MAI Systems Corporation

Case Study
Pages 8 (2008 words)
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MAI Systems Corporation dba Hotel Information Systems is a provider of enterprise wide solutions including software solutions, mid-range, multi-user computer systems and their system software, other network products, and application software designed for several specific industries.


Recently, Softbrands purchased the Company back in August 2006.
Since its inception in 1957, the Company has gone through significant changes. Being an opportunist and thanks to IBM and the Justice Department in 1956 when the entire computer industry was under the monopoly of IBM, Walter R. Oreamuno and his associate came up with an idea of re-purchasing the computer equipment from IBM customers and leasing it back to the customers at a lower rate than what was being offered by IBM. This idea was a great boast to the MAI's growth but did not last that long. During this time, the Company opted for an IPO with an
Not realizing IBM's strategy of depreciating its punch card equipment and the innovation of 360 third generation computer, MAI invested substantially in the older equipment that resulted in MAI's growth to stall. During 1967, a major setback on merger plans with Transamerica, Oreamuno stepped down as the CEO and was replaced by Luther Schwalm an ex-IBM veteran.
With a shift in strategy, the earlier investment in the older IBM equipment did not prove to be fertile, Schwalm decided to write-off the outdated older equipment. ...
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