ICL Plc has been been ringing the changes, not only with boardroom shuffles (CI No 2,125), but with a push towards what it calls more ‘autonomous business groupings’ and a greater emphasis on software and services, the area which accounted for some 60% of UK sales in 1992. In the UK, ICL’s activities are now concentrated in three areas: Commodity Products – the personal computer side of the business, organised through reseller Technology Plc; mainframe-based Industry Solutions; and Cross Industry Services, comprising the Sorbus hardware and software services arm; facilities management company CFM in which ICL has a 75% stake; disaster standby venture Guardian Computer Services; and newly formed ICL Enterprises. ICL Enterprises, in Winnersh, Berkshire, employs 900 staff and is headed by David Berry. Its remit covers consultancy, training, security, education and training, environmental services and applications development.
Ambitous plan
Its ambitious plan is to double its revenue target to UKP250m by 1996. Incorporated into the new group are a number of established businesses that were previously part of ICL’s Associated Services Division. These are Peritas Ltd, the UK’s largest independent training supplier which recently acquired Genus and Protocol; Workplace Technologies Ltd, which designs and installs the power, air conditioning, fire and security systems for offices and computer rooms; Consultancy and Technical Services, which provides systems integration, process engineering, network management and consultancy and which includes the CPS cross-industry services unit; and ICL Secure Systems, formed to design secure network and office systems. The group is also overseeing a number of other major projects. These include the so-called CHOTS programme, the ICL-led partnership currently developing and installing a UKP250m secure office system for the UK Ministry of Defence (CI No 1,863); an electronic news gathering and distribution system for German news agency Deutsche Presse Agentur; a cash dispensing system for the Polish Bank Gdanski (CI No 1,974); Smart Card credits sytem for Merseyside Training and Enterprise Council; and secure system for the UK government. And a New Ventures unit provides business process re-engineering services and software. Its initial specialism will be in resource scheduling systems. This follows ICL’s successful implementation of a departure control system for airline Cathay Pacific (CI No 1,842), and the work it is carrying out for the on-line departure system planned for the Channel Tunnel passenger rail services (CI No 2,016). It will also bid for the contract for the RAF’s Engineering and Logistics System, LITS, with partner Anderson Consulting; and for implementing the UK’s planned National Lottery. ICL now reckons itself to be the second largest supplier in the UK, John Bennett, ICL’s Director of Marketing Support and Communications told the audience at a recent briefing. Despite a 0.8% decline in spending in the UK market, ICL expects its results to reflect 12% revenue growth in the year.
By Lynn Stratton
This is accounted for by a 9% rise in orders; a 5% increase in hardware shipments and 16% increase in software and services including equipment. The company is catching up with IBM UK, Bennett said, pointing to the respective performances of each. These revealed that over the past three years, the UKP700m gap between the two had been reduced to UKP400m to UKP500m. If it can keep up the pace, ICL’s hope is that it could overtake IBM in the UK by 1996. IDC’s comparison of the top ten players in the UK market in 1991 shows IBM with 33.5%; ICL with 20.6%; DEC with 14.2%; Compaq with 5.9%; Unisys and Hewlett-Packard each with 5.4%;; Amstrad with 4.4%; Olivetti with 3.9%; NCR Corp with 3.4%; Hoskyns with 3.2%. But ICL prefers to measure its performance relative to the performance of players like itself and IBM, which compete in both software and hardware. This shows IBM’s market share declining steadily from 19.0% in 1989 to 14.1% in 1991. ICL has meantime seen its share drop from 8.
7% in 1989 to 8.4% in 1990, and duly return to 8.7% in 1991. ICL says this upward trend is continuing and that it has gained another 1% in 1992. ICL’s 1992 software sales in the UK came in UKP10m up on expectations reflecting a hefty 120% increase in Unix software sales, a minor increase in VME mainframe software sales and 50% growth in application software sales – partly achieved via ICL’s expanding third party network. In the light of this success, it will be looking to expand the range of software it offers, particularly for vertical markets, through further software partnerships. Personal computer software looks to be a good money spinner too having grown 200% though from an admittedly small customer base. ICL UK’s July acquisition of personal computer and Unix reseller Technology Plc is also paying dividends. In spite of the ructions that ensued when the announcement was made – namely IBM’s and DEC’s decision to cut Technology off, it managed to double throughput and more in a matter of months and has contributed around 20% of the spoils in ICL UK’s coffers. Relations with DEC are beginning to thaw and a reconciliation is thought likely. Technology has meantime got round the IBM problem by going to its OEM customers such as Bull HN Information Systems, which supplies RS/6000s. Since many customers use a variety of systems Technology is keen to supply as broad a range as possible. It is currently linked with Bull, Hewlett-Packard, Sun and Data General Corp. The distributor is also marketing ICL’s new TechnICL and Zeno personal computers, and the new Ergo collection. Personal computer sales, handled by Technology Plc and newly merged Scandinavian company Nokia Data Systems nearly matched the joint returns from ICL’s mainframe and Unix business. Predictably, mainframes, which accounted for 10% to 11% of total UK revenues, shrunk in 1992, coming in 6% to 7% down on budget.
Areas like Egypt
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This gentle decline is expected to continue. That said, successes were achieved in markets such as health, building societies and local government due to the range of software available. It is hoped too, that 30% to 40% growth in personal computer sales seen for 1993 will offset waning mainframe business. Unix boxes have sold well with DRS 6000 sales up 74% and DRS 3000 up 59% in 1992 and with new business successes in areas like Egypt and Australia. For the second year running, ICL has topped the customer satisfaction ratings in IDC’s European Corporate Attitudes to Unix and Open Systems questionnaire. Another success story has been the collaboration, since 1985, with Ingres. This has resulted in the development of ICL’s Ingres Search Accelerator technology for Unix and Content Addressable File Store systems on VME, and the OSI Ingres/Net product. According to Andrew Roberts, the managing director for ICL’s Mid Range Systems Division, the partnership between ICL and Ingres has resulted in over 20% of DRS servers sold running Ingres, or Ingres-based applications. To crown the achievement, ICL was recently pronounced Ingres Worldwide Business Partner of the Year. It all seems to bode well for 1993 which, John Bennett reckons, should be better than 1992. ICL was ‘cautiously optimistic’ he explained, and was expecting to turn in good although not brilliant – results.
