Bull plans to recruit a technology company as a major shareholder to boost its emerging smartcard and software businesses.
In an exclusive interview with Computing, Bull chief executive Guy de Panafieu reaffirmed his commitment to a 'triangular' strategy of servers, services and leading edge technologies such as smartcards.
Bull saw a decline last year in its market share in both European server sales and UK software and services. Investment in Bull's proprietary GCOS platform will continue, but "the customer base will not develop."
GCOS 7 will be ported to Intel's 64-bit architecture in 2001, while GCOS 8 will continue using Bull's Cmos proprietary architecture.
The French state, which still owns 17 per cent of Bull, will sell its stake to the new partner. Bull already has a clutch of other industrial shareholders: NEC, Motorola and France Telecom together own 52 per cent of the company.
De Panafieu indicated that he would like a partner to support Bull's fast-growing, but still small, smartcard and software business. Despite developing the first smartcard in the 1970s, the company's current position at "number three or four" in the smartcard market represents a "missed opportunity." He expects the new lines of business to account for 20 per cent of the company's revenue in 2002 - double the current proportion, while the slower growing server business will drop from 45 per cent to 30 per cent.
Figures from analyst Dataquest suggest that Bull is losing ground in the European market. Its 1998 server market share was 2.6 per cent, down from 3.5 per cent in 1996, placing it sixth overall. Services, targeted to form 50 per cent of revenues by 2002, will become the most significant portion of the business.
Unlike rival ICL, which is divesting all its hardware and software interests, Bull believes that its services offerings are made credible because it retains technology expertise.
De Panafieu admitted this means that Bull services are not fully vendor-independent. "The services are targeted to sell Bull products, but we will not act against a customer's interests to do so," he said.
Anthony Miller, researcher at financial analyst Richard Holway, questioned Bull's focus and aggression in the UK services market.
By Holway's measures, the company has fallen from 14th to 21st place over the last year. Dismissing his critics, de Panafieu said it was not time to contemplate breaking up the company to focus on services. "That's not in the interests of our major shareholders," he said.
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