Unisys Corp chairman and CEO Larry Weinbach says the company is staging a comeback. He says that with the company’s burden of debt under control and revenue rising again, it is now aiming to generate 30% of sales from hosting company’s outsourced IT requirements. He expects the figure to be at 25% by 2002. Weinbach told a Merrill Lynch & Co-hosted conference that the company is not trying to emulate IBM Corp and be all things to all people but is focused on some specific competencies such as Windows NT services and outsourcing for medium-sized companies.
The company is focused on six markets and technology sectors; systems integration; NT, e-business, outsourcing, network services and maintenance. It has eliminated PC and low-end server manufacturing – it will outsource productions of some $200m of this equipment in 1999, around $300m less than it would have sold with its PC operation intact. Weinbach says 30% of network services sales are to new customers; 17% of ClearPath server sales and 30% of its repeatable solutions. The latter are made up of technology available off-the-shelf – typically 70% – plus custom development and integration.
It is the network services and business process outsourcing markets that are growing fastest in the services sector, Weinbach says. Indeed Europe is stronger on business process outsourcing than the US and is in many ways influencing the US market, he says. For e-business customers, Unisys is offering a variety of revenue models, including payment up front or payment by transaction or hybrid models. It expects some customers to hold off going online until the Y2K hurdle has been cleared, although it isn’t holding back equipment purchases, Weinbach claims.
Weinbach says engineers it hired from NASA have been responsible for enabling it to develop NT systems that operate as a mainframe platform with all of the incumbent middleware functionality. NT is an open platform, said Weinbach, Unix is not open, Linux is new and unscalable. Java is owned by a single company. NT is now a wider platform than just Microsoft, Weinbach explained, his reason for believing that the Department of Justice will not break up Microsoft under any settlement in its antitrust trial which resumed this week.
Unisys has new high-end ClearPath server technology in the pipe and has been at the forefront of driving NT into the high-end with its 10-way Aquanta ES. It’s new CMP cellular multiprocessing cross-bar interconnect architecture is on the runway too, essentially a follow-on architecture for the Scalable Coherent Memory bus used in ClearPath and other servers.
Debt has dropped from $2.3bn in 1996 to $1.7bn in 1997 and $1.1bn in March 1999. Weinbach’s been on board since September 1997. Revenue was flat at $6.4bn in 1996, rose 4% in 1997 to $6.6bn and climbed 9% in 1998 to $7.2bn. Goals for the services business are to grow revenue at 14% to 15% through 2002 and gross profit by 26% to 27%. Technology goals are to grow revenue by 6% to 8% a year and gross profit by 40% to 42%. It expects to hire 6,500 staff this year.
