-11-15

'Thunder' seemed a little upset by this article which quite clearly stated at the beginning that it was 'pure speculation' on David's part. Could it happen? Yes. Is it likely to? No. Could FileMaker buy Servoy? Yes. Is it likely to? No. If Filemaker bought Servoy, would they? a. kill the product? b. continue to develop it as Servoy? c. continue to develop it as FileMaker 8? Shall I continue with more speculative questions? No! If people never asked 'What if ...? and simply asked 'Why?', we would all have stopped making progress decades ago.

Jamie Magee 2004-11-20

>Who spilled the beer on the product road map??? Not me! But if I had it would have been a good beer! ;-) Very interesting article, David. Speaking as one who so desires an alternative to FMP but cannot seem to get there (out of self-induced ignorance), I would welcome such a development regardless of what it means to Apple. Let's keep speculating...