Code-Writing Firm ‘Makes Things Work’
Peter Karmanos can explain Compuware Corp. by using a Dilbert cartoon. It’s the one about a computer shaman who chants dire warnings during a business meeting:
“You’d be fools to ignore the Boolean anti-binary least square approach!”
Most of the computer business “is filled with that guy,” Karmanos says, but then he points to the final frame of the cartoon, where, despite all the big talk, “the monster is dispatched to the dark world by the sight of its most feared object,” actual software code.
Compuware has grown into a company valued at $9 billion by producing code, the nuts and bolts of software. Compuware’s products don’t grab headlines the way programs like Java or Netscape do, and Karmanos, the co-founder, chairman and chief executive, proudly calls his firm “the blue-collar computer company.”
“We make things work. We don’t talk about it,” Karmanos, 56, says. “We don’t profess to be changing the world.”
Yet Karmanos has done plenty to change at least a small part of the world, donating more than $26 million to fund cancer research in Detroit--a gift made possible by the energy he put into making Compuware a success.
Karmanos founded the company in 1973 with two partners, Thomas Thewes and Allen Cutting; they used their income tax refunds -- all of $9,000--as seed money. By the end of last year, Compuware had grown to nearly $1.14 billion in revenue and $194 million in profits.
Compuware makes software to help companies with big mainframe computers or computer networks manage their machines. Its products help programmers find and fix computer bugs and handle the massive amounts of data that computers process.
It has grown in recent years by buying up smaller companies and creating business partnerships with other firms.
“Growing up, everything he touched turned to gold,” says his younger brother, George Karmanos. “I heard from his friends that he used to sleep in class, but when the tests came back he’d always ace them. Things he did always turned out successful.”
Born and raised in Detroit, Karmanos got his first job with computers at age 16. He was waiting to pick up his girlfriend, Barbara Ann Schatz, at the firm where she worked when the owner walked up to him.
“He says, ‘Do you want a job? We just got this thing called a computer installed here,’ ” Karmanos recalls. “ ‘I’ll introduce you to the guy in back. Maybe you can help him.’ ”
Karmanos read the IBM manuals overnight and was entranced. He got the job, and by the time he was 18, he was the senior programmer.
After high school, he attended college off and on for nearly a decade, working as a computer technician and taking classes at night. Then in 1973, at the age of 30, Thewes, Cutting and he founded Compuware at his dining room table. Barbara Ann Karmanos, the former Ms. Schatz, helped with the bookkeeping.
But despite all his success, Peter Karmanos has found many things that don’t work, that can’t be fixed for all the time and money in the world.
In 1981, his wife, then 38, was diagnosed with breast cancer and had surgery.
Mrs. Karmanos died in January 1989 at the age of 46, leaving Peter with three sons and a lingering anger. What stood out in his mind was that experts on cancer were so hard to find and that the expertise was so hard to come by.
Later that year, his sister Angela suffered a seizure.
Karmanos recommended the expert who had seen his wife. The doctor ordered immediate surgery, and a baseball-sized malignant tumor was removed from Angela’s brain. She has not had a recurrence since.
“This is the difference between going to a comprehensive cancer center and going to see your local doctor,” Karmanos says.
Those experiences were on his mind when the cancer center reorganized and came to him for a donation. Karmanos looked at a list of options and chose the top one for $15 million. The money brought the right to name it, but center officials had to talk him into doing so.
As of December he had given more than $26 million to the Barbara Ann Karmanos Cancer Institute.
His brother, George Karmanos--who was treated at the institute for bladder cancer--says Peter is still driven in part by Barbara’s death.
“I think he would have given every dime he had to have her,” he said. “Life’s cruel sometimes. It changed him to the point where he got into his work and made his company what it is today so he could donate the money.”
Compuware has also enabled Peter Karmanos to take on other projects, such as buying the Carolina Hurricanes, a National Hockey League team.
Karmanos expects his company to keep growing and predicts he will have between 10,000 and 20,000 employees in the next decade, up from the current 8,700.
