Unisys pins hopes on new servers
Unisys Corp. last week announced new versions of its mainframe-class ClearPath servers, amid news of a 35% decline in first-quarter profit caused by slow sales of the company's enterprise systems.
The new e-@action ClearPath servers incorporate Unisys' cellular multiprocessing technology, which allows users to mix applications running on Intel Corp. technology with those running on proprietary Unisys processors in a single box.
The goal is to give users a way to continue taking advantage of their existing investments in proprietary Unisys environments while offering a reliable, mainframe-class system for running newer applications, said Kevin McHugh, a vice president at the Blue Bell, Pa.-based company.
For example, a bank that wanted to offer Windows-based Internet services would be able to host it in the same box in which it's running other banking applications based on Unisys' proprietary operating system, making for tighter integration and time-to-market, McHugh said.
"The new systems are a natural evolution for Unisys," said John Phelps, an analyst at Stamford, Conn.-based Gartner Inc.
"It shows their loyal legacy systems clients that [Unisys] hasn't fully gone over to worrying just about Unix and Windows systems," he added. "It gives them upgradability and capabilities for better price performance."
Unisys also introduced a "capacity-on-demand" pricing model based on its ClearPath servers. With it, users will be able to buy more computing capacity than they presently need and pay for it only when it's actually used. The intent is to give users a flexible way to buy extra capacity for unpredictable application demands and sudden emergencies, McHugh said.
Struggling for Market Share
The new servers come at a crucial time for Unisys. The company exited the commodity hardware business last year and has been repositioning itself in the past few years as a services-led operation, although it still gets a chunk of its revenue from hardware sales.
Weak demand for both its ClearPath servers and its newer ES7000 line of 32-processor systems contributed to lower-than-expected first quarter results for Unisys. The outlook for the next quarter isn't much better as a result of the weak economic climate, CEO Lawrence Weinbach warned in a statement last week.
While servers such as those announced last week should extend the life of Unisys' ClearPath systems, the question is for how long, said Rob Schafer, an analyst at Stamford, Conn.-based Meta Group Inc.
"They just don't have the critical mass to justify [making their own chips] for much longer," Schafer said. As a result, "our view is not a question of if, but when Unisys will migrate away" from its proprietary technology, he added.
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