One and one makes one

Fujitsu Siemens Computers is a relatively new player in the corporate market, though its parents have a well-regarded pedigree....

Fujitsu Siemens Computers is a relatively new player in the corporate market, though its parents have a well-regarded pedigree. Joy Macknight gives chapter and verse on its background, products, and performance and plans.

Three days enjoying the Royal Ascot races is an ideal way to have a company fete, as international channel partners, customers and employees of Fujitsu Siemens (FS) Computers discovered in mid-June. Over 850 people sipped cocktails, talked shop and took part in a horse racing competition, mimicking the core values of FS Computers: fun, innovation and speed.

Born out of the union between two electronic giants, Siemens of Germany and Fujitsu of Japan, worth approximately $70bn each, FS Computers amalgamated the computer divisions of the two parent companies and became a separate entity that focussed solely on IT. The new joint venture is part of a global co-operation agreement between the parent companies incorporated in July 1999. Launched on 1 October of the same year, the company is privately held by Siemens and Fujitsu, each with a 50% share. "It is not listed on the stock market so does not feel the quarterly pressures like companies in the US, which have to account to stock holders," commented Mel Taylor, UK's marketing director.

FS Computers operates in 25 countries across Europe, the Middle East and Africa. Its main operations are in Germany, France, Italy, and the UK. The world head office is located in the Hague, Netherlands, but many headquarter personnel are based at Bracknell, Berkshire. Taylor said: "Many head office staff are located in Bracknell, because the UK market is the second biggest in Europe. We are sensitive to the fact that we don't want to be seen as either a German or Japanese company, but fully European." FS employs 7000 people in total, 220 of whom are in the UK.

The company's main areas of expertise are 'mobility' and business computing, which it views as the key drivers of the e-business and Internet age. "Our definition of mobility is user mobility," said Paul A. Stodden, chief executive officer and president. "A wide range of devices, from PCs to handhelds, give the user 24x7 access to the required applications and services available on business critical systems." The Gartner Group predicts that by 2003, 40% of all salaried employees will be spending half their working time away from the office.

Biggest success
FS products span a range of personal computing and enterprise computing needs, from Unix and Intel servers to mainframes, business and consumer PCs, notebook computers, plus storage solutions. "The biggest success this year, in terms of revenues, is the Primepower solutions. The fastest market share growth is in mobile products, while the largest sales by volume is business PCs," commented Taylor. Primepower enterprise servers are Sparc/Solaris based, which Gartner found "are currently the most scaleable SMP-like Unix servers available, supporting up to 128-way configurations."

FS Computers has refused to join the price war on retail and consumer PCs, and claims its focus on mobility and business critical computing is paying off. It claims laptop sales increased 14% and server sales to businesses increased by 45% over second quarter results from last year. It doesn't expect to be as affected by the downturn in European IT spending as US rivals, because it has spent the last two years restructuring operations, controlling costs and developing new business processes.

The components for the products are made in Japan and Taiwan, but are transported to Germany for assembly. Factories in Augsburg assemble professional PCs and Intel servers, while production plants in Paderborn and Sommerda produce Unix servers and consumer PCs, respectively. FS has invested £18.5m in its production facilities.

Research and development is done in-house, but FS Computers also benefits from Fujitsu and Siemens independently which, between the two, spend £4.2bn on r&d per year. Over the next three years, FS has earmarked over £460m to invest in the two core initiatives, mobility and business critical computing. More than 1,300 engineers and developers have been assigned to work on these developments.

Intel, Microsoft, Oracle, EMC, and SAP are the main partners for FS Computers, but it has over 1,400 software partners and 2,000 sales partners in 100,000 different locations. The company is a member of the Bluetooth Special Interest Group which features more than 2,400 adopter companies and is driving the development of Bluetooth, a cable-replacement technology set to come out commercially in bulk in 2002. Bluetooth is a standard for a small, cheap radio chip which takes the information normally carried by a cable, and transmits it at a special frequency to a receiver Bluetooth chip, which will then give the information received to the computer or phone, etc.

Why is FS convinced that Bluetooth will be big? "It will catch on because of ease of use. Bluetooth technology enables cableless communication between machines, thereby reducing clutter in the office. It is qualitatively different than the wireless products today," claimed Taylor. "Bluetooth will only take off with wide acceptance. This is starting to happen, for now every supplier is putting it in its products."

The main markets that FS Computers is involved in are government, finance and telco arenas, education, health, media, and retail. In the UK, its main customers are British Telecom, Nationwide Building Society, RAC, Transco and Tesco. For example, BT is using Lifebooks as part of a wider mobility solution including mobile phones and PDAs for top sales staff; and Transco is using Scenic xS small footprint PCs across the country to support hot-desking with smart card access to personal data and applications. FS Computer's UK business focus is on developing enterprise business and sales to SME customers with a clear commitment to channel sales.

What is FS's unique selling point? Taylor explained: "We have a mainframe heritage that we are bringing to the total IT market. We are the only mainframe company that offers Intel and Solaris platforms. Our competitors aren't doing this." FS Computers provide the hardware, while services are provided by Siemens Business Services, ICL for Fujitsu, and Computer Centre in the UK. FS Computers' hands are slightly tied by not being able to sell services that would compete against products of the parent companies.

The results from the financial year 1 April 2000 to 31 March 2001 have just come in and FS is looking at £3.8bn in revenue, with the UK producing £185m of that amount. FS says it is still on target to turn a loss of £44m for its last fiscal year to March into a profit. It eked out a small profit in the first quarter to the end of June on revenue that increased 3% to £730m.

Boxtext: under starter's orders
FS Computers took the opportunity at Ascot to strengthen its ties with partners, promoting speeches from Intel, EMC and Oracle representatives, to introduce the new managing director for UK and Ireland, Andrew Downing, and to push forward its strategy of mobility and business critical computing with a series of launches throughout June and July:

S-4572, the most powerful S series notebook to date will, claims FS, enable busy mobile professionals ('warriors') to watch DVDs and save data to CD whilst on the move, saving time and facilitating greater information sharing.

The industry's first notebook PC with fully integrated Bluetooth capability, Lifebook B-Series B2547, available from July 2001. The initial target applications include synchronisation, file transfer, NetMeeting support and as a wireless access point to LAN, Internet and ISDN services.

An Enhanced System Capacity on Demand (Escod) solution for its high-end Solaris/Spar-based Primepower servers and storage solutions.

The Primergy N4000 four-way server and a dual processor Celsius 880 workstation - the company's first products based on the new Intel Itanium processor available from July 2001.

Primepower 2000 a 128-way Solaris/Sparc based server offering increased scalability and high performance Sparc 64 processors

Last month: CentriStor Open, a virtual tape library, enhanced to connect to Unix and Windows NT/2000 systems

October: UK launch of easySan which provides customers with easy access to San technology through an integrated server and storage solution in a rack.

Read more on Data centre hardware