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CrossWorlds: Great Team, But Tough Market

With more than 26 years of experience in the information technology arena, Alfred Amoroso (President and CEO) is now working on taking CrossWorlds Software Inc. public. Mr. Amoroso began his career with EDS Corporation back in 1974. In 1977 he founded Computech Corporation, which was purchased by Price Waterhouse in 1985. He continued to hold senior mangment positions with PricewaterhouseCoopers until he left the firm to work at IBM in 1993. Mr Amoroso stayed with IBM until October 1999, which is also the month he came to work at CrossWorlds Software Inc.

The price range on CrossWorlds IPO is $14-16, the lead underwriter is Chase H&Q and the proposed ticker symbol is CWLD.

CrossWorlds Software Inc. provides e-business infrastructure software -- products that allow businesses to use the Internet in order to reduce information technology costs, increase productivity, improve responsiveness to customer demands and enhance overall competitiveness.

E-commerce leaders have found that a well-planned business integration strategy, both within and beyond the enterprise, is both difficult and a necessary part in setting up an efficient e-commerce Web site. Real time access to information from anywhere in your enterprise is a must.

CrossWorlds products are comprised of 5 key elements:
- Comprehensive e-business support
- Real-time Business Process Automation
- Packaged Application Integration
- Custom and Legacy Application Integration
- Scalable Integration Architecture

In addition to Mr. Amoroso, other outstanding management personnel include Mark Kent, Senior Vice President and Chief Financial Officer and Prashant Gupta, Senior Vice President and Chief Technology Officer. Mr Kent has 18 years experience in banking and financial management including Corporate Treasurer of LSI Logic Corporation. Mr. Gupta worked as the software architect at Illustra/Informix, and he served as the chief technical architect at Sybase.

CrossWorlds has managed to attract the interest of investors such as Axon Solutions (United Kingdom), Compaq Computer Corporation, Intel Corporation, J.D. Edwards, Omron Corporation (based in Japan), Nexus Group LLC, Dain Rauscher Wessels, Hambrecht & Quist/Access Technology Partners. They have also attracted individual investors including Michael Dell, CEO, Dell and Dave Duffield, CEO, PeopleSoft.

CrossWorlds customers include Applied Materials, Nortel Networks, Siemens, Sony Corporation, MCIWorldCom, Excel Communications, Inc., U S WEST, Andersen Corporation, Ingersoll-Rand, The Dow Chemical Company, DuPont, Baxter Healthcare, and Neoforma.com, Inc.

CrossWorlds revenues have grown from $1.1 million in 1997 to $7.7 million in 1998 and to $19.1 million in 1999. However, debt is growing. It was $14 million in 1997, $41.4 million in 1998 and down to $38.2 million in 1999. Their accumulated deficit as of March 31, 2000 was approximately $106 million.

The press, their customers, and their alliances boast CrossWorlds accomplishments. The recent hire of Alfred Amoroso and the hard work CrossWorlds is definitely a plus. However, the company is in an extremely competitive space and in the harsh IPO environment, it may be difficult for this one to be a high performer.