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February 10, 1997updated 05 Sep 2016 1:01pm

SIEMENS SEEKS PARTNER FOR NIXDORF: ONLY NEC FITS BILL

By CBR Staff Writer

While Siemens AG’s finance chief Karl-Hermann Baumann was telling Reuters that businesses needed to generate a 15% return on capital to feel secure within the Siemens fold – something that Siemens Nixdorf Informationssysteme has manifestly never managed to do – on one side of the world (CI No 3,095), back home in Munich, the company’s chairman Heinrich von Pierer was telling Der Spiegel that Siemens was considering looking for a partner to help boost profitability at the Siemens Nixdorf computer unit. He confirmed that Nixdorf was one of the units facing a profitability review, and said that as part of a group-wide portfolio review, Siemens Nixdorf would face the questions Are we big enough? Are we fast enough? Or do we need further co- operation? he said. If a partner is to be sought for Siemens Nixdorf, the obvious candidate would be Fujitsu Ltd, which has deep and long-standing ties with Siemens, were it not for the fact that the product lines are in total conflict. Fujitsu and its allies are firmly in the Sparc camp where Siemens Nixdorf is a confirmed R-series and Pentium Pro adherent. The two biggest US MIPS Technologies Inc adherents are of course the MIPS owner, Silicon Graphics Inc, and Tandem Computers Inc, but each is considerably smaller than Siemens Nixdorf (and thus could be acquisition candidates were it not the message from Siemens that it wants to get someone to share the burden, not put good money after bad). With excruciating irony, the one really substantial MIPS adherent – and therefore the ideal partner for Nixdorf – is of course NEC Corp. The irony is that NEC was to have achieved its European destiny by taking control of Compagnie des Machines Bull SA, its long-time mainframe partner and the company that off-loaded its failing Zenith Data Systems personal computer unit onto NEC. But the French government’s diktat that Bull – which had used the MIPS chips – must take IBM Corp as its open systems partner and join the PowerPC camp means that there is no commonality between the Bull and NEC open systems lines. But there is regular wishmaking about the remaining European manufacturers getting closer together, so the fact that NEC is an investor in Bull does not preclude it from becoming a major investor in Siemens Nixdorf, and now that it has merged its US personal computer interests with Zenith and the large but weak Packard Bell Electronics Inc, it might welcome being allied in Europe with the rather stronger Siemens Nixdorf personal computer business. Siemens and Pyramid Technology Corp clustering technology might in turn be of value to NEC in Japan, so that if compatibility of product line is the main determinant – as it surely has to be – for Siemens, it is NEC or nothing.

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