There is a dismal familiarity about the figures from ITL Information Technology Plc – losses on static turnover: in the mid-1970s the company’s turnover, in its previous incarnation as Computer Technology Ltd, hovered around UKP4m for three years in succession. The main ostensible difference this time is that there was a period of strong growth in the interim and it is rather larger these days: the figure it has settled at this time is UKP31m. The big underlying difference this time is that where in the 1970s, the company’s only strategy was more of the same, this time ITL is in the midst of a fundamental change of direction, making the risky but essential step of dumping its proprietary heritage and standardising on Unix. And when its performance is compared with continental siblings going through the same enforced trauma, Norsk Data A/S in particular, things do not look nearly so bad as they might have been. Moreover there are strong signs that the strategy may be succeeding and that the company may be nearing the end of the painful transition period: in the second half, ITL made a pre-tax profit of UKP1.37m after the exceptional item – a fixed price Unix contract for British Telecom International – having lost UKP2.52m in the first half, and the closing order book is 32% higher than a year ago at UKP16.2m perhaps that turnover figure will start to climb again this fiscal. An important element of the move to open systems is that one piece of the heritage of the recent past is being maintained and emphasised: in the early 1980s, ITL worked out how to put together simple fault-tolerant systems cheaply, now it hopes to major on a fault-tolerant version of Unix. The transition to Unix systems was never going to be a painless one, because as soon as such a strategy is announced, sales of the proprietary systems plummet while the take-up of the new ones is necessarily slow. But the company does have another leg in the shape of its network systems business – 15% of the total at the time of its flotation, it represented 24% or about UKP7.5m last year, up from 20% the year before, which implies a 20% growth rate. The other problem on the Unix front is that ITL doesn’t yet have its own machine: its in-house fault-tolerant Unix system will not be announced until sometime in the fourth quarter of 1989, and in the meantime it is having to get by on bought-in systems which give a very low return for a manufacturer because ITL doesn’t get the margins it would on kit it makes itself, and Unix systems are intrisnically lower margin because the business is so competitive.
