Electronic Data Systems Corp likes to bill itself as the world’s largest independent computer services company, with the stress on independent. The point it tries to make is that arch-rival IBM Corp with $16.2bn in services revenues may be larger but a significant proportion of that is ‘captive’ revenue, derived from contracts that are directly tied to sales of IBM’s mainframe, servers and other computers. That is certainly true, but that does not detract from the fact that many systems vendors – particularly the mainframe and minicomputer vendors who ramped up their services operations after falling on hard times in the late 1980s and early 1990s – also provide a wide array of computer services not linked to sales of their own hardware. Aside from IBM Corp, Digital Equipment Corp is by far the largest services provider among the systems vendor companies. For the year to June 30, 43% of its revenues, or $6.2bn, came from services. Like most other systems vendors, DEC is secretive about the proportion of revenues that flows from its maintenance contacts – mostly related to its old line of Vax minicomputers and the current Alpha server range – but over the past five years the company has been ramping up a broad-base of services elsewhere centred around its unit. The unit, which has built up a $4bn revenue stream, provides the gamut of services – systems design and product procurement, installation and integration, as well as maintenance. It differs from many of the mainstream services companies in that it declines to offer blanket facilities management services, limiting itself to segments of that market such as network and desktop management, Internet server management and disaster recovery. DEC’s Multivendor Customer Services unit is also one of a half dozen companies authorised by Microsoft Corp to support its products worldwide; and the unit also has a similar arrangement with Novell Inc to provide site support for NetWare users.
Other vendors
With much the same approach and pedigree as Digital, Unisys Corp offers services through two independent divisions. Its Global Customer Services Inc, with revenues of $1.95bn, represents 32% of Unisys’ total revenue. About half of that comes from a declining maintenance base, something that has kept the unit’s growth rate at an unspectacular 6%. However, in its other core areas – network integration and desktop management services – revenues have been rising at 18%, and combined make up around 40% of GCS’ revenues. Unisys predicts that within two years only 30% of its services revenues will come from maintenance. Its second services group, Information Services Inc, also had revenues of $1.95bn in 1995, up 14% over the previous year. It focuses on consulting, systems integration and facilities management. As with Unisys and Digital, UK-headquartered ICL Plc has been supplanting a focus on its own systems for a multivendor services approach. Its ‘autonomous division’ ICL Sorbus Ltd, offers the full array of computer services, but with a large part of its $750m revenues coming from maintenance contracts, its revenues have been shrinking by between 10% and 15% a year. Separately, ICL offers facilities management through its CFM Group Ltd subsidiary which had revenues of $186m in 1995, up 23%. There are plenty of other systems vendors in the same mould: Compagnie des Machines Bull SA, with its $1bn Integris unit; Siemens Nixdorf Informationssysteme AG’s $1.2bn Business Services operation; and Hewlett-Packard Co, which claimed $1.4bn in service revenues.
