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Don’t’ Mention the Penguin

Linux and Unisys don’t sit easily together in conversation and over lunch with Brian Hadfield, the Unisys (UK) Managing Director, I was told that it would be a ‘Cold day in hell’ before Unisys, the ‘Big Iron; company with its ES7000, would consider Linux as being a suitable platform for the heaviest Enterprise applications.

Unisys is very much wedded to the concept of the Windows Mainframe and approximately 20% of its UK revenue comes from hardware sales. However, with 74% of total 2001 company revenues coming from services, its business focus as smaller rival to the likes of IBM’s Global Services is clear.

Where both Sun and IBM might agree that Linux is ready for the big time, Hadfield doesn’t buy the Linux story and doubts that IBM at least, would ever seriously consider offering Linux to its larger customers as a serious ‘Top of the Enterprise’ solution. Edge of the Enterprise, maybe, which is Sun’s side of the argument but Linux, he feels, requires “more stability, more influence and more control” before Unisys could regard it seriously in the customer environments in which it works.

But with IBM having just bought PWC and Hewlett Packard having merged with Compaq, surely Unisys must be feeling like the ham in the proverbial sandwich? Hadfield, who is an able politician, admits that Unisys has to watch its giant rivals very closely but insists that the company has a high-end value proposition which gives it room for profitable co-existence and competition in both the services and the hardware business with the big three, IBM, Hewlett Packard and Sun Microsystems.

One are, where Hadfield believes that Unisys can make a strong contribution, is in the development of the public sector. Reflecting this last week’s coverage on failing and costly government IT projects, he feels that Unisys experience with large IT projects can go a long way towards helping the public sector understand why such projects can fail and how to avoid the processes which lead to failure.

So, marks out of ten for Unisys? It’s a company I know well because of the work we did together on ASP and the datacenter hosting business. For them, as for many others, the ASP super-highway represented a very expensive dead-end and the company learned some hard and useful lessons as a consequence.

Going forward, Unisys has a great deal to recommend it, a powerful grip on the financial and transportation sectors, good management, experience and an impressive hardware platform in the shape of the ES7000. But regardless of the margins that Unisys hardware represents at a time of declining services revenue everywhere, I have to wonder how long the company could stay in the hardware business if the three largest Server gorillas start a price war.

I believe that ultimately Unisys real future must lie in the provision of highly specialised managed services and consultancy but time and the success of the Windows Mainframe in the Datacentrer may yet prove me wrong


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