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January 21, 1988


By CBR Staff Writer

Following the Japanese market leader’s settlement with IBM that gives it privileged access to the code of IBM’s MVS operating system, Fujitsu Ltd president Takuma Yamamoto has reportedly proposed to Mitsubishi Corp that it become a distributor for Fujitsu’s mainframes in the US. In a piece of blatant sophistry, it is argued that the Fujitsu M series machines, which would not bear the Mitsubishi logo, would not pose any threat to the business of Fujitsu’s 46%-owned Amdahl Corp because they would be offered not with MVS but with Fujitsu’s proprietary OSIV family of rewrites of the IBM operating system. Mitsubishi – only a corporate relative of Mitsubishi Electric – has an interest in the computer industry through its Mitsubishi Office Machinery subsidiary, which distributes most Fujitsu machines, from the PC9450 through the K series to the M-series mainframes in Japan. Any such move would threaten to hit IBM hard, because the company’s strategy is to grow software revenues at a much faster rate than its business as a whole, and Mitsubishi would have to compete strongly on the price of operating to make any mark in the US. That in turn would force IBM to rein back its planned software price increases, which far outrun inflation. In 1987, IBM grew just 5.8% overall, but its Program Products revenues grew 29% to $2,283m.

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