Madrid-based ICL Espana SA has two main objectives for 1995: to increase its share of the Spanish personal computer sector; and to break even this year, its managing director Ignacio Orduna told Computerworld Espana and Tribuna Informatica in recent interviews. ICL Espana’s turnover in fiscal 1994 totalled around $62.1m, almost the same as that of 1993, and there was an unspecified operating loss. Towards the end of 1993, the Spanish subsidiary reshuffled its organisation into three independent ‘Business Streams’ (CI No 2,480) – technology, systems integration and services – which, according to Orduna, was the result of considerable analysis of what kind of business the company was developing and of how it might bring this business to the client most effectively. Each unit will manage its resources as it sees fit, although ICL will continue to announce overall turnover figures for Spain. Over 1994 ICL Espana shed 90 unproductive positions to leave a staff of 360, and Orduna said that optimum employment levels have almost been reached. Some of the problems encountered by the company in Spain are endemic to the country, Orduna claimed. Financial costs are much higher than those faced by any other subsidiary, while payment terms are absolutely deplorable. At the same time there is considerably more offer than demand. If you add up all the sector’s sales forecasts, they will come to double what the market will actually buy. The only solution is to close up or wait for the market to stabilise, he said. Orduna believes that the gradual recovery of the market in Spain will follow a similar pattern to events in America: during the course of 1995, hardware will pick up first; in 1996/97 services. The stagnation of the market in Spain over the last two years has left Spain trailing even further behind other European countries and the country is currently under-equipped in terms of both hardware and services, with the possible exception of some sections of central and regional government, Orduna said. We are determined to survive here and to do so we must gain a foothold in wider distribution channels, such as large stores, said Orduna of ICL Espana’s priority for action in the personal computer sector. In 1994 the company sold more than 300,000 boxes up from 1993 sales of 200,000, and Orduna was convinced that what he refered to as second generation buyers, who have turned their backs on clones and want a more reliable computer, will also respond to the ergonomic sales pitch of ICL. The company cannot opt out of the price war, but the Orduna warned of the catastrophic results which that may follow when prices are thrown out of the window, citing the example of the North American airline sector after deregulation. In the light of the recent edict made by the president of ICL that services had to come to represent more than 50% of the company’s earnings, Orduna claimed the Spanish arm was already entering new markets with comprehensive maintenance contracts that offered more added value than pure hardware support contracts. Finally, Orduna said the Spanish subsidiary still had to resolve the problem of direct competition that exists between ICL and Fujitsu Ltd products across the range of personal computers and Unix systems, a matter that he said ICL’s big shareholder would have to decide.
