Unisys needs to expand, says analyst

By RICHARD PAMATATAU

Unisys New Zealand needs to consider acquisition or sharp strategic partnerships if it is to bolster its position against tough competitors such as IBM and Hewlett-Packard, says a local IT analyst.

Dinesh Kumar, managing director of industry research company IDC, said Unisys had to get bigger and increase its strength to give it an edge in the IT market.

Kumar was commenting on Unisys' profit announcement of $5.1 million for the year ending December 31, almost 50 per cent down on the previous year.

Revenue slumped as well by almost $20 million from $161 million in 2002 to $144 million last year.

It was in a similar position to Fujitsu, he said, which also needed to look at acquisitions.

Kumar said a number of companies were for sale locally.

Sydney-based Mike Ettling, Unisys New Zealand and Australia managing director, said the company was in good health and the profit fall was because of fewer big hardware deals last year.

The big wins in the hardware space in 2002 gave the company's figures a boost that year.

He said 86 per cent of the company revenue in New Zealand came from services.

That was split into 18 per cent for systems integration, 44 per cent in outsourcing and 24 per cent in network infrastructure related services. The remaining 14 per cent came from hardware sales.

Unisys could match any of its competitors in the big iron area, said Ettling, especially in the "big Windows" area where it was up against gear from HP and Sun Microsystems.

Ettling has been in the hot seat for three months and joined the company from British-listed firm Synstar, which offered a range of technology outsourcing services.

Before that Ettling, a South African, worked for EDS UK.

Among Unisys' customers in New Zealand are the Ministry of Social Development, ACC, AA, Westpac, ASB Bank, Vodafone, Placemakers, Foodstuffs and Telecom.

It recently lost a flagship customer - TSB Bank - which for a long time had been a reference site for Unisys on a global basis.

TSB ran its entire systems on Unisys kit that spanned from Clearpath mainframes to storage and imaging systems.

TSB defected to IBM because it offered more powerful machines that were cheaper to buy and operate.

Ettling said Unisys had launched a high-end consulting service that let it examine a business or organisation and create an information systems strategy based on needs and strategic direction.

He said the service was important for chief executives who wanted to know how IT fitted in with their business architecture, and for chief information officers who had to find "business relevance for IT".

Unisys has about 650 staff in New Zealand and says numbers are stable. It is recruiting about 10 graduates a year.