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Unisys, Data General ripe for takeover

Unisys, Data General ripe for takeover

Unisys and Data General are the two server manufacturers most likely to be acquired this year, according to Jay Bretzmann, vice president of worldwide systems for research company IDC.

Bretzmann said he expects about half the companies currently involved in the server market to ultimately disappear through industry consolidation, with Unisys and Data General heading the list.

"These are two vendors whose business models are relatively weak and who have low market capitalisation, but who have some excellent assets which would be a benefit to any acquirer," he said.

Bretzmann said that the prize for acquiring Data General would be its Clariion storage business, while Unisys has excellent proprietary server software, a good professional services operation, and a strong presence in key vertical markets such as banking and transportation.

Companies looking to prosper in the server market would have to choose between two very different business models -- the value model for enterprise servers or the volume model for small business servers, Bretzmann said.

"These are different markets where different attributes are needed to win," he said. "The danger exists for vendors who get stuck in the middle. They will become vulnerable."

Bretzmann said that core competencies required for the value model include the use of advanced processors and clustering software to improve performance and scalability, plus professional services expertise and a qualified direct sales force.

The volume model requires manufacturing efficiencies for standard hardware, good independent software vendor relationships, fast simple service, and a good indirect channel program.


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