February 12, 2011

Sterling Commerce predecessor company Management Horizons Data Systems (MHDS)

I started drafting this post along with others around the time of my parents’ deaths, then put it aside. However, I have been informed that my father’s old colleague Alton Doody has cancer himself, and if we are ever to get his input, it would be best to solicit it REALLY SOON. :( So I’m finishing this up now as best I can.

Here’s the part I know from my own memories as

My father moved to the Columbus area in 1973 to join Management Horizons, a consulting firm serving retailers. Management Horizons had its own spin-out already, a time-sharing company called Management Horizons Data Services (MHDS), with which it still shared a building on what is now Old Henderson Road in Upper Arlington. And, this being a world full of coincidences, MHDS is very on-topic for the primary focus of this blog (software industry history).

MHDS’ main business was a full suite of what we might now call ERP for distributors and/or retailers. That never amounted to much. But its secondary business was an electronic interchange for direct placement of orders, called Ordernet. Ordernet turned into Sterling Commerce, a > $1/2 billion company that has been acquired for >$1 billion more than once.

The chain of events, roughly, is: 

At that point I forget the details, but a couple of multi-billion dollar acquisitions/divestitures have ensued.

Some day I may dig out the numbers for Informatics’ revenue breakdown in the early 1980s. Ordernet wasn’t big, but looked like a rising star. MHDS  classic wasn’t big either, and didn’t look like it was going anywhere. Both appearances were later born out.

Online research uncovered some other sources, namely:

On pages 18-19, the Werner Frank link notes that Informatics acquired MHDS in what sounds like 1974, from then-owner Citibank. MHDS was doing $7.8 million in revenue (which Frank failed to break out among its two business segments), was acquired for $3.4 million, and apparently brought a $3.3 million long-term contract along with it, as well as a cheap loan.

Unfortunately, Davidson’s history* is inaccurate in some details I can check from memory. E.g. it says the Doody Company was created in 1974, which is too early, and it omits Informatics General from the history of MH’s information processing division. It also includes Aetna in the list of outfits that owned MHDS, which is news to me and also, apparently, to Werner Frank.

*As I write this, another copy is available for sale on Amazon. Just Google on “History of Management Horizons.” Yes, we paid around $20 for my copy too, even though there’s a $0.99 price tag on it clearly crossed out. :)

Anyhow, Davidson wrote:

Comments

9 Responses to “Sterling Commerce predecessor company Management Horizons Data Systems (MHDS)”

  1. A software marketing pitch from 1972 | Software Memories on February 12th, 2011 1:44 pm

    [...] the process of researching my recent post on Management Horizons Data Systems, I came across an excerpt from a 1972 marketing brochure (quoted in the “History of [...]

  2. Jim Klun on March 4th, 2011 12:02 am

    Started as tech intern in Mhds datacenter in 78. 33 years later – through Informatics, Sterling Software, Sterling Commerce, SBC, and ATT -I now find myself an IBM employee. I know little of the actual origins of the company. This helps a lot! Need more.

  3. Daughters of William D. Plumb on August 9th, 2011 1:10 pm

    Why is there no mention of our Dad? He was the founder of Ordernet and is widely acknowledged as the one person who single-handedly developed the business of EDI before the term had even been coined–reference from the EDI Forum in two issues: one that identified him as the leading “EDI Entrepreneur Extrordinare” and the second in 1995 that was entitled, “In Memorium to William D. Plumb.” That issue reiterated that it was our father who started Ordernet out of his home office desk drawer at the end of his tenure at MHDS, throughout his years at Informatics, and after their acquisition by Sterling Software. It is so sad to us that our dad started what is now electronic commerce. His business concept was precisely what drove the acuisition of MHDS by Informatics, followed by the acquisition by Sterling Software. His business created skyrocketing revenue that established Sterling Software as the leader in this industry in the U.S. Sam Wyly notes in his book that Ordernet caught his attention as a sleeping giant. After Ordernet, which our dad was always the President of, became visible as the product that was the backbone of Sterling Software, the stock grew 400% in one year. He then was sent to London to establish Sterling (Mr. Samuel Wyly thought Sterling Commerce sounded better than Ordernet) as an international giant. What no one knew, including us at 9 and 10 and our Mom, was that in ’93 he’d be promoted to be Pres. of the Sterling Software International Group and also diagnosed with incurable cancer. Our world collapsed in a year and a half. He managed a stunning expansion of the business throughout the world, but we buried him in Scotland in 1995. He was only in his mid-50s. Our family will never, ever forget him, but all of the histories told about the beginning of an industry that transformed the world do not mention his name. Sterling Williams, on the day he died, wrote to all staff that the one person who drove Sterling Software and then Sterling Commerce to dominate this global industry was our Dad. He was bigger than life, he left a huge vacuum. But plenty of people stepped in to take credit for what he did; he created lots and lots of millionaires, but we as a family received nothing. We still today want: 1) to have had our dad be with us while we grew up–and now, too; 2)to know that he is remembered, 3) that he was given his due place in the incredible success story he scripted, and 4) we wish our Mom had not had to work herself to death in a futile attempt to keep us out of the world of poverty.

  4. Curt Monash on August 13th, 2011 9:18 pm

    Thank you for sharing your Dad’s story!

  5. Bob Schulz on January 1st, 2012 1:03 am

    While completing my PhD in Business(Marketing) at Ohio State(1971), I was hired by Bill Davidson and Alton Doody as a consultant with Management Horizons, starting about June 1969 and was transferred to MHDS in about January 1970, as Director of Management Education.

    From 1970 through June 1973, I developed and delivered something like 21 different
    North American regional computer conversion/implementation training programs for about 25 people at a time for about 2,000 different managers from about 100 MHDS clients and am very familiar with the MHDS history up to June 1973. Since July 1, 1973 I have been a Professor of Strategic Management at the University of Calgary.

    Of course, I was very familiar with the MHDS software and applications, worked an average of 87 hours per week, and at age 28 or so, enjoyed
    working with an incredible group of MHDS people.

    In my opinion, MHDS was running centralized batch teleprocessing 25 years before the internet.

    In my opinion, over the past 40 years there has NEVER been any ERP middleware that can compare to the ease of training, conversion, or powerful profitable use as the MHDS software. Further, MHDS did not need Sharepoint or any other software to knit database(s) together.

    My recollection is that Citibank focused on using the MHDS computers for overnight processing of American Express transactions.

    In my opinion, Citibank never saw that the MHDS software provided an opportunity to control, at a minimum, the information flows, banking, credit, and management consulting for at least the entire wholesale and retail hardware, grocery, drug, sporting goods, and industrial supply industries for the whole world.

    In late 1972, I saw the Citibank takeover coming.
    My recollection is that I announced my resignation on independently the same 1973 May day as the Citibank announcement to buy 100% of MHDS.

    My recollection is that I was the first among something like 45 of the top 50 MHDS people who resigned in the next 8 months, which gutted the core MHDS business, and did not leave much expertise or experienced people for Informatics or anyone else.

    MHDS was never the same after Citibank starting taking over in 1973. So, it is no surprise that MHDS morphed into Ordernet or other software after 1973, as 95% of the original amazing team of about 50 people who understood and synergistically executed on the Davidson/Doody MHDS vision had left.

    My recollection is that the Citibank managers who came in to run MHDS said that the 9 top programmers who developed the MHDS software in 18 months would have required 500 programmers for 5 years in New York. Or, as history has shown over the past 40 years, the powerful MHDS software/middleware has never been duplicated so far–but perhaps in the next decade in India or China.

    Sincerely,
    Bob Schulz

  6. Cary Scofield on February 24th, 2012 10:29 am

    Noticed the mention of Ordernet in the above history and comments. I was one of the original programmers for Ordernet. One of our first applications was the transmission of orders for Type II narcotics. In particular, if memory serves me right, our first customer was Smith-Kline-French.

  7. Randy Murray on September 30th, 2012 9:37 am

    I worked directly with William Plumb and it’s a shame that he’s not better recognized. Not only was he the father of EDI, but he is the one that coined the term ecommerce (although at the time it had nothing to do with consumer sales and online stores).

    Bill was a true visionary and business leader. More than that, Bill was one of the best business managers and truly thoughtful executives that I have ever known. Bill knew the names of everyone that worked for them and had the special gift (or organizational secrets) to always remember everyone’s birthday!

    Bill Plumb was more than an EDI pioneer. He was one of the unsung heros of what is now the modern era of ecommerce.

  8. Darwin Busa on December 3rd, 2012 5:12 pm

    I worked with Bill Plumb for a number of years and he was one of the finest, if not the finest person I ever met. One of my last encounters with Bill was when he was heading up the Sterling Commerce International operations not long before he died. He was hosting a distributors conference in London in and I was attending as a representative of the Communications Software Group of Sterling Commerce. My wife and I decided to take a vacation co-incident with the conference and she joined me at the opening meet-and-greet session. Upon arriving we ran into Bill and I introduced him to my wife. We chatted for a few minutes before he indicated he wasn’t feeling well and excused himself. A few hours later we ran into Bill again and he immediately greeted my wife by name and took back up with the prior conversation. I did not know it at the time but Bill was quite ill and when he excused himself had actually left the event to get some rest. The fact that he was an outstanding host and remembered my wife’s name after meeting her once was not something extraordinary for Bill, he had a real knack for that. What was amazing was his continued ability to do so under the circumstances of his illness. I remember a friend who worked for Bill hearing from him about his illness saying to him and I paraphrase, Damn it, you can’t die. You are the best boss I ever had. I can’t think of a more fitting epitaph.

  9. David Meade on July 27th, 2013 8:20 am

    I enjoyed my work at MHDS in 1972, 73 and 74 in finance and project management of the company itself — worked for David Revis. Also, assisted Fred Ragusa who was head of Sales and did some work with Cy Wilson and Max Gould (from Citicorp)and others.

    Great company with lots of talent and excellent software offering.

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