Informix was Oracle's top rival — then its CEO faked $200M in revenue

Informix was founded in 1980 by Roger Sippl and Laura King as Relational Database Systems, building a relational database for Unix. Renamed Informix Corporation in 1986, it grew into Oracle's most serious rival, holding 16% of the database market by 1995. Its Informix Dynamic Server consistently won performance benchmarks, and Informix was the first of the big three database vendors to ship object-relational support. By 1996 it was an approximately $1 billion company, famous for taunting Oracle with billboards near its Redwood Shores headquarters — including one that read 'Dinosaur Crossing.'

But CEO Phillip White, who had led the company since 1989, was running a parallel fiction. From 1994 through 1996, Informix overstated revenue by over $200 million through channel stuffing — booking license sales to partners who had not sold through to end customers. When the first-quarter 1997 revenue fell $100 million short of expectations, the fiction unravelled. In August 1997 the company announced it would restate three and a half years of financial results, reducing sales and earnings by more than $250 million. The stock, which had traded around $36, collapsed to $4.

White was ousted in July 1997. Shareholder lawsuits followed. In April 2001, IBM bought the core database business — Informix Software — for $1B. The remaining company became Ascential Software; IBM bought it in May 2005 for $1.1B, netting shareholders just $4.62 per share. White was indicted in November 2002 on eight counts of fraud, pleaded guilty, and served 2 months in prison in 2004. Informix had been Oracle's top rival. The fraud turned a $1B market leader into an IBM acquisition.