Siemens seeks out global agreements
German vendor outlines plans. Naomi Jackson reports from Berlin.
Siemens is looking to sew up key partnership deals across itsin. business units over the next few months, following its structural revamp late last year.
Dr Volker Jung, a member of Siemens' corporate executive committee, said it was too early during the company's pre-CeBit briefing last week to announce who the partners would be, but added that the deals would be designed to increase Siemens' profile worldwide, particularly in the services market.
He refused to rule out the possibility that Siemens could also make an acquisition. 'We can see that companies are far overvalued, but this will not last forever,' he said.
In a thinly veiled broadside at Lucent's recent purchase of Ascend Communications, Jung added: 'To me, it doesn't make sense to buy a company for $20 billion which has turnover of $1.6 billion and a loss of more than $200 million.'
In October 1998, Siemens re-structured into three business units (PC Dealer, 7 October 1998) under the Information and Communications (I&C) banner. The Information and Communications Networking (ICN) unit provides networking product and integration systems, while the Information and Communications Products (ICP) arm is responsible for Siemens' other products, ranging from mobile phones to retail systems, servers and PCs.
The third unit, Siemens Business Services (SBS), provides value-added systems and business process outsourcing (BPO) services to five target sectors: the Siemens group itself; industry; the financial services sector; public sector; and telecoms, utilities and transportation companies.
It is in SBS' business that Jung indicated partnerships would be most critical. 'Despite our growing success with SBS, we are still far too focused in Europe,' he said. 'So we are planning partnerships to achieve a more global presence.'
According to Jung, each of Siemens' business units are being encouraged to operate independently, which means SBS will source product from whichever vendor offers the best system.
'This will hopefully be one of our units, but it is not mandatory,' he said. Nevertheless, he claimed that SBS will benefit from its ability to leverage ICN and ICP when required. 'The competitive edge SBS has is that it can benefit from the technical know-how and partnerships of the other Siemens' groups.'
GEARING UP FOR THE ARRIVAL OF MERCED
Siemens has begun consolidating its server products in preparation for the expected delivery of the Merced chip next year.
The company has committed to migrate its entire range - encompassing all Primergy Windows NT-based servers, RM Unix servers and BS 2000/OSD mainframes - to Intel's 64-bit platform by 2008. It will also phase out its own Reliant operating system and instead deliver Unix boxes with a choice of Sun Solaris and another as-yet undetermined version.
Joseph Rager, director of enterprise computing at Siemens, said: 'Software developers will only support three operating systems in the future and one of those is Windows NT, which means there will be consolidation down to two Unix flavours. We're realistic enough to know that Reliant will not be one of those two.'
However, it will continue to develop the operating system until at least 2002, according to Rager.
The SAP/Siemens Competence Centre has developed a mainframe that runs the Unix version of R/3 natively. IBM already offers a version of the S/390 mainframe with R/3, but Rager claims it only runs on a DB/2 database, when 80 per cent of users prefer Oracle.