Sterling Software
| Company type | Public |
|---|---|
| Industry | Software |
| Founded | 1981 in Dallas, Texas, United States |
| Founder | Sterling Williams, Sam Wyly, Charles Wyly |
| Defunct | 2000 |
| Fate | Acquired by Computer Associates International |
| Headquarters | Dallas , United States |
Key people | Fran Tarkenton (board member) |
| Products | MARK-IV (via Informatics acquisition), CA Gen (via TI Software acquisition) |
Sterling Software was an American technology firm established in Dallas, Texas, in 1981 by Sterling Williams along with brothers Sam and Charles Wyly. In 2000, Computer Associates International acquired the company through a stock-for-stock deal valued at $3.3 billion. After the acquisition, Computer Associates divested Sterling Software's Federal Systems Group, selling it to Northrop Grumman.
The company gained recognition for its assertive acquisition tactics, including the notable hostile takeover of Informatics General Corporation in 1985. Informatics was an early innovator in software and services, known for creating the MARK-IV fourth-generation programming language during the 1960s. This product became the first software package to generate over $1 million in revenue following IBM’s decision to separate software from hardware in 1969.
With support and guidance from Werner Frank, one of Informatics' original founders, Sterling Software initiated its takeover by progressively raising its bid to shareholders until the Informatics board was compelled to accept. This strategic acquisition caused Sterling Software’s revenue to surge from $20 million to $200 million almost instantly. The company resumed its acquisition-driven growth strategy within two years.
In 1993, Sterling Software completed its 20th acquisition by purchasing Systems Center, Inc., based in Reston, Virginia, through a stock-for-stock transaction valued at $185 million. This deal prompted a reorganization of the company’s structure, shifting focus from equal divisions to business-oriented units. The following year, Sterling acquired KnowledgeWare, headquartered in Atlanta, for $74 million in stock; this move resulted in approximately 250 job eliminations. KnowledgeWare’s founder, Fran Tarkenton, joined Sterling’s board as part of the agreement.
In 1997, Sterling Software bought Texas Instruments' software division located in Dallas (TI Software) for $165 million in cash—an amount representing roughly two-thirds of TI Software’s revenue from the previous year—which included ownership rights to CA Gen. The expansion continued with the acquisition of Boston-based Cayenne Software for $11.4 million in cash in 1998 (marking Sterling’s 30th acquisition), followed by the purchase of Fremont-based Interlink Computer Sciences for $64 million cash in 1999. Interlink was subsequently integrated into Sterling's Network Management Division.
See also
- Connect:Direct#History, regarding VM Software Inc. and Sterling.
External links
- Oral history interview with Sam Wyly. Charles Babbage Institute, University of Minnesota. Conducted by David Allison on December 6, 2002; discusses University Computer Corporation developments, its sale to Computer Associates, Wyly’s founding of Sterling Software, Informatics acquisition, Sterling’s sale, and perspectives on the IT sector.
- – interview featuring Sam Wyly.
- Biography of Sam Wyly
- Thomas Derdak, "Sterling Software, Inc.", International Directory of Company Histories, circa 1994 at Encyclopedia.com