Meantime the picture from Tokyo for Amdahl’s dominant shareholder, Fujitsu Ltd, looks a lot less bright. The world’s second biggest computer maker sees hard times ahead as the trend towards smaller computers slowly takes hold in Japan, chairman Takuma Yamamoto told Reuters reporter Sebastian Moffett in an interview on Friday. Last year’s first ever loss by IBM Corp sent a chill through other big mainframe makers, who wondered if they were in for a similar shakeout as users downsized to powerful workstations and personal computers. With IBM suffering as much as it is, Fujitsu is unlikely to get away without some pain too, said Yamamoto. The degree may not be the same, but we probably can’t avoid it. The company is now preparing to revise down both yearly and interim parent profit forecasts for the current fiscal year, and longer term, Fujitsu faces bigger challenges. Its major problem is how it will cope with downsizing and the gradual passing of the age of mainframes. Japan has been slow in downsizing, due largely to the conservative corporations that are reluctant to entrust important company information to new systems.
ICL skills
Changes in the American computer industry are faster – Japan is more gradual, said Yamamoto. But this does not mean the Japanese can ignore the efficiency it brings about. Fujitsu cannot continue to depend on mainframes as it has in the past, said Shigeru Yoshinaka technology analyst at Barclays de Zoete Wedd Securities. He is guardedly optimistic about the company’s chances of adapting successfully to the new environment, looking hopefully at the Unix and open systems skills it can acquire from 80% affiliate ICL Plc. Sales by Fujitsu account for more than a third of Sun Microsystems Inc’s Japanese workstation sales, and it has a sales alliance with Siemens Nixdorf Informationssysteme AG in Europe for supercomputers. Fujitsu also hopes to increase its presence in personal computers but these are still a small part of the its business, and will do little to alleviate the pain of diminishing mainframe profits and the lower margins of open systems. Hardware is going to get cheaper, said Yamamoto gloomily. We can’t expect double-digit growth any more.
