NCR Corp has finally abandoned the traditional mainframe business, driven out of it by another company that is hanging on in there by its fingernails. NEC Corp has ousted NCR Japan in a battle to win an order from Sumitomo bank for 24 large mainframes to become the base part – the Accounting system – of its Fourth Online System. Sumitomo Bank has stuck with NCR equipment for every generation of its banking systems since the implementation of the First Online system in the 1970s, and the defeat means that NCR now loses its last big customer account and one for which it maintained considerable investment in mainframes – even developing the 9800XL series, last of its mainframes – especially for Sumitomo. For NEC, the order means an increase by one third on the current installed base of top end ACOS 3800 mainframes, bringing the total installed to 126 units, and making the ACOS 3800 much more successful than the previous top-end ACOS generation, of which only 46 were sold. Sumitomo Bank is the bank affiliated with the Sumitomo keiretsu or extended company family, with which NEC is also associated. NCR lost because it was not prepared to develop yet another generation of the 9800 – derived from the company’s Criterion line, which dates back to 1976. Instead it bid its large parallel System 3600 machine running Unix, which meant that the bank faced a big conversion whatever it did. But the Nikkei Industrial Daily sounds a note of warning for NEC: there are two pitfalls for the company with the current order, it says: the sheer difficulty of running a development project to create the mainframe software that makes up the Fourth Online System people involved with the development of Third Online Systems predicted the end of such enormous projects; and the danger of overlooking the trend towards downsizing because it devotes too much time and too many resources on the project. The paper concludes that NCR may yet be a winner from its loss of the Sumitomo Bank account since it can now focus entirely on its Open Systems strategy in Japan.
