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Intergraph counter-attacks low-cost Intel workstations with fab deal

Small, perfectly-formed workstation designer meets manufacturing giant, goes after commoditisers?

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Embattled workstation company Intergraph is pulling out of manufacturing, outsourcing production to computer industry manufacturing specialist SCI. The 300 Intergraph employees involved in building workstations will be offered jobs at SCI, but we think this is an aggressive move, not a defensive one. Intergraph's core competences are in workstation design, but it's threatened by Intel's move into the workstation market, and by the number of broad-range PC manufacturers charging into the field, most of them on the back of Intel's design efforts (and Intel, to some extent, on the back of HP's). Intergraph has an antitrust suit against Intel outstanding, claiming Intel tried to blackmail key workstation technologies out of it. But whatever the outcome of that suit, Intergraph is still going to face a combination of commodity workstation designs and mass manufacturing - all of the big PC companies are going to be coming for it. SCI will take on the Intergraph in-house manufacturing business, and will also wind up taking on the outsourced Intergraph manufacturing other companies currently do. Intergraph can concentrate on design, while SCI, which is a very large manufacturing outfit, will pick up workstation expertise. Strangely enough, both companies are headquartered in Huntsville, Alabama, so close co-operation is logical. But to what end? The double act could produce volumes and price levels that would help Intergraph respond to the assaults from the PC companies, and there seems to be more to the deal than just SCI building what Intergraph currently builds. "SCI is very enthusiastic over prospects of this new partnership. The respective strengths of SCI and Intergraph make this a leveraged combination that should significantly contribute to the future success of both companies," said SCI president Eugene Sapp (our italics). Significant, no? ® Click for more stories

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