HONEYWELL Bull has gone and in its place has come Bull HN Information
Services. However the ramifications extend far, far beyond the usual
implications of a name change and the success that Groupe Bull has as
ultimate controller of the computer group's destiny will be watched
extremely closely by competitors, customers and the world's major
marketing and advertising companies at a time when the computing
industry moves into its third stage of development.
The question is why drop a name as well renowned as Honeywell which
has operated at Newhouse for the last quarter century as one of the
group's 12 computer manufacturing plants.
The answer is that Groupe Bull, which is 92% owned by the French
government, now has a 65% holding in the consortium after Honeywell in
December reduced its holding from 42.5% to under 20% with NEC of Japan
in with another 15%.
The bringing together of this new grouping and of Groupe Bull, which
is strongest in its home territory, creates probably the ninth largest
computer company in the world with all the usual benefits expected from
marketing, technology and manufacturing efficiencies.
At the beginning of this month in Boston, Massachusetts, Bull HN with
annual sales of $2000m (#1150m) announced a $20m marketing campaign to
establish its name in the US consciousness.
Its success under the Honeywell logo had been outstanding despite
Honeywell itself having moved out of computing to concentrate more on
its control business. That is exemplified by the Newhouse situation
where the site is divided so that Honeywell (controls) and Honeywell
Bull are quite separate organisations.
US Honeywell retains its holding in the new company to enable sales to
take place with the US government. General Electric Aircraft Engines of
Cincinnati has a major Honeywell computer installation which has
developed into a harmonious working relationship. GE is fairly adamant
that the relationship would continue as it had nothing but praise for
the systems although when pressed on the security side for military
applications, a company spokesman was perhaps a touch hesitant about the
longer term.
The reorganisation is taking place as computer industry customers face
the problem of being perplexed by complexity. The first phase in the
1970's was when the emphasis was on hardware and the building of bigger
and better machines. That was succeeded earlier this decade by the
greater concentration upon software and systems. But now it is the
access to data and its interpretation that matters and where the
development expenditure will take place. And it is where Bull HN reckons
it has a significant global role to play.
The Newhouse operation is the smallest of the Bull HN manufacturing
units although it is the most efficient within the group whether
measured by costs or the speed at which it can complete orders either
for its large mainframe DPS 8000 series or the smaller DPS 6 range.
At present, all product development is created in the US although
managing director George McNeil says that outside help is used to
improve efficiencies at Newhouse and cites the Times Ten factor where in
the past decade everything has been reduced by a factor of ten whether
in the size of components or the number of people required to build a
unit.
At Newhouse, labour accounts for an almost marginal 8% of production
costs so that is little problem in carrying people during the inevitable
seasonal sales and production variations. As a result, employee numbers
are stable with little disruption unlike the sometimes stormy days of
the 1970's.
Despite protestations elsewhere, Bull HN is an enthusiastic supporter
of the poll tax. By last December,there were 40 local authority
customers signed up including Stratchclyde and the Western Isles
although some of the orders will have to be met by importing #20m of
product from Groupe Bull in France. Other major customers include the
Grampian Police. That force used the AIMS action and information systems
configuration in the Piper Alpha disaster to help coordinate the rescue
services.
More recently, Lothian & Borders Police signed up for a #4.2m system
covering anything from major enquiries, to secure telex and message
switching as well as more routine matters such as firearms and shotgun
licensing.
Mr McNeil says that Newhouse has one major advantage compared with
other local manufacturers in that it is not only a build to order plant
and so there is no need to have working capital tied up in stocks but
also one with a remarkably short lead time even for the Large DPS 8000
mainframe which can be installed within eight weeks of the signing of
the sales contract.
The Scottish factory supplies the UK market and also Eire and Italy.
Inevitably it will find it aiming its production towards four defined
areas as a result of the strategic plan that has been evolving over the
last few months. These are government and local authorities,
manufacturing, finance and insurance and retail and distribution. That
way it is hoped to exploit Bull HN and Groupe Bull system technologies
globally.
But there are many severe challenges ahead. One is perhaps an internal
company matter in that there will be for some time a perceived risk that
Groupe Bull will concentrate more and more of strategic thinking and
original research and development in France -- possibly to the detriment
of Bull HN although the other minority shareholders will oppose any such
development. Another is that in the US and the UK markets, the Honeywell
name is a sellng point on its own whereas the new logo could be at times
misinterpreted.
Perhaps the most important hurdle is that the group has to establish a
particular identity which will help it stand out from the half dozen or
so not disimilarly sized companies. And to that end, it will need
continuing financial investment in cooperating with existing customers
as a selling point to increase market penetration in its chosen areas of
operation.
A proven expertise in a specialist sector should prove more beneficial
than a more broadly based approach. However, having manufacturing units
in various countries does have the benefit of appealing to local
nationalism.
Mr George McNeil
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