Fujitsu Siemens banks on *nix, mobile and the channel

CEO rules out Sun bid, dismisses SCO lawsuit

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Fujitsu Siemens says it is outperforming competitors in a declining IT market by improving internal efficiency and committing to training its channel partners.

A focus on the company's mobility and server products helped Fujitsu Siemens Computers to grow first quarter UK sales by 13 per cent in a market which declined by 2 per cent, Fujitsu Siemens Computers' CEO Adrian v. Hammerstein, told journalists at a lunchtime briefing in London last week. Against a backdrop of 2.4 per cent market delcine in Western Europe, Fujitsu Siemens Computers achieved a revenue growth of 5.7 per cent year in the PC and Intel-based server segments, according to figures from IDC for Q1 2003.

Last month the company recorded a profit before tax of €8 million for its 02/03 financial year even as revenues declined from €5,434 million to €5,337 million.

According to Hammerstein, Fujitsu Siemens improved its bottom line by reducing operating expenses by 11 per cent. Some of the savings have come from implementing system from Siebel, SAP and i2, which enabled the company to reduce inventory and obtain payments more quickly from customers. Savings have also come from job cuts. The company is towards the end of a restructuring programme which will reduce its headcount from 9,000 to 7,100 by the end of September.

Fujitsu Siemens is also seeing results from quadrupling the investment in training it delivers to its channel partners.

Looking ahead, Hammerstein expects recovery in the IT market will be slower than expected. "We see no convincing signals of an upswing. We're not expecting a second half upturn and we're planning on a guarded basis."

He said the company can continue to outperform the market by concentrating on its sweet spots - mobile (read Centrino-powered laptops and PDAs), Intel and Unix servers.

Hammerstein reiterated the belief that Linux and Solaris will co-exist - unlike IBM, Fujitsu Siemens sees Linux as a pure Intel server play. He downplays the possible impact SCO Unix/Linux ownership lawsuit.

"We don't think it's going to go anywhere," he said.

Fujitsu has a project to develop a "mainframe class" Intel server with 128 processors running Windows and Linux, but Hammerstein describes this as a project for somewhere between 2005-2007. The timing is contingent on when ISVs come on board.

Fujitsu Siemens expects Solaris to be around for a long time chiefly because its ISV attractiveness is "second to none".

"Fujitsu has a SPARC roadmap and is committed to innovate new systems and processes. Sales are not slowing down," Hammerstein commented.

After recent speculation that Sun Microsystems might soon be put up for sale and Fujitsu might be a likely suitor, Hammerstein was asked if Fujitsu could be tempted to table a bid.

"No," was Hammerstein's commendably brief response. "I'm not a big friend of large acquisitions, particularly in the IT sector. Not many are successful over time. It's high risk, and not one which we want to entertain". ®

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