Fujitsu Ltd, as reported, has elected not to take up its option for this year to study IBM Corp’s latest mainframe software, available to Fujitsu through a secure facility in Japan set up as a result of arbitration between the two companies in 1987. Since 1989, Fujitsu has been paying an annual fee for access to the facility of between $25.7m and $51.3m, the Asian Wall St Journal reports; this is in addition to a fee of $833.2m paid upfront to IBM on the occasion of the settlement for past use of the software. Fujitsu reported a consolidated loss of $148.6m for the financial year ended in March this year, and is suffering from distinct lack of interest in new mainframes on the part of Japanese customers hit by the recession, so as we hazarded at the time, the reasons Fujitsu has knocked back the opportunity to examine IBM’s software entrails are two-fold: there is little interest in IBM-compatible mainframes, and Fujitsu needs to conserve cash. By contrast, Fujitsu Australia Pty Ltd has just reported improved revenues equivalent to $291m for its fiscal 1993 to March 31. Fujitsu follows a close third behind IBM Australia Pty Ltd and the local Digital Equipment Corp subsidiary in terms of revenue in the Australian market.

Merger with ICL Australia

Last year’s merger with ICL Australia, while causing some initial pain in terms of redundancies, has provided a fillip to business and accelerated a re-orientation towards services. Service revenue from major businesses such as ex-ICL’s third party hardware maintenance business, systems integration, and services such as technical support (in English) of Fujitsu’s other overseas subsidiaries, now makes up 49% of Fujitsu Australia’s revenue. Recently Fujitsu Australia’s managing director Neville Roach made another strategic move in buying 67% of Logical Solutions Pty Ltd, a successful reseller of the Apple Computer Inc Macintosh, and more recently Compaq Computer Corp, personal computers. The company is headed by his ex-ICL Australia counterpart Robert Kaye, who left when the Fujitsu-ICL merger was completed. Logical Solutions last year reported profits of $1.35m on revenues of $54.2m. The share acquisition is seen as a strategic move by Fujitsu to broaden its product and services capability in the systems integration business, and is also an indicator of the way in which the ICL tail is beginning to wag the Fujitsu dog these days, because it closely mirrors the acquisition of the big personal computer distributor Technology Plc by ICL Plc in the UK.