In an acknowledged bid to slow the decline in its revenue from proprietary systems, the Groupe Bull arm of Compagnie des Machines Bull SA unveiled the result of a $50m investment its DPS 7000 line – a mid-range and high-end series, featuring a new parallel multi-server architecture based on new VLSI CMOS technology, as reported briefly (CI No 2,404). Although Bull acknowledges that its total DPS revenues are likely to drop by 10% this year, it says it will see a return on its investment because of exceptional DPS profit margins and because, as a spokesman says, revenue is not declining because customers are leaving but because MIPS are getting cheaper and cheaper. This business is not increasing from a revenue point of view, so it is our responsibility to deal with a business that has negative trends. These trends can be slowed, since we are starting with an enormous quantity of revenue installed and big margins. By the way, in 1994 I will provide probably between 70% and 80% of the company’s net profit, whatever that will be, said Francis Ackermann, vice-president of Bull’s Enterprise Servers Division.
Mainframes not a growth business
The goal of the company is to grow its revenue as much as possible, but relying on other divisions because the mainframe division itself will not be a growth business, said Bob Forzani, director of enterprise servers product and business management. With this announcement, we have completely mastered parallel symmetric multiprocessing, said Georges Tahar, DPS 7000 sales development manager. The top model comes with 24 of the new CMOS microprocessors, which packs 5m transistors on a single chip, and are Bull’s second generation CMOS technology. While our competitors are saying they will deliver CMOS systems by 1996, our systems are already 100% CMOS technology. Bull needs this piece of hardware to help sustain the momentum, to slow down the decline in this part of the business, which will be better managed than what IBM will see, Ackermann said. The bid to retain its installed DPS 7000 customer base could be seen as key to the entire company’s fate. While Bull reported that its first quarter revenues grew 21%, due largely to growth in its personal computer and open systems divisions, the profitability in those divisions is marginal. As a result, Bull realises how precious are its DPS customers; the moment they stop choosing DPS systems en masse, Bull’s fate is likely to be sealed. In what may have been a hint of negative things to come, Ackermann said, The first quarter has led us to believe we’ve passed from dreaming [about recovery] to some kind of reality. Each quarter will not show such positive results, but nevertheless we did do it in the first quarter, and we will try to do it again and again.
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