On-line finance craze boost for Tandem

By Adam Gifford

A huge increase in the number of electronic financial transactions required for daily life is driving sales of computer systems designed to work around the clock, seven days a week, without falling over.

A big beneficiary of that is Compaq's Tandem division, which last quarter recorded growth of 14 per cent compared with the previous year.

Bill Heil, Compaq vice-president with responsibility for Tandem, said the growth, almost 50 per cent above the market average of 10 per cent, showed the 18-month old merger between the two companies was paying off.

Compaq bought Tandem in August 1997 for $US4.1 billion as part of its move into enterprise computing, supplying the systems which keep the large corporates running.

Mr Heil was in New Zealand to assure customers of Compaq's commitment to the technology, which includes the Himalaya Server line running an operating system called the Non Stop Kernel.

Tandem has a strong presence in New Zealand in the stock exchange, banks and financial markets.

Mr Heil said the number of eft-pos transactions per person in New Zealand was staggering, and was a sign of things to come around the world.

"Everyone wants to do business, around the clock, on-line.

"What do you need to run in the Internet world is something that is reliable and something that can start small and grow."

A key industry measurement is cost per transaction.

"We are driving that down 28 to 30 per cent a year. That's all costs, the application development, the operations costs, capital costs," Mr Heil said.

Over the past year the number of cellular phone subscribers supported by applications running on Tandem Systems has risen threefold from 20 million to 60 million. Volumes of transactions on stock exchanges are also rising, driven in part by the performance of the Internet or .com shares on the Nasdaq index of high-tech stocks.

Compaq has already announced plans to move Himalaya servers from the current MIPS chips to the EV7 version of the Alpha chip, which is due in 2001.

"That gives a 10-year life for the Himalaya."

Compaq's enterprise strategy is to be the number one Internet solutions provider based on industry standards.

"For Tandem, the new business comes with e-commerce. It's huge. I don't know of a single Internet provider who doesn't want more scalability and reliability.

"That leads to large scale data warehousing. People want enormous amounts of mining of information. Internet providers, when you click around those sites, want to advertise to you. Some providers have a billion Web addresses to mine through and find who goes where and serve up better ads."

He said telephone company applications were another growth sector.

"Switch providers want more programmability in their switches. Take the Non Stop technology from Compaq and put it in a phone switch and you get a good coupling of cost performance and robustness."

In financial services, Compaq is developing new banking solutions such as Web ATM.

"We are taking existing ATM [automatic teller machine] networks and web-enabling them so, instead of having a banking interface with money going out and several buttons to press, it's an opportunity to sell customers tickets to a show or on-line access to more banking products.

"If banks don't do it, someone on the Internet will do it to them."