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Fujitsu consolidates North American IT operations

Now, how about eating Siemens and Sun?

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Size matters as much as scope in the IT sector, but at the same time, executives like to carve out their own empires within vast conglomerates. Which often means the big IT players have organizational charts that are messier than some of the code they write. Today, the org chart at the North American operations of Fujitsu just got a little simpler.

Perhaps this sets the stage for an even simpler global Fujitsu IT operation - one that buys out the stake Siemens has in the Fujitsu-Siemens partnership and maybe even one that does a Wall Street-style mercy acquisition of Sun Microsystems, one of Fujitsu's key partners in the server racket.

Siemens used to be - when the Fujitsu-Siemens partnership was announced with great fanfare in October 1999. But the Siemens side of the operation has been quiet since the "Kaiser" high-end Sparc64 servers were announced shortly thereafter as the original PrimePower Solaris boxes, which had a substantial amount of German engineering. (Siemens seems to have suffered the same fate as Roebuck at what used to be Sears-Roebuck in retailing, particularly outside of Europe, where only the Fujitsu name is slapped on companies and products).

Fujitsu operates three businesses in North America. Fujitsu Computer Systems sells servers, storage, PCs, laptops, and other IT gear in the United States and Canada. Since the turn of the millennium, Fujitsu has been ramping up its presence in the States in particular, among Solaris shops who needed more oomph than Sun Microsystems could supply with its own UltraSparc boxes.

The second operation that the company has in North America is Fujitsu Consulting, which implements IT hardware and software as well as managing installations for customers. And the third bit is Fujitsu Transactions Solutions, which does retail systems and which has its heritage in the British ICL business from way back when. (Fujitsu had stakes in Amdahl and ICL and acquired both many years ago).

Starting October 1, these three groups will be merged into Fujitsu North America Holding, an accurate name, no doubt, but not the kind of name a $2 billion operation can put into its TV commercials. Farhat Ali will be president and CEO of the new unit.

The Fujitsu conglomerate has 160,000 employees and around $53 billion in sales and sells a variety of IT, telecom, and communications gear as well as consumer electronics.

Which means it can eat Sun Microsystems - which has a market capitalization of just under $6 billion - and hardly get any indigestion. Back in July, there was some talk that Siemens wanted to get out of the PC side of the Fujitsu-Siemens partnership because it needs to cut its payroll, but thus far nothing has happened on that front. But for the right numbers, Fujitsu could probably secure whatever IT assets Siemens has. Fujitsu-Siemens currently is a 50/50 partnership in Europe, with about €6.6 billion in sales in fiscal 2007 and 10,500 employees.

By taking the Siemens IT operations over and acquiring Sun, Fujitsu could simplify its name down to, er, Fujitsu and then it could rationalize all of the overlapping products in these portfolios and position itself as a provider of mainframes and Solaris, Windows, and Linux boxes of all shapes and sizes. It could, in short, become the sizable player that the Fujitsu-Siemens partnership was itself supposed to create.

And while you are at it, Fujitsu, you might as well pick up blade server maker Egenera. ®

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