Larry Weinbach has a slight problem. Forget that he looks a lot like Leslie Nielsen - the silver-haired guy from Police Squad and the Naked Gun films.
There's something else, and it's even more worrying. He's the chairman and chief executive of Unisys. You can't get much less fashionable unless you don an Afro wig, purple shirt and a kipper tie.
What's wrong with Unisys? Not much at first sight. It's profitable. It's big. The once-crippling debt mountain is now a hillock. It has big, rich, loyal customers. It has dumped unprofitable product lines such as PCs and low-end servers. "We've moved totally out of commodity products. We are not going to be a broad-based technology company," says Weinbach.
Unisys makes good money from its mainframes. Its high-end Windows 2000 servers attract fans such as Compaq, which rebadges them for big customers. The way Weinbach tells it, Unisys has its hardware strategy completely sorted. Leaving aside a weak first half this year, things seem to be motoring along nicely.
And yet... Unisys is not a name to conjure with. It's old-fashioned, it's corporate, it's stuffy, and it's slow to ride exciting waves. "Unisys missed a step in the client/server environment, and therefore it was always looking uphill," says Weinbach. The company's heyday was the 1980s; it's just a few years since it almost went bankrupt. "We are rebuilding the brand. We don't kid ourselves: we have a lot of work to do," Weinbach admits. "We want a more aggressive brand."
An image problem
Unisys has an underlying identity problem to solve. It makes mainframes and high-end Windows NT servers, but it's not a leading hardware maker. It builds robust corporate systems for big clients, yet it's neither a blue-chip consultancy nor a nimble services specialist. It carries too much baggage to be a MarchFirst, a Sema Group - or even an ICL.
And the financial woes never quite go away. Unisys reported a poor first quarter this year, and a profit warning on 29 June sparked a 37 per cent share price fall - a meltdown better suited to an overpriced dotcom than a lumbering Old Economy giant.
Weinbach struggles bravely to pluck virtue from necessity, claiming that expertise in hardware design gives Unisys a competitive edge in selling its software and services. "Pure services companies don't have the capability to understand how the technology actually works and how it becomes more scalable," he says.
Hmm. Is he right to say that "technology is a nice word for hardware" and that Unisys's hardware engineering skills "enable us to design solutions better than pure services companies"? I have my doubts.
But maybe there's hope. Unisys shares a problem with its big clients: both sides simply have to get their heads around the New Economy, and squash the swarm of dotcom bugs that are starting to suck their blood. But they can't overlook their traditional customer base in the process. Unisys knows how these guys feel - and that empathy could be handy.
Here's the new mission: to be cheerleader and preferred supplier to the clicks and mortar crowd. Weinbach is telling his clients that they - and he - can crush the web guys for two good reasons.
Those Old Economy firms have great brands - and mountains of cash, too. They're also more experienced at building robust transaction-processing and fulfilment machines. "Bricks and mortar companies have what it takes, as opposed to some of the startups who don't have the back-end capability," Weinbach says.
With the once-notorious debt under control and cashflow back from the dead, Weinbach thinks Unisys can really rock. He's getting into innovative - and expensive - risk-sharing and outsourcing deals with clients, hoping to take Unisys closer to the heart of its customers' businesses. "We've been able to play in markets that we weren't able to play in before, because it requires money," he says. "When I arrived here, if you had a deal that was cash negative in the first year, we walked away from it. We didn't have the cash."
The ultimate Old Economy brand wouldn't say no to startups knocking on its door. And some actually do come knocking. Quip, for example, a startup with a staff of 20 offering cheap telephony using web-based customer service technologies. Quip paid Unisys to build its IT infrastructure, and indeed sold a chunk of its shares to the company.
Really, though, in its heart of hearts, Unisys just wants to hoover up business from those bricks and mortar giants, fighting off the pure-play internet guys. But, hey, what's the problem? That's a pretty good potential client base, and one that Unisys knows well.
Who knows? It might just work.
- Unisys is profitable, and big. It made $501m net profit on sales of $7.5bn in 1999.
- Long-term debt is finally under control. It's down from $2.3bn in 1996 to $600m this April.
- Sales are projected to grow by 13 per cent to 14 per cent annually over the next three years. Services are expected to grow faster - by 15 per cent a year.
- Hardware development focuses on Intel-based mainframes and powerful Windows 2000 servers.
- Sales folk target five main vertical markets: financial, government, communications, transport and publishing.
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