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Customer  Service 

Programme— 

Europe 


Piccadilly  House,  33/37  Regent  Street,  London  SWl  Y 4NF  (01)  493  9335 


Digitized  by  the  Internet  Archive 
in  2017  with  funding  from 
Peter  Cunningham 


https://archive.org/details/21017CSE 89CSE_EUSvcUpd 


Route  To: 


INPUT/ 

Output 


A Publication  of  INPUT'S  Advisory  Services  for  Management 


November  1988 


IN 

THIS  ISSUE: 

1 ... 

....Large-  and  Small-Systems  User 

7 .... 

...1988  Information  Systems 

Research 

Program  Planning  Report 

5... 

....SI  Leads  Federal  Information 

9.... 

...IBM's  SAA 

Growth 

10.. 

...The  Tides  of  Change:  Customer 

6... 

....Systems  Integration  Conference 

Service 

7... 

....Alternate  Distribution  Channels 

10.. 

...New  Releases 

...An  Advance  Look 

1988  Large-  and  Small-Systems 
User  Research 


In  the  first  half  of  every  year, 
INPUT'S  Customer  Service 
Program  (CSP)  primary  research 
efforts  revolve  around  extensive 
interviewing  of  assorted  large- 
and  small-system  users  regard- 
ing their  service  and  support 
needs  and  satisfaction  with  their 
service  vendors.  INPUT  places 
great  importance  on  this  effort. 


since  it  is  the  user  force  that 
drives  the  customer  service 
market.  In  addition  to  providing 
customer  satisfaction  indices  for 
our  clients,  the  user  research  also 
helps  uncover  industry-wide 
trends  regarding  unmet  user 
needs  and  the  resulting  opportu- 
nities for  future  growth. 


Each  year,  INPUT  selects  (as 
suggested  by  CSP  clients)  a list 
of  large-  and  small-systems 
products  to  analyze.  User  lists 
of  products  are  collected  and  a 
questionnaire  is  designed  (again 
with  the  assistance  of  CSP 
clients).  Next  comes  the  time- 
consuming  task  of  interviewing 

Continued  on  page  2 


INPUT,  1280  Villa  Street,  Mountain  View,  CA  94041-1194  © 1988  by  INPUT.  Reproduction  prohibited. 

Subscription  rates:  $195  per  year  in  North  America,  $205  elsewhere.  Subscription  information;  Call  (415)  961-3300. 

No  charge  to  INPUT  program  clients. 


INPUT/Output 


2 


Systems , . . . from  page  1 

Information  Systems  officials  at 
Fortune-!  500-size  companies 
over  the  telephone  (each  inter- 
view takes  up  to  30  minutes). 

The  data  collected  are  stored  and 
manipulated  in  a microcomputer 
data  base  management  system, 
and  then  statistically  analyzed  to 
prepare  the  actual  reports 
delivered  to  INPUT  clients. 

This  article  provides  current 
Customer  Service  Program 
clients  with  an  early  look  at  1988 
research  findings  and  nonclients 
with  a taste  of  the  type  of  pri- 
mary research  that  INPUT 
provides. 

In  1988,  INPUT  surveyed  381 
large-system  and  399  small- 
system  users,  up  from  350  large- 
system  and  360  small-system 
users  surveyed  in  1987.  Large- 
system  products  analyzed  in- 
clude the  Amdahl  58XX,  the 


CDC  Cyber  180,  the  IBM  309X 
and  308X,  the  NAS  AS/XL,  the 
NCR  9XXX,  the  Unisys  AX  and 
1100/XX,  and  the  Honeywell 
DPS  mainframe  systems.  Small 
systems  covered  include  the 
AT&T  3BX,  Concurrent  32XX, 
DG  MV/ 10  and  20,000,  DEC 
VAX  and  PDP  lines,  HP  3000, 
IBM  System  38  and  9370  lines. 
Prime  9X5X,  and  Wang  VS  small 
systems.  The  respective  Large- 
and  Small-System  reports  will 
analyze  each  of  these  products 
in  much  greater  depth,  but  this 
article  provides  an  overview  of 
users'  large-  and  small-system 
requirements  and  satisfaction 
with  their  vendors'  performance 
in  the  key  service  areas  of  sys- 
tem availability,  parts  availabil- 
ity, and  software  documenta- 
tion, as  well  as  the  overall  reac- 
tion to  hardware  maintenance 
and  software  support. 

Year  after  year,  INPUT'S  user 
research  has  confirmed  that 


large-  and  small-system  users 
place  greatest  importance  on  re- 
ceiving optimal  system  availabil- 
ity from  their  computer  systems. 
Exhibit  A summarizes  the  1988 
findings. 

Large-system  users  are  reporting 
system  availability  requirements 
of  98.3%  (identical  to  last  year's 
sample)  versus  97.9%  received 
(up  slightly  from  last  year's 
97.6%).  This  may  suggest  that 
large-system  user  expectations 
may  be  leveling  off,  which  is 
good  news  for  large-system 
service  vendors.  This  good 
news  is  reinforced  by  an  increase 
in  the  percentage  of  large-system 
users  (63%  in  1988)  who  were 
satisfied  with  their  system 
availability — up  from  56%  in 
1987. 

Small-system  users  reported 
much  lower  system  availability 
requirements  (97.9%  in  1987, 
falling  to  96.9%  in  1988)  and  re- 


Exhibit  A 

1988  SYSTEM  AVAILABILITY  PERFORMANCE 


System 


Required 

(Percent) 


Received 

(Percent) 


Sample  Satisfied 
(Percent) 


Large 


Small 


98.3 


96.9 


97.9 


96.1 


0 


50 


100 


2 1987 


1988 


Source  INPUT 


© 1988  by  INPUT.  Reproduction  Prohibited. 


INPI 


October,  1988 


3 


Exhibit  B 

LARGE-SYSTEM  USER  SATISFACTION 

Percent  Satisfied 
60  r 


Overall  Hardware 

Spares 

Software  Support 

Software 

Maintenance 

Availability 

Overall 

Documentation 

□ 1986 

Source  INPUT 

^ 1987 

□ 1988 

ceived  96.9%  in  1987, 
falling  to  96.1%  in  1988. 

Part  of  this  drop  in  expec- 
tations and  actual  per- 
formance can  be  attrib- 
uted to  changes  in  the 
products  analyzed  (i.e.. 

Tandem  NonStops  were 
dropped  from  the  sample 
in  1988,  and  the  1988 
sample  analyzed  the  PDF 
line  instead  of  the  larger 
VAX  11/780  line).  The 
latter  information  will 
help  detenuine  whether 
this  drop  in  expectations 
and  performance  is  also 
present  in  individual 
product  samples,  or 
whether  the  reductions 
can  be  isolated  to  changes 
in  the  product  sample.  In 
any  case,  only  56%  of  the 
small-system  users  sur- 
veyed were  satisfied  with 
the  system  availability 
that  they  received  (down 
from  59%  in  1987). 

Each  year,  INPUT  asks 
users  to  rate  first  their  re- 
quirement, and  then  their 
satisfaction  with  each  of  a 
number  of  services  in  all  aspects 
of  customer  support:  hardware 
maintenance,  software  support, 
professional  services  (e.g., 
planning  and  consulting  serv- 
ices) and  educational  services. 
More  than  a simple  analysis  of 
customer  satisfaction,  these 
questions  uncover  and  measure 
user  requirements  for  a number 
of  innovative  support  services, 
providing  new  opportunities  for 
increased  user  satisfaction  and 
service  revenues. 

In  this  article,  the  key  areas  of 
spare  parts  availability,  software 
documentation,  overall  satisfac- 
tion with  hardware  mainte- 


nance, and  overall  satisfaction 
with  software  support  are 
examined  (these  four  segments 
rate  highest  in  importance  yet 
lowest  in  satisfaction  year  after 
year). 

In  the  large-system  environ- 
ment, it  is  not  surprising  to  see 
the  importance  of  spares  availa- 
bility, since  few  large-system 
users  accept  downtime  caused 
by  the  lack  of  needed  spare 
parts,  regardless  of  rising  spare 
parts  costs.  Fortunately,  in- 
creased service  automation 
(such  as  remote  diagnostics)  and 
logistics  advances  have  acted  to 
minimize  downtime  caused  by 
sparing  problems. 


Instead,  it  appears  that  the 
biggest  problem  area  in  the 
large-system  environment  is  in 
software  support  (as  shown  in 
Exhibit  B),  both  overall  and, 
most  significantly,  software 
documentation.  Often,  service 
organizations  prefer  to  consider 
these  areas  as  out  of  their  con- 
trol, since  outside  software 
developers  often  provide  the 
software,  documentation,  and 
support.  Lastly,  user  satisfaction 
(or  dissatisfaction)  with  the  soft- 
ware product  perfonnance  and 
support  has  some  impact  on 
user  satisfaction  with  hardware. 


Continued  on  page  4 


© 1988  by  INPUT.  Reproduction  Prohibited. 


INPUT 


INPUT/Output 


4 


Systems . . . from  page  3 

In  the  small-system  environment 
(shown  in  Exhibit  C),  there  is 
greater  concern  (and  dissatisfac- 
tion) with  spares  availability 
than  software  support,  which  is 
probably  due  to  the  lesser 
rehance  and  development  of 
automated  support  technology 
(although  this  is  changing  rap- 
idly). 

What  is  most  discouraging  is  the 
steadily  increasing  dissatisfac- 
tion with  software  documenta- 


tion (60%  dissatisfied  in  1986, 
growing  to  70%  in  1988).  This 
highlights  the  need  for  increased 
attention  placed  on  documenta- 
tion design,  development,  pro- 
duction, and  distribution.  Users 
continually  complain  about  the 
clarity  and  "usability^'  of  the 
documentation,  as  well  as  the 
update  process.  Needed  im- 
provements include  increased 
interaction  with  and  involve- 
ment by  user  groups  in  the 
documentation  process,  and  in- 
creased use  of  alpha-  and  beta- 
testing of  the  documentation  as 
well  as  the  product.  ■ 


More  in-depth  information  is 
available  in  the  following  recent 
INPUT  reports: 

• Analysis  of  Large  Systems  Service 

• Analysis  of  Small  Systems  Service 

• Armlysis  of  Third-Party  Mainte- 
nance 

For  more  information  about  these 
reports  check  Systems  on  the  action 
card;  for  more  information  about 
the  full  service  check  CSP  on  the 
action  card;  call  INPUT  at 
(415)  961-33(X)  ext.  500  or  see  order 
form  on  page  12. 


Exhibit  C 


SMALL-SYSTEM  USER  SATISFACTION 


Percent  Satisfied 


60 


Overall  Hardware 
Maintenance 


Spares  Software  Support  Software 
Availability  Overall  Documentation 


23  1 986  Source  INPUT 

@ 1987 

□ 1988 


© 1988  by  INPUT.  Reproduction  Prohibited. 


INPl 


October,  1988 


5 


SI  Leads  Federal  Professional  Services  Market  Growth 


As  shown  in  Exhibit  D,  the 
federal  market  for  informa- 
tion technology  professional 
services  is  expected  to  grow 
from  $3.6  billion  in  1987  to  $6.2 
billion  in  1992,  at  an  average  an- 
nual growth  rate  of  13  percent. 
This  is  the  conclusion  of  a 1988 
report  from  INPUT  entitled 
Federal  Professional  Services 
Market. 

Of  greater  significance,  however, 
is  that  the  systems  integration 
segment  of  this  market,  now  the 
number-two  niche  at  $1  billion  a 
year,  will  more  than  double  over 
the  five-year  period  to  $2.3  bil- 
lion, becoming  the  biggest  seg- 
ment within  the  market  as  well 
as  the  fastest  growing,  with  an 
average  annual  growth  rate  of  17 
percent.  The  growth  of  systems 
integration  derives  from  the 
government's  need  for  solutions, 
as  opposed  to  components. 

Further,  the  shortage  of  in-house 
technical  experts  limits  many 
agencies  in  designing  solutions 
internally.  Consequently, 
agency  executives  increasingly 
are  looking  toward  the  market- 
place for  creativity  and  innova- 
tion in  solving  government 
problems. 

Systems  integration  contracts 
give  agency  executives  the 
opportunity  to  take  advantage  of 
the  latest  technology  and  best 
minds  available  to  solve  these 
problems.  INPUT'S  study  shows 
that  agencies  are  tending  more 
toward  functional  specifications 
to  meet  their  needs,  thus  driving 
the  selection  process  farther  up 
the  organizational  hierarchy. 
Program  managers,  as  opposed 
to  technology  managers,  are 


Exhibit  D federal  professional  services 

MARKET 

($  Billions)  AAGR 

Q (Percent) 

TOTAL  6.2  13 


Fiscal  Year 


□ Facilities  Mgmt  Source  INPUT 

^ Systems  Integration 
0 Software  Development 
■ Design  & Consulting 
Q Education  & Training 


taking  on  a greater  role  in  source 
selection,  since  they  better 
understand  agency  program 
needs. 

Although  programming  and 
analysis  have  traditionally  taken 
the  biggest  piece  of  professional 
services,  INPUT  now  finds  this 
changing.  The  growing  use  of 
software  packages,  as  well  as 
agency  policies  encouraging 
their  use,  will  tend  to  dampen 
the  increase  in  this  category. 

Although  software  development 
has  slowed  to  an  1 1 percent 
annual  growth,  it  is  still  pro- 
jected to  increase  from  its  pres- 
ent $1.1  billion  to  $1.8  billion  by 
1992,  since  many  agencies  are 
still  looking  to  the  marketplace 


for  custom  software  to  meet 
their  (perceived)  unique  needs. 

The  need  for  custom  software  is 
particularly  true  for  scientific  or 
military  applications,  for  which 
no  commercial  counterpart  may 
exist.  Just  as  in  the  systems  inte- 
gration category,  the  value 
added  represents  a special  op- 
portunity for  both  the  govern- 
ment and  its  contractors. 

Facilities  management  will  grow 
at  8 percent  annually  from  $.8 
billion  to  $1.2  billion,  with  edu- 
cation and  training,  now  a $.3 
billion  segment,  rising  to  $.4 
billion  in  1992,  with  an  average 
annual  growth  of  7 percent. 

Continued  on  page  6 


© 1988  by  INPUT.  Reproduction  Prohibited. 


INPUT 


INPUT/Output 


6 


SI  Leads . . . . from  page  5 

The  slowdown  in  growth  in 
these  categories  is  due  in  part  to 
increased  demand  for  more 
complex  services  and  in  part  to 
these  activities  being  increas- 
ingly folded  into 
systems  integra-  ' 


growing  emphasis  on  OMB 
Circular  A-76,  as  well  as  the  new 
Executive  Order  12615  (Perform- 
ance of  Commercial  Activities), 
emphasizes  the  bias  toward 
contracting  out.  At  an  increas- 
ing rate,  agencies  must  use 


tion  procure- 
ments. 


In  its  drive  to 
improve  produc- 
tivity,  to  do  more 
with  less,  the  federal  govern- 
ment is  growing  increasingly  re- 
liant on  information  technology. 
At  the  same  time,  functional  and 
pricing  trends,  especially  in 
terms  of  microcomputers  and 
associated  software,  have 
opened  up  new  opportunities  in 
government  for  using  the  tech- 
nology. 

However,  the  Reagan  admini- 
stration has  encouraged  con- 
tracting out  many  formerly  in- 
house  activities,  including 
professional  services.  The 


^...microcomputers  and  associated  software 
have  opened  up  new  opportunities  in 
government  for  using  the  technology.” 


obtain  higher  salaries  and  better 
benefits  in  the  private  sector 
than  in  government.  Thus, 
many  employees  with  fewer 
than  15  years  of  service  are 
leaving  government,  causing 
agency  executives  with  more 
than  20  years  of 
service  themselves 
to  contract  out 
most  of  their  tech- 
nical support  ac- 
tivities. 


professional  services  firms  to 
take  advantage  of  the  technol- 
ogy and  reach  their  productivity 
goals. 

Federal  personnel  policies  are 
also  driving  an  increase  in  the 
use  of  professional  services 
firms.  Practically  all  agency 
executives  interviewed  by 
INPUT  cited  difficulty  in  hiring 
staff  with  strong  technical  cre- 
dentials. 

In  the  Washington  area,  at  least, 
good  candidates  can  frequently 


In  the  preparation  of  its  report 
on  the  federal  professional 
services  market,  INPUT  inter- 
viewed agency  and  vendor 
executives  on  the  subject  of 
teaming  arrangements,  contract- 
ing procedures,  and  selection 
criteria.  ■ 

For  more  information  about  the 
report  check  Federal  on  the  action 
card;  for  more  information  about 
the  full  service  check  FISSP  on  the 
action  card;  call  INPUT  at 
(703)  847-6870  ext.  500  or  see  order 
form — page  12. 


Systems  Integration  Executives  Convene  in  Chicago 


Input's  Systems  Integration 
Research  team  and  the 
clients  of  INPUT'S  Systems  Inte- 
gration Planning  Service  met  in 
Chicago  on  July  19  and  20, 1988, 
for  the  second  1988  working 
session.  This  session  focused  on 
the  research  INPUT  has  con- 
ducted to  date  in  1988  and  the 
ongoing  challenge  of  tracking  an 
emerging  market.  The  meetings 
were  well-attended  and  highly 
rated  by  clients. 

On  the  first  day,  the  attendees 
received  and  discussed  a pro- 
posed framework  for  segment- 
ing and  analyzing  the  CSI 
market  and  for  positioning  the 


vendors  within  the  market, 
discussed  the  process  of  forming 
strategic  alliances  and  the  ingre- 
dients to  success,  and  had  a first 
look  at  the  secondary  players  in 
CSI  (smaller  vendors  that  are 
actively  seeking  participation  in 
this  market  but  do  not  have  the 
resources  to  be  a full  sy.stems 
integrator). 

On  the  second  day,  the  views  of 
the  CSI  "buyer"  were  the  focus 
of  the  discussion.  INPUT  began 
with  the  results  of  its  recently 
completed  research  report. 
Systems  Integration — Buyer  Issues. 
This  was  followed  by  three  user- 
presented  case  studies  that 


helped  highlight  the  diversity  of 
this  new  market  and  the  chal- 
lenge facing  vendors  participat- 
ing in  it. 

The  third  meeting  was  held  in 
conjuction  with  INPUT'S  Annual 
Client  Conference  in  September. 


For  more  information  about  SI 
reports  check  Systems  Integration 
on  the  action  card;  for  more  infor- 
mation about  the  full  service  check 
SIP  on  the  action  card;  call  INPUT 
at  (415)  961-3300  ext.  500. 


© 1988  by  INPUT.  Reproduction  Prohibited. 


INPI 


October,  1988 


7 


Alternate  Distribution  Channels 


It  has  become  increasingly 
more  difficult  and  expensive 
to  reach  users  with  products  that 
have  modest  price  tags  on  each 
specific  applications  solution. 

For  many  years  value-added 
resellers  (VARs)  have  been  an 
important  and  influential  vehicle 
to  allow  smaller  hardware- 
oriented  vendors  to  establish 
their  products  and  name  in  the 
market.  In  addition,  larger 
manufacturers  have  used  VARs 
to  complement  their  marketing 
and  sales  efforts  to  reach  end 
users  with  industry-specific 
applications  solutions. 

INPUT  performed  research  to 
determine  how  this  channel 


element  could  be  further  utilized 
by  information  services  vendors 
other  than  hardware  vendors.  In 
addition,  the  research  included 
determining  the  current  state  of 
VAR  business,  covering  issues, 
trends,  and  developments 
impacting  the  VAR  community. 

VARs  are  shifting  their  focus 
from  a scattered  "buckshot"  ap- 
proach in  their  sales  efforts.  As 
they  learn  to  coexist  with  the 
manufacturers  they  work  with, 
their  efforts  have  become  more 
directed.  Additionally,  software 
vendors  and  processing/ net- 
work vendors  have  been  starting 
to  use  VARs  as  a way  to  comple- 


ment their  sales  distribution 
strategies. 

input's  new  report  entitled 
Alternate  Distribution  Channels 
surveys  the  VAR  market  and 
obtains  some  interesting  per- 
spectives on  what  is  happening 
in  this  channel.  This  report  will 
be  useful  to  vendors  that  are 
looking  at  ways  to  extend  their 
current  marketing  effort.  ■ 


For  more  information  about  this 
report  check  Distribution  Channels 
on  the  action  card;  for  more  infor- 
mation about  the  full  service  check 
MAP  on  the  action  card;  call  INPUT 
at  (415)  961-3300  ext.  500  or  see 
order  form  on  page  12. 


1988  Information  Systems  Program 
Planning  Report 


INPUT'S  annual  assessment  of 
the  forces,  issues,  and  under- 
lying trends  facing  the  Informa- 
tion Systems  function  will  be 
available  just  in  time  to  support 
the  development  of  1989  IS  plans 
and  budgets.  The  most  in-depth 
analysis  in  recent  years,  the  1988 
Planning  Report  is  based  on 
over  400  interviews  with  senior 
information  management  pro- 
fessionals on  application  devel- 
opment, data  management,  key 
issues,  and  budget  trends. 

The  findings  indicate  that  as  we 
near  the  end  of  the  1980s  the  in- 
formation systems  function  is 
facing  more  pressure  and  chang- 
ing faster  than  it  has  during  the 
past  ten  years.  By  the  early 
1990s  the  IS  function  of  a pro- 
gressive organization  will  look 


significantly  different  than  it 
does  today. 

The  issues  facing  IS  all  result 
from  pressure  to  improve  the 
bottom  line  and  strategic  contri- 
bution of  IS  to  the  organization. 
These  issues  in  turn  will  shift  the 
structure  of  the  central  IS  func- 
tion over  the  next  few  years. 

Major  Issues — 1988 

• Rising  Management  Expecta- 
tions 

• User  Demands  for  Increas- 
ingly Complex  Solutions 

• Managing  the  Technology  In- 
vestment 

• Integration — Data  and  Appli- 
cations 


1988  by  INPUT.  Reproduction  Prohibited. 


• Development  Productivity 

• "Mission  Critical"  Systems 

The  1988  report  indicates  that  IS 
continues  to  operate  in  the  con- 
strained environment  of  modest 
budget  growth  and  increasing 
development  demands.  Budget 
growth  averaged  only  4%  in 
1988  and  is  projected  at  5%  for 
1989. 

INPUT  has  a growing  belief  that 
a greater  portion  of  the  "IS 
budget"  is  moving  outside  the 
direct  control  of  IS  each  year. 

As  Exhibit  E shows,  only  55%  of 
the  IS  budgets  include  operat- 
ing-division IS  expenses  and 
62%  include  end-user  comput- 


Continued  on  page  8 


INPUT 


INPUT/Output 


8 


Exhibit  E 


INFORMATION  SYSTEMS  BUDGET- 
WHAT  IT  INCLUDES 

Percent 
Respondents 
80 


60 


40 


20 


0 


Operating  Division 
& Subsidiaries 


El 


Including 
^ Budget 


End  User 
Computing 

Source  INPUT 


1988  Information 

Systems ....  . . . from  page  7 

ing  expenses.  As  more  and 
more  computing  is  distributed 
across  the  organization,  the 
related  expense  is  also  being 
dispersed. 

The  application  development 
challenge  remains  as  intense  as 
ever.  The  1988  findings  include: 

• 83%  report  the  backlog  is 
unchanged  or  larger. 

• 24%  now  use  CASE  technol- 
ogy to  boost  productivity. 

• 52%  report  the  end  user  is 
developing  production 
versus  personal  productivity 
systems. 

• 20%  of  all  new  development 
is  being  done  by  end  users. 

Within  the  data  management 
process  and  function,  INPUT 
finds  significant  concern  and 
change  underway.  The  move  to 
operational  versus  prototype  use 
of  relational  DBMS  technology  is 
in  full  swing.  With  it  comes  the 
challenge  for  data  administra- 
tion to  learn  a new  technology 
while  integrating  it  with  the 
existing  data  bases  and  control 
processes. 

Key  findings  in  the  data  man- 
agement area  are: 

• 62%  of  data  management 
managers  believe  their  per- 
formance is  no  better  than 
average. 

• 42%  now  use  more  than  one 
mainframe  DBMS. 

• Over  60%  now  use  relational 
DBMS. 


• Minicomputer  DBMSs  are 
quickly  replacing  file-oriented 
environments. 

Over  the  next  five  years  INPUT 
expects  the  role  of  the  central  in- 
formation systems  function  to 
undergo  major  change.  As  the 
use  of  more  powerful  (intelligent 
workstation,  DBMS,  and  other) 
technology  spreads  to  the  end 
user,  and  the  challenge  to  create 
complex  solutions  gains  priority, 
the  principal  responsibilities  of 
Information  Systems  will  shift 
from  doing  to  planning  and  en- 
gineering. 

By  the  early  1990s,  INPUT  ex- 
pects the  progressive  IS  organi- 
zation will  be  smaller,  expert 
based,  with  a consultant  style.  It 
will  oversee  the  network  and 


core  data  processing  only.  Much 
of  the  application  development 
and  processing  will  be  managed 
by  the  end-user  organization 
and  the  dispersed  IS  profes- 
sional. 

The  years  1989  and  beyond  will 
bring  immense  challenge  and 
change  to  the  IS  function. 
INPUT'S  1988  ISP  Planning  Re- 
port can  help  IS  management 
prepare  for  and  successfully 
meet  that  challenge.  ■ 


For  more  information  about  this 
report  check  Information  Systems 
on  the  action  card;  for  more  infor- 
mation about  the  full  service  check 
ISP  on  the  action  card;  call  INPUT 
at  (415)  961-3300  ext.  500  or  see 
order  form  on  page  12. 


© 1988  by  INPUT.  Reproduction  Prohibited. 


INPL 


October,  1988 


9 


Exhibit  F 


SAA— WHAT  IS  IT? 


Source  INPUT 


IBM’S  SAA 

IBM  officially  announced 
Systems  Application  Architec- 
ture (SAA)  on  March  17, 1987. 
INPUT  believes  this  announce- 
ment is  a key  strategic  statement 
providing  the  vendor  and  user 
community  with  information  on 
what  INPUT  believes  to  be  a 
major  shift  in  what  IBM  will  be 
marketing  and  selling  in  the 
future. 

In  its  report  IBM  Systems  Appli- 
cation Architecture  (June  1988), 
INPUT  describes  and  analyzes 
the  reasons  leading  to  SAA.  The 
report  also  covers  what  SAA  is, 
what  it  means,  when  it  will 
arrive,  and  provides  recommen- 
dations on  how  vendors  and 
users  can  take  advantage  of  the 
SAA  opportunity. 

Exhibit  F shows  the  major  ele- 
ments of  SAA,  including  a 
common  programming  inter- 
face, common  communications 
support,  common  user  access, 
and  common  applications. 
INPUT'S  report  covers  each  of 
these  elements  in  depth. 

Software  vendors  and  users 
need  to  be  aware  of  the  issues 
and  how  they  should  best  react 


those  it  experienced  in  the  early 
1980s.  IBM's  recent  AS/4(X)  an- 
nouncement ("Silverlake")  in- 
cludes two  major  facets  that  are 


In  the  future,  vendors  will  have 
the  ability  to  develop  applica- 
tions systems  that  will  tran- 
scend IBM's  hardware  families. 
This  is  the  power  of  SAA.  The 
report  is  valuable  reading  for 
those  in  the  vendor  community, 
as  well  as  the  end-user  commu- 
nity, to  obtain  vital  insight  into 
SAA.  ■ 


^ In  the  future,  vendors  will  have  the  ability  to 
develop  applications  systems  that  will  transcend 
IBM's  hardware  families.  ^ 


to  this  important  announcement. 
It  is  clear  that  IBM  recognizes 
the  importance  of  software,  es- 
pecially applications  software,  as 
a vehicle  to  expand  the  company 
with  growth  rates  similar  to 


the  foundation  of  SAA.  First, 
there  are  over  100  application 
packages  being  announced. 
Second  is  an  announcement  that 
initiated  the  wave  of  SAA  in  the 
IBM  midrange. 


For  more  information  about  this 
report  check  SAA  on  the  action 
card;  for  more  information  about 
the  full  service  check  MAP  on  the 
action  card;  call  INPUT  at 
(415)  %l-3300  ext.  500 
or  see  order  form  on  page  12. 


© 1988  by  INPUT.  Reproduction  Prohibited. 


INPUT 


INPUT/Output 


10 


The  Tides  of  Change:  Customer  Service 


t INPUT'S  Annual  Client 
Conference  on  September 
28-30,  1988  in  Scottsdale,  Ari- 
zona, Buddy  Stigler,  Director  of 
INPUT'S  Customer  Service 
Program,  reviewed  significant 
changes  that  have  or  will  occur 
and  their  impact  on  both  the 
service  market  and  the  overall 
cost  of  ownership  of  computer 
products. 

Historically,  customer  service 
has  been  a high-profit  product 
for  most  computer  vendors  and 
has  represented  a market  oppor- 
tunity for  third-party  mainte- 
nance companies.  During  the 
past  few  years,  large  customers 
have  stimulated  this  third-party 
competition  by  releasing  RFPs 
for  service  and  by  trying  alterna- 
tives to  lower  their  total  cost  of 
product  ownership.  They  have 
succeeded  to  a large  extent  in 
creating  a buyers'  market  for 


New  Releases 

INPUT  is  pleased  to  announce 
the  following  major  studies... 

EDI  Implementation  Case 
Studies  (June  1988)  An  in-depth 
look  at  four  leading-edge  users 
of  electronic  data  interchange: 
Hewlett-Packard,  American 
President  Companies,  Mervyn's, 
and  Levi  Strauss  & Co.  These 
four  companies,  representing 
different  industries,  show 
strikingly  similar  approaches 
and  experience  relative  to  EDI. 
The  report  focuses  on  the  man- 
agement issues  involved  in  EDI 
implementation  and  how  EDI  is 
changing  the  way  each  corn- 


service.  Computer  vendors  are 
concerned  not  only  with  the 
potential  loss  of  profit  but  also 
with  loss  of  account  control. 

IBM,  the  industry  leader,  has 
reacted  strongly  by  placing  a 
sharp  focus  on  lower  prices, 
higher  quality,  additional  cover- 
age and  services,  and  partner- 
ship with  its  customers.  The 
overall  goals  appear  to  be  an 
increase  in  market  share  and 
account  control.  These  actions 
have  lowered  the  overall  cost  of 
product  ownership  and  there- 
fore have  impacted  other  hard- 
ware vendors  as  well  as  third- 
party  maintainers.  For  example, 
the  dramatically  lower  prices 
make  the  IBM  product  much 
more  competitive  from  a price 
standpoint.  This  will  force 
IBM's  hardware  competitors  to 
lower  prices  or  accept  lower 
product  sales.  The  third-party 


pany's  industry  operates.  The 
lessons  learned  have  broad 
applicability,  and  can  serve  as  a 
valuable  management  guide  for 
launching  EDI  in  nearly  any 
type  of  firm.  Further,  the  study 
can  help  EDI  network/process- 
ing, software,  and  professional 
service  firms  understand  the 
inside  dynamics  of  companies 
considering  their  EDI  options. 

(Check  EDI  on  action  card.) 

Information  Services  Industry 
Report  (October  1988)  This 
market  report  explains  in  detail 
this  rapidly  growing  arena. 

Four  delivery  modes  of  the 


maintainer  will  have  to  decrease 
price  in  order  to  remain  com- 
petitive. 

The  overall  outlook  for  IBM, 
other  hardware  vendors  and 
third-party  maintainers  is  for 
reduced  profit  margins  for 
service.  As  a result,  the  search  is 
on  for  additional  offerings  that 
will  provide  profit  opportunity. 
Customers  will  continue  to 
stimulate  competition  in  an 
attempt  to  keep  the  trend  to- 
ward a buyer's  market.  ■ 


For  more  information  about  the  full 
service  check  CSP  on  the  action 
card;  call  INPUT  at  (415)  961-3300 
ext.  500  or  see 
order  form  on  page  12. 


information  services  business 
are  outlined.  Opportunities  in 
each  sector  of  software  products, 
processing/network  services, 
turnkey  systems,  systems  inte- 
gration, and  professional  serv- 
ices have  been  illustrated. 

(Check  Information  Services  on 
action  card.) 

Alternate  Distribution  Channels 
(June  1988)  will  investigate  the 
VAR  distribution  channel  and  its 
ability  to  offer  a complementary 
vehicle  to  other  marketing/sales 
channels  being  employed.  The 
traditional  role  of  all  VARs  has 
been  to  offer  industry-specific 


© 1988  by  INPUT.  Reproduction  Prohibited 


INPl 


October,  1 988 


11 


New  Release  . . . frontpage  10 

expertise  through  a turnkey 
solution.  INPUT  will  explore 
and  evaluate  this  industry 
expertise  relative  to  other  deliv- 
ery modes  to  determine  the 
degree  of  effectiveness  present 
in  current  approaches. 

(Check  Distribution  Channels  on 
action  card.) 

SAA  - Impact  on  the  Industry 
(June  1988)  With  Systems 
Application  Architecture  (SAA), 
IBM  has  revealed  a major  prod- 
uct and  market  direction  that  far 
surpasses  SNA,  announced  in 
1974.  SAA  is  a major  commit- 
ment by  IBM  to  have  software 
universally  available  on  a broad 
mix  of  IBM  hardware  systems 
providing  common  interfaces, 
functionality,  and  system  flexi- 
bility. The  ability  to  grow  from 
one  hardware  platform  to 
another  has  added  to  DEC'S 
success;  applications  software 
(and  its  implicit  investment) 
migrates  with  the  application 
system. 

(Check  SAA  on  action  card.) 

In  this  report,  INPUT  examines 
the  progress  of  the  SAA  devel- 
opment effort  and  provides 
insight  into  the  potential  chal- 
lenges, success,  and  expecta- 
tions. 

1988  Information  Systems 
Program  Annual  Planning 
Report  (October  1988)  An  in- 
depth  analysis  based  upon 
interviews  with  over  400  senior 
information  management  pro- 
fessionals on  application  devel- 
opment, data  management,  key 
issues,  and  budget  trends. 

(Check  Information  Systems  on 
action  card.)  ■ 


About  INPUT 


INPUT  provides  planning  information,  analysis, 
and  recommendations  to  managers  and  executives 
in  the  information  industries.  Through  market 
research,  technology  forecasting,  and  competitive 
analysis,  INPUT  supports  client  management  in 
making  informed  decisions.  Continuing  services 
are  provided  to  users  and  vendors  of  computers, 
communications,  office  products,  and  services. 

The  company  carries  out  continuous  and  in-depth 
research.  Working  closely  with  clients  on  impor- 
tant issues,  INPUT'S  professional  staff  members 
analyze  and  interpret  the  research  data,  then  de- 
velop recommendations  and  innovative  ideas  to 
meet  clients'  needs.  Clients  receive  reports,  pres- 
entations, access  to  data  on  which  analyses  are 
based,  and  continuous  consulting. 

Many  of  INPUT'S  professional  staff  have  nearly  20 
years  of  experience  in  their  areas  of  specialization. 
Most  have  held  senior  management  positions  in 
operations,  marketing,  or  planning.  This  expertise 
enables  INPUT  to  supply  practical  solutions  to 
complex  business  problems. 

Formed  in  1974,  INPUT  has  become  a leading 
international  planning  services  firm.  Clients  in- 
clude over  100  of  the  world's  largest  and  most 
technically  advanced  companies.  ■ 


Information  contained  in  this  publication  has  been  obtained  by 
INPUT.  No  part  of  this  publication  may  be  reproduced  or  distributed 
in  any  form  or  by  any  means  or  stored  in  any  data  base  electronic 
retrieval  system  without  the  prior  written  permission  of  INPUT. 


© 1988  by  INPUT.  Reproduction  Prohibited. 


INPUT 


ORDER  FORM 


To  order  the  reports  mentioned  in  this  issue  or  to  have  someone  at  INPUT  contact  you,  check  the  appropriate 
box(es)  below  and  return  with  your  check  OR  purchase  order  number  to  INPUT,  1280  Villa  Street,  Mountain  View, 
CA  94041-1194. 

“^^REMEMBER,  if  you  are  already  subscribing  to  an  INPUT  program  or  report  or  if  you  buy  more  than  one 
report,  there  may  be  additional  savings  available.  Call  today  to  find  out  if  you  are  eligible. 

□ YES!  Please  send  the  reports  or  enroll  me  in  the  seminar(s)/conference(s)  checked  below. 

□ YES!  Please  have  someone  contact  me  regarding  the  items  checked  below.  I understand  that  I am  under  no 

obligation  to  purchase. 


□ Analysis  of  Large  Systems  Service 

□ 1988  Information  Systems  Planning  Report 

($1500) 

($995) 

□ Analysis  of  Small  Systems  Service 

□ A Guide  to  EDI  Implementation  ($695) 

($1500) 

□ 1988  Information  Services  Industry  Report 

□ Analysis  of  Third-Party  Maintenance 

($695) 

($1500) 

□ SAA — Impact  on  the  Information  Services 

□ Federal  Government  Professional  Service 

Industry  ($695) 

Market  ($1395) 

□ INPUT/output  Newsletter  ($195/12  issues  per 

□ Alternate  Distribution  Channels  ($695) 

year) 

□ Bill  my  company  on  P.O.# in  the  amount  of  $ 

□ Check  enclosed  in  the  amount  of  $ 


Company 


Name 


Title 


Address 


City 


State 


Zip 


Phone 


Signature 


Date 


OFFICES — North  America 
Headquarters 

1280  Villa  Street,  Mountain  View,  CA  94041 
(415)  961-3300  Telex  171407  Fax  (415)  961-3966 

New  York 

Parsippany  Place  Corp.  Center,  Suite  201 
959  Route  46  East,  Parsippany,  NJ  07054 
(201)  299-6999  Telex  134630  Fax  (201)  263-8341 

Washington,  D.C. 

8298  C,  Old  Courthouse  Rd.,  Vienna,  VA  22180 
(703)  847-6870  Fax  (703)  847-6872 


— International 
Europe— INPUT  LTD. 

Piccadilly  House,  33/37  Regent  Street,  London  SWIY 
4NF,  England  01-493-9335  Telex  27113  Fax  01-629-0179 

INPUT  s.a.r.l. 

29  rue  de  Leningrad,  75008  Paris,  France 
44-80^8-43  Fax  44-80-40-23 

Japan 

FKI,  Future  Knowledge  Institute,  Saida  Building, 

4-6,  Kanda  Sakuma-cho,  Chiyoda-ku,  Tokyo  101,  Japan 
03-864-4026  Fax  03-864-4114 


INPUT 


Service 
U pdate 


Headquarters 

1280  Villa  Street,  Mountain  View,  CA  94041 
(415)  961-3300 

New  York 

280  North  Central  Avenue,  Hartsdale,  NY  10530 
(914)  948-3126 

Parsippany  Place  Corp.  Center,  Suite  201 
959  Route  46  East,  Parsippany,  NJ  07054 
(201)  299-6999 

Washington,  D.C, 

8298  Old  Courthouse  Road,  Vienna  VA  22182 
(703)  847-6870 

Europe 

Piccadilly  House,  33/37  Regent  Street 
London  SWIY  4NF,  England  (01)  493  9335 

Paris 

29  rue  de  Leningrad,  75008  Paris,  France 
(16)  44-80-48-43 

Japan 

FKI,  Future  Knowledge  Institute 
Saida  Building,  4-6,  Kanda  Sakuma-cho 
Chiyoda-ku,  Tokyo  101,  Japan 
(03)  864-4026 


A Publication  from  INPUT'S  Customer  Service  Programme— Europe 


I 


I 


..■A 


0 


I 


i 


(V 


Route: 


INPUT 

Service 

Update 


© INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — Europe 


October  1989 

IN 

1 

Granada:  A Profile  of  Europe’s  Leading  TPM 

THIS 

7 

Worldwide  Restructuring  at  NCR 

ISSUE: 

7 

Hewlett-Packard:  New  Software  Distribution  Technology 

7 

Snippets 

News  from  the  USA 

9 

Spotlight  on  “VAM/SURETY”:  Unisys’  New  VAR  Incentive 

Programme 

9 

Sun  Microsystems  to  Partner  with  Third-Party  Maintenance 

Organisations 

10 

Update  on  Control  Data  Corporation 

10 

Unisys  Introduces  “SURETY”:  Integrated  Services  for  the 

UNIX  U Series 

Granada:  The  Creation  of 
Europe’s  Largest  TPM 


Granada  Computer  Services 
International  Ltd  is  today 
the  largest  independent  mainte- 
nance company  in  Western 
Europe,  a company  that  is  truly 
Pan-European  with  operations 
that  extend  to  cover  most  of  the 
countries  in  Europe.  INPUT 
estimates  that  Granada's 
share  of  the  Western  Euro- 
pean third-party  mainte- 
nance market  is  15%.  The 
company  is  almost  three 


times  larger  than  its  closest  com- 
petitor. 

The  international  headquarters 
of  Granada  are  located  at  Wok- 
ingham in  the  United  Kingdom, 
about  40  miles  west  of  London 
in  an  area  well-known  for  high 


technology  adjacent  to  the  M4 
Motorway.  Many  major  com- 
puter companies  are  located  in 
this  area,  which  is  often  said  to 
be  the  UK  equivalent  of  "Silicon 
Valley".  The  UK  is  Europe's 
most  developed  third-party 
maintenance  market,  a market 
that  represents  Granada’s 
strongest  presence  having  a 
market  share  estimated  by 
INPUT  at  over  30%  of  this 
country's  market. 

Continued  on  next  page 


^ GRANADA  - 15%  European 
TPM  Market  Share  ^ 


2 


Service  Update 


GvClTLCldCL  ...from  page  1 

Until  recently  Granada  was 
unknown  in  the  sphere  of 
computer  maintenance  and  has 
become  a dominant  force  only 
in  the  last  two  years.  The 


from  television  broadcasting 
and  programme  production  to 
motorway  travellers'  services  to 
independent  computer  mainte- 
nance. The  business  structure  of 
the  Granada  Group  PLC  is 
illustrated  in  Exhibit  A,  which 


service  industry.  The  Group 
recognised  that  its  business  was 
mature  (highly  profitable  but 
unlikely  to  provide  much 
further  growth  in  profits)  and 
saw  a need  for  investment  in 
new  areas.  The  systematic 


Exhibit  A 


Granada  Group  PLC 
Business  Structure  Divisions 


Hentat  & Heiali 

Rental:  Retail  | 

Pure  Rental 

Hospital  TV 
Renta! 

I 


TV  Broadcasting  & 
Programme  Production 


North  West 
TV  Franchise 


international  Sales! 


Low-Budget  Film 


T 


Leisure  & 

Consumer  Services] 


Services  to 
Travellers 


Night  Out 
Entertainment 


Day/Short  Break 
Leisure 


1 


Services  to 
Business 


Commercial 

Rental 


7/777777777777777777 

^ Independent 

^ Computer 

/ Maintenancei 
^/////////////////A 


Specialist  Holidays 


creation  of  Granada  has  not 
been  the  result  of  entrepre- 
neurial activities  or  organic 
growth,  but  the  result  of  an 
aggressive  policy  of  acquisition 
that  commenced  in  April  1986, 
based  on  a strategy  defined  by 
the  parent  company,  Granada 
Group  PLC. 

Raison  d’Etre 

The  Granada  Group  PLC  is  a 
long-established  UK  company 
operating  within  the  services 
industry  in  what  could  broadly 
be  described  as  the  leisure 
sector.  Group  turnover  in  1988 
was  £1.5  billion,  which  gener- 
ated £143  million  profit  before 
tax.  The  Group  has  a wide 
range  of  activities,  which  extend 

INPUT 


also  shows  that  the  independent 
computer  maintenance  activities 
are  part  of  the  Services  to  Busi- 
ness Division.  Chairman  of  this 
division  is  Conor  Kehoe,  who  is 
also  Chairman  and  Managing 
Director  of  Granada  Computer 
Services  International. 


« GRANADA-  Created 
by  an  Aggressive 
Acquisition  Policy  ^ 


Entry  into  the  independent 
computer  maintenance  market 
was  the  result  of  a Granada 
Group  strategy  to  seek  and 
invest  in  a new  high-growth 


search  for  a new  business  was 
based  on  three  criteria: 

• A high-growth  industry  with 
visibility  and  good  potential 
for  profit  growth 

• An  opportunity  to  participate 
in  an  industry  where  the 
company  could  develop  and 
sustain  a strong  leadership 
position.  Put  another  way, 
there  had  to  be  advantages  in 
size  that  could  not  easily  be 
duplicated 

• An  industry  where  the  com- 
pany had  an  understanding 
of  the  management  task 

From  these  criteria  it  can  be  seen 
that  market  dominance  was 


© 1989  by  INPUT.  Reproduction  prohibited. 


October  1989 


i] 


Exhibit 

B 


Evolution  of  Granada  Computer  Services 


1986 

CFM  acquired 

SMS  France,  UK  and  Germany  acquired 

SMS  Spain  launched 

CFM  and  SMS  UK  integrated 


1987 

Acquisitions  in  UK  and  France 
SMS  Italy  and  Belgium  launched 


1988 

Mainstay  acquired 
DPCE  acquired 
WIGO  acquired 


Granada  Computer  Services  International 


envisaged  at  an  early  stage,  in 
fact  was  a requirement.  The 
independent  computer  mainte- 
nance market  fulfilled  these 
criteria  in  terms  of: 

• The  market  had  potential  for 
growth 

• The  market  was  at  that  time 
fragmented  but  also  pro- 
vided a strong  case  for  lead- 
ership on  a scale  that  would 
permit  the  servicing  of  inter- 
national accounts. 

• Granada  had  existing  experi- 
ence in  managing  service 
companies,  particularly  "on- 
call"  repair,  which  provided 
the  experience  necessary  to 
manage  maintenance  compa- 
nies. 

Granada's  entry  into  the  inde- 
pendent computer  maintenance 
market  resulted  in  a restructur- 
ing of  the  industry.  This  re- 
structuring resulted  from 
Granada's  market  leadership. 
Granada's  strategy  was  the 
acquisition  of  companies  that 
were  existing  market  leaders  in 
their  own  right,  although  none 
had  achieved  the  degree  of  lead- 
ership Granada  sought.  The  fact 
that  a number  of  companies  at 
that  time  were  considered 
leaders  did  not  diminish  what 
Granada  saw  as  a still-frag- 
mented market.  Granada 


acquired  the  leaders  and  united 
them  to  form  a new  leader. 

What  followed  was  a chain  of 
acquisitions  supplemented  by 


organic  growth  and  expansion, 
the  highlights  of  which  are  illus- 
trated in  Exhibit  B,  and  can  be 
summarised  as  follows: 

• In  April  1986  Granada  ac- 
quired Computer  Field  Main- 
tenance (CFM),  which  was  at 
that  time  a joint  market 
leader  in  the  UK. 

• In  August  of  1986  the  opera- 


tions of  SMS  in  France, 
Germany  and  the  UK  were 
acquired  and  in  September 
of  that  year  SMS  operations 
in  Spain  were  launched. 

© 1989  by  INPUT.  Reproduction  prohibited. 


Also  in  that  year,  in  Decem- 
ber, CFM  and  SMS  activities 
in  the  UK  were  integrated. 

1987  saw  a number  of  smaller 
acquisitions  and  the  launch 
of  SMS  operations  in  Belgium 
and  Italy. 

In  January  1988  Mainstay 
was  acquired.  Mainstay  was 
a specialist  GSD  maintainer 
with  activities  in  Belgium, 

The  Netherlands  and  the  UK. 

In  June  of  1988  Granada 
completed  its  largest  acquisi- 
tion by  acquiring  DPCE  at  a 
cost  of  £ 110  million.  At  that 
time  DPCE  was  already  an 
existing  market  leader  with 

Continued  on  next  page 

INPUT 


^ The  Solution  was  to  acquire  the  leaders 
and  unite  them  to  form  a new  leader  ^ 


4 


Service  UcKjate 


Granada  . . .from  page  3 

multinational  operations 
extending  to  the  USA. 

• Following  these  acquisitions 
Granada  decided  that  opera- 
tions in  Germany  were  still 
too  small.  Therefore  in 
October  1988  Granada  ac- 
quired WIGO,  one  of  the 
largest  independent  mainte- 
nance companies  in  Ger- 
many. 

Following  this  chain  of  acquisi- 
tions of  previous  market  lead- 
ers, Granada  achieved  its  objec- 
tives, becoming  the  market 
leader  in  Europe  by  a large 
margin.  Further,  by  achieving 
this  level  of  market  dominance, 
Granada  made  it  difficult  for  its 
leadership  position  to  be  chal- 
lenged. Another  TPM  company 
commented  recently  that  after 
the  string  of  Granada  acquisi- 
tions there  was  very  little  left  for 
any  other  company  that  might 
contemplate  similar  acquisi- 
tions. 

Initially  some  of  the  businesses 
acquired  continued  to  trade 
using  their  original  names; 
however,  the  acquired  compa- 
nies now  use  the  name  Granada. 

Granada  Today 

In  achieving  clear  leadership 
within  the  independent  com- 
puter maintenance  market, 
Granada  spent  a total  of  £ 160 
million  on  acquisitions. 

Granada  now  has  operations  in 
nine  European  countries  and, 
through  acquisition  of  DPCE,  in 
Canada  and  the  USA.  The 
extent  of  Granada's  current  ac- 
tivities is  highlighted  in  Exhibit 
C.  Not  only  is  Granada  the  clear 


market  leader  in  Europe  as  a 
whole,  it  is  also  the  leader  in  a 
number  of  countries.  This 
position  gives  the  company  a 
critical  mass  not  previously  seen 
in  the  independent  maintenance 
market.  Granada  claims  a 
number  of  strengths  that  offer 
advantages  to  existing  and 
potential  customers: 

• Financial  strength:  the 
company  is  backed  by  the 
Granada  Group,  which  had 
revenues  of  £ 1.5  billion  and 
pre-tax  profit  of  £ 143  million 
in  1988. 

• Scale  of  operations:  The  large 
size  allows  trained  engineers 
and  spare  parts  to  be  located 
conveniently  close  to  custom- 
ers. Granada  has  over  2,000 
engineers  in  over  100  centres 
and  numerous  customer 


sites.  Granada  also  has  an 
investment  of  £ 30  million  in 
spare  parts — over  150,000 
parts  for  equipment  from 
over  400  manufacturers.  The 
extent  of  Granada's  capabil- 
ity is  illustrated  in  Exhibit  D. 

• Range  of  technical  skills: 
Granada  claims  a depth  and 
range  of  skills  that  are  unsur- 
passed in  Europe.  The 
company  maintains  equip- 
ment from  all  the  leading 
manufacturers  and  a wide 
range  from  the  smaller  manu- 
facturers, as  shown  in  Exhibit 
E.  Many  large  customer  sites 
are  multivendor — an  ex- 
ample quoted  by  Granada  is 
British  Airways,  which  con- 
tains equipment  from  IBM, 
NAS,  Amdahl,  Digital  and 
others. 


INPUT 


e 1989  by  INPUT.  Reproduction  prohibited. 


October  1989 


5 


Exhibit  D 

Scale  of  Operations 

United  Kingdom 

Northern  Europe  j 

• 1800  employees  . 

Southern  Europe 

Operations 

^ • 1200  engineers  ^ 

Operations 

220  employees 
127  engineers 

—Belgium 

- 3 service  centres 

—Holland 

- 1 service  centre 

-Sweden 

♦ 

- 1 service  ,*** 
centre  .*** 


35  service  centres 


OraTiada 
International 


533  employees 
334  engineers 

“ France 

- 25  service  centres 
— Spain 

- 9 service  centres 
•—  Italy 

- 5 service  centres 


Canada 


Mtd-Europe  Operations 

• 170  employees 

• 123  engineers 

— Germany 

- 25  service  centres 

- Switzerland 

- 1 service  centre 


Exhibit  E 


Over  400  Manufacturers’  Equipment 
Maintained — Including 


/ Tl 

/ EMI 

/ MODCOMP 

COMPAREX  \ 

CIPHER  \ 

PRIME  \ 

/ APPLE  / APOLLO 

I BENSON 

INTAGRAPH  \ 

PLESSEY  \ 

MAXTOR  \ 

/ CASE 

/ UNISYS 

1 BASF 

OLIVETTI 

1 NOKIA  \ 

STC  \ 

/ BBC 

/ CANON 

/commodore 

MITSUBISHI 

1 PERTECH  \ 

SI  \ 

/ NCR 

/ CALCOMP  1 

TELEX 

DECISION 

DATA 

IVERSATEC 

\ RACAL  \ 

\ MILGO  \ 

/ HITACHI  / 

HEWLETT-/ 

PACKARD  / 

FUJITSU 

ERICSSON 

1 SIEMENS 

\ REUTERS  \ 

^ DATA 

GENERAL 

CONTROL  / 

DATA  / 

XEROX 

BULL 

IBM  / 

NAS  / 

AMDAHL 

DEC 

\ ICL 

\ WANG 

© 1989  by  INPUT.  Reprodudlon  prohibited. 


Continued  on  next  page 

INPUT 


Service  Update 


Exhibit  F 

The  Strengths  of  Granada 

• Financial 

« international  operations 

• Technical  Skills 

• infrastructure 

• Commitment  to  quality 

Granada  . . .from  page  5 

• Infrastructure  invest- 
ment: Included  here  is 
investment  in  systems 
that  tightly  monitor  the 
movement  of  parts  and 
engineers,  thus  ensuring 
high-quality  service  to 
the  customer.  The  infra- 
structure also  includes 
repair  facilities  (such  as 
clean  rooms)  and  invest- 
ment in  training.  An 
example  quoted  is  the 
training  centre  in  Fenton, 
which  has  seven  classrooms 
and  is  extensively  equipped 
with  sophisticated  equipment 
for  "hands-on"  training,  in- 
cluding a 3090  simulator  for 
training  on  IBM  3090  com- 
puter systems.  Engineers 
spend  up  to  four  weeks  per 
year  refreshing  and  supple- 
menting skills  at  training 
centres  in  the  UK,  France, 

The  Netherlands  and  Ger- 
many. 

• Commitment  to  quality:  the 
company  is  committed  to 
ensuring  that  quality  stan- 
dards are  established,  moni- 
tored and  maintained.  Qual- 
ity is  claimed  to  be  a priority 
motivation  related  to  systems 
and  training  investment. 

The  strengths  of  Granada  are 

summarised  in  Exhibit  F. 

The  company  intends  to  do 

what  is  does  best,  for  example: 

• Total  systems  maintenance 
for  large  multivendor  ac- 
counts 

• High-quahty,  cost-effective 
solutions  for  single  vendor 
users 

INPUT 


• As  the  industry  leader, 
support  for  other  industry 
participants,  such  as: 

- Offering  a ready-made 
network  for  smaller 
OEMs,  VARs  and  systems 
integrators. 

- Offering  parts  repair  and 
training  to  smaller  special- 
ist-niche independent 
maintenance  companies 

Future  Directions 

For  the  future  Granada  plans  to 
continue  geographic  expansion 
and  to  develop  its  range  of 
related  service  as  a complemen- 
tary activity  to  the  core  business 
of  hardware  maintenance. 

Geographic  expansion  is  likely 
to  be  in  two  forms: 

• Increased  market  share 
outside  the  UK  to  bring  the 
rest  of  Europe  more  in  line 
with  the  UK  market  presence 

• Increased  market  share  in  the 
North  American  market, 
particularly  to  develop  a 
larger  presence  in  the  USA 


© 1989  by  INPUT.  Reproduction  prohibited. 


The  method  of  achieving 
these  continued  growth 
patterns  is  not  clear  but, 
based  on  the  process  that 
created  Granada,  it  would 
be  both  naive  and  prema- 
ture at  this  stage  to  rule  out 
further  acquisitions.  How- 
ever, with  the  position  of 
dominance  already 
achieved,  a combination  of 
acquired  and  organic 
growth  may  be  appropriate. 

In  terms  of  developing  re- 
lated services,  Granada 
would  seem  well  positioned 
because  it  has  a presence  al- 
ready established  in  some  areas. 
The  areas  covered  by  these 
related  services  include: 

• Disaster  Recovery:  through  a 
subsidiary,  acquired  as  part 
of  DPCE,  Granada  currently 
has  a presence  in  this  market 
sector:  Computer  Disaster 
Recovery  (CDR)  is  already 
well  established  in  the  UK. 
This  company  has  already 
begun  a European  expansion 
programme  and  offers  disas- 
ter recovery  services  in  the 
mobile  sector  of  the  market. 

• Network  Design  and  Installa- 
tion: Granada  offers  a con- 
sultancy service  for  users 
designing  wide-area  net- 
worl^  (WANs)  and  local-area 
networks  (LANs).  This 
service  can  be  supplemented 
with  a cabling,  installation 
and  maintenance  capability. 

• Installation  and  Deinstalla- 
tion: Granada  provides  these 
services  for  users,  manufac- 
tures, brokers  and  lessors. 

• Features  and  Upgrades: 
Granada  offers  a service  for 
which  the  key  is  flexibility. 


October  1989 


7 


Granada  would  source  the 
parts  required  to  enhance 
and  upgrade  machine  per- 
formance within  constraints 
defined  by  customers. 

• Brokerage:  this  service  can 
take  two  forms.  The  first  is  a 
traditional  brokerage  service 
offered  through  DPCE  prod- 
ucts. The  second  is  a com- 
puter exchange,  which  is  a 
new  computer-based  infor- 
mation service  available  to 
users  and  intermediaries. 


• System  Software  Support: 
Granada  has  an  expanding 
operating  system  software 
service  to  assist  users  in 
installing  software  upgrades 
and  in  diagnosing  problems 
with  operating  systems 
software. 

However,  one  major  question 
remains  unanswered — what  are 
Granada's  next  acquisition 
targets  and  in  which  sector  of 
the  market  will  they  be  located? 


Worldwide 
Restructuring 
at  NCR 

Announcement  of  finan- 
cial downturns  seem 
fairly  commonplace  among  the 
major  multinational  computer 
companies,  particularly  as  the 
market  in  the  USA  remains 
"soft".  The  announcement  by 
NCR  that  first-half  revenues 
were  flat  at  $2780  and  that  net 
profits  were  down  8%  is  more  a 
characteristic  of  the  market  than 
a reflection  of  the  company's 
performance.  However,  NCR 
has  responded  by  announcing 
reorganisation  of  the  company 
into  two  new  groups — the 
Direct  and  Indirect  divisions. 

The  groups  are  a reflection  of 
the  company's  marketing 
strategy  and  comprise  an  Inte- 
grated Systems  Group,  which 
will  provide  integrated  systems 
solutions  for  end  users,  and  a 
General  Purpose  Products 
Group,  which  will  provide 
general-purpose  computer 
products  for  NCR  and  third- 
party  integrators. 


The  Integrated  Systems  Group 
will  operate  through  the  NCR 
direct  sales  force  and  will 
consist  of  five  divisions,  includ- 
ing a new  Self-Service  Systems 
Division  based  in  Dundee, 
Scotland.  Other  divisions 
within  this  group  include  a new 
Financial  Systems  Division  in 
North  America;  the  systems  en- 
gineering facility  based  in  the 
Netherlands;  a new  Office  Infor- 
mation Systems  Division  based 
in  the  USA;  and  the  Retail  Sys- 
tems Division  based  in  North 
America.  The  General  Purpose 
Products  Group  will  focus  on 
the  development  of  general- 
purpose  processors  and  systems 
to  be  used  by  major  accounts  as 
well  as  OEM  customers,  resell- 
ers, distributors  and  independ- 
ent software  vendors.  A new 
Workstation  Products  Division 
is  included  in  this  group  and 
will  include  the  former  Personal 
Computer  Division. 

As  part  of  the  restructuring, 
NCR  also  created  an  Executive 
Committee  whose  purpose  is  to 
review  organisational  strategies 
and  corporate  projects.  ■ 


© 1989  by  INPUT.  Reproduction  prohibited. 


New  Hewlett- 
Packard  Software 
Distribution 
Technology 


H'  -f  ewlett-Packard  is  imple- 
menting  new  technology 
m me  distribution  of  software. 
The  company  will  start  distrib- 
uting software  for  its  3000 
range  of  products  through  the 
medium  of  CD-ROM.  HP 
claims  to  be  the  first  user  of 
CD-ROM  technology  in  the 
software  distribution  field  and 
plans  to  distribute  a range  of 
software  that  will  include 
operating  system  updates.  The 
programme  termed  Laser 
Release  will  include  software 
installation  tools  and  a CD- 
ROM  drive  that  will  ship  in 
October  this  year.  ■ 


Snippets 

❖ Granada  Computer  Services 
will  be  servicing  Commo- 
dore Business  Machines' 
new  warranty  in  the  UK. 
Commodore  is  now  offering 
one  year's  free  on-site  main- 
tenance for  its  range  of  per- 
sonal computers  (excluding 
the  Amiga);  the  service  will 
be  provided  by  Granada. 

❖ The  French  software  and 
services  company  Concept 
Group  SA  continues  to 
expand.  Previously  the 
group  had  acquired  two 
leading  third-party  mainte- 
nance companies  in  France, 
Spectral  and  MIS,  making 
the  group  a leading  Euro- 
pean company  in  this  market 
sector.  The  Concept  Group, 
through  its  subsidiary  Tech- 

Continued  on  next  page 

INPUT 


Service  Update  | 


8 


Snippets.  .from  page  7 

nic  Informatique,  has  now 
acquired  a 75%  holding  in  the 
Dutch  software  group  Hol- 
land Automation  Interna- 
tional. Holland  Automation, 
with  an  expected  turnover  of 
$1 1 million  this  year,  pro- 
vides an  integrated  interna- 
tional range  of  financial  and 
administrative  software 
packages.  Concept's  subsidi- 
ary Technique  Informatique 
will  nominally  manage 
Holland  Automation.  The 
remaining  25%  of  shares  will 
continue  to  remain  with  the 
Holland  Automation  board. 

❖ In  the  UK,  IBM  has  an- 
nounced that  most  hardware 
prices  will  increase  by  5% 
and  software  prices  by 
between  8%  and  10%.  The 
company  claims  that  the 
price  increases  are  due  to 
rising  costs  and  the  falling 
value  of  the  pound  (£) 
against  the  US  dollar.  A 5% 
price  increase  is  applicable  to 
most  hardware  products 
effective  from  21  August; 
products  excluded  from  the 
increase  include  the  PS/2 
laptop  and  Model  70, 4381 
and  9370  processors.  Price 
increases  for  software  are 
also  effective  from  21  August 
on  One  Time  Charge  and 
Program  Package  software; 
monthly  software  charges 
increase  effective  1 Septem- 
ber. IBM  Licensed  Programs 
or  Program  Products  will 
increase  by  generally  8%, 
while  monthly  and  One-Time 
charges  will  increase  by  10%. 
Software  price  increases 
affect  a variety  of  products, 
including  S/34  System 
Support  Programs  and 

INPUT 


Utilities,  S/36  System  Sup- 
port Programs  and  most  AS/ 
400  products. 

❖ Commodore  in  the  USA  is 
restructuring  and  expanding 
its  third-party  support  op- 
erations, part  of  the  initia- 
tives being  implemented 
following  appointment  of  Mr 
Henry  Copperman  as  presi- 
dent earlier  this  year.  The 
number  of  staff  involved  in 
applications  and  providing 
technical  support  for  third 
parties  will  double;  in  addi- 
tion, these  activities  will 
report  directly  to  the  presi- 
dent (previously  they  were 
part  of  the  Research  and 
Development  Division). 
Further  developments 
planned  include  the  creation 
of  a developer's  advisory 
board,  a global  communica- 
tion network,  more  active 
participation  in  third-party 
projects  and  the  provision  of 
marketing  in  addition  to 
technical  support  to  third 
parties.  The  company  also 
wants  to  be  in  a position  to 
offer  a wider  range  of  soft- 
ware, particularly  in  the 
business  market.  Commo- 
dore also  has  its  eyes  on 
Europe  as  a target. 

❖ IBM  ambitions  in  the  US 
service  market  have  been 
enhanced.  Automatic  Data 
Processing  Inc.  of  New 
Jersey  has  signed  a multiyear 
agreement  for  IBM  to  pro- 
vide site  preparation,  instal- 
lation, maintenance  and 
support  services  to  ADP's 
Brokerage  Service  clients. 
Previously  these  services 
were  provided  directly  by 
Automatic  Data  Processing. 


Following  in  the  footsteps  of 
some  of  its  colleagues  in  the 
industry.  Sun  Microsystems 
has  implemented  a hiring 
freeze  on  non-revenue-gener- 
ating areas  within  the  com- 
pany. This  freeze  is  in  reac- 
tion to  recent  downturns  in 
profitability  and  will  become 
effective  on  1 July.  This 
move — which  is  being  intro- 
duced together  with  cutbacks 
in  travel  expenses  and  other 
discretionary  spending — will 
remain  in  force  for  three 
months  at  least. 


❖ In  more  disaster  recovery 
activity  within  the  UK,  the 
Criterion  Group  has 
launched  a disaster  recovery 
service  for  IBM  S36  banking 
community  users  in  the  City 
of  London,  the  heart  of  UK's 
financial  world. 


❖ FKI  Data  Recording  Group 
has  acquired  Nationwide 
Systems  Engineering,  a 
maintenance  company,  from 
Norbain  Electronics.  Follow- 
ing the  acquisition,  Newbury 
Data  Maintenance,  an  au- 
tonomous business  unit 
within  the  group,  will  have  a 
total  of  120  employees.  This 
acquisition  could  signal  a 
tumround  for  a group  that,  in 
June  1988,  was  acquired  by 
FKI  Babcock  for  the  sum  of  £1 
(one  pound).  Restructuring 
of  the  group  could  result  in 
further  acquisitions. 

❖ Unisys  has  joined  other 
companies  in  announcing  a 
salary  and  hiring  freeze.  The 
salary  freeze  will  remain  in 
force  at  least  until  the  end  of 
the  year,  whereas  the  hiring 
freeze  is  currently  indefinite. 
Other  cost-cutting  plans  are 


© 1989  by  INPUT.  Reproduction  prohibited. 


October  1989 


9 


News  from  the  USA 

Spotlight  on  “VAM/Surety”:  Unisys’ 
New  VAR  Incentive  Program 


in  progress,  including  reduc- 
tions in  second-half  budgets 
for  R&D,  capital  expendi- 
tures, administration  and 
travel  expenses. 

❖ In  an  attempt  to  bypass  a UK 
shortage  of  skills,  ICL  has 
plans  to  launch  a new  train- 
ing centre  near  Dublin.  The 
Republic  of  Ireland  is  said  to 
have  the  highest  proportion 
of  computer  science  gradu- 
ates in  the  EEC.  A focal 
point  of  the  new  training 
centre  will  be  UNIX 
courses.* 


News  from  the  USA 


It  appears  that  Sun  Microsys- 
tems' customer  service  strat- 
egy will  be  following  the 
company's  product  strategy: 
rather  than  competing  head  to 
head  with  third-party  mainte- 
nance organizations  (or  clone- 
makers),  the  workstation  ven- 
dor will  be  seeking  partnership 
with  a number  of  third-party 
service  vendors  to  augment  its 
own  customer  services,  which 
have  a reputation  for  providing 
inadequate  support. 

A recent  issue  of  Business  Week 
quotes  Carol  Bartz,  vice-presi- 
dent of  Sun  Microsystems' 
customer  service  division,  as 
saying  that  the  company 
"(doesn't)  intend  to  build  a 
dinosaur  service  group"  now 
that  margins  on  maintenance 
service  seem  to  be  shrinking. 
Instead,  the  company  will  be 


In  recognition  of  the  growing 
importance  of  alternate  dis- 
tribution channels  in  the  mar- 
keting strategies  of  information 
systems  companies,  Unisys  is 
gearing  up  to  introduce  a 
revised  VAR  incentive  pro- 
gramme to  help  increase  sales  of 
its  maintenance  services. 

Similar  to  IBM's  Remarketer 
Plan,  Unisys'  VAM  (Value- 
Added  Marketer)/SURETY 


forging  alliances  with  TPMs  in  a 
program  it  expects  to  launch 
quietly  by  the  end  of  this  year. 
The  company  currently  makes 
documentation  and  spare  parts 
readily  available  to  third  parties, 
but  has  not  formalized  any 
relationships. 

Quite  a few  TPMs  have  made 
overtures  to  Sun  already,  and 
the  company  is  beta  testing 
vendors  to  narrow  the  list  of 
candidates. 

Word  has  it  that  Sun  has  also 
approached  OEM  manufactur- 
ers about  providing  support  for 
Sun  products.  Sun  provides 
backbone  support  to  resellers  of 
Sun  systems,  but  could  be  trying 
to  shift  more  of  the  support 
burden  to  large  resellers  with 
more  extensive  customer  sup- 
port capabilities.  ■ 


consists  of  two  programmes. 

The  Referral  Program  allows  the 
reseller  to  act  as  an  agent  for 
Unisys  customer  service,  selling 
contracts  for  a one-time  25% 
commission.  Unisys  handles  ac- 
counts receivable  and  billing, 
and  provides  all  maintenance 
services.  The  Remarketer 
Program  is  available  for  more- 
sophisticated  VARs  with  sup- 
port capabilities  of  their  own. 
Unisys  sells  the  maintenance 
contract  to  the  dealer  at  a 25% 
discount;  the  dealer  then  resells 
to  the  end  user,  typically  in 
combination  with  the  dealer's 
specialized  services.  Dealers 
must  exhibit  high  customer  sat- 
isfaction in  order  to  qualify  for 
the  program,  and  they  must  set 
up  a help  desk  to  take  initial 
calls  to  screen  software  and 
operator  problems.  These 
dealers  are  held  to  a quota  of 
$25,000  per  year  in  cumulative 
maintenance  sales  (which 
amounts  to  approximately  12-13 
contracts).  Unisys  is  still  re- 
sponsible for  all  administrative 
transactions,  but  plans  to  shift 
those  responsibilities  to  the 
remarketers  eventually. 

Sales  through  VAR  channels 
account  for  $300  million,  or 
about  10%  of  Unisys'  total  sales. 
Previous  Unisys  VAR  incentive 
programmes,  consisting  of  a 
12%  commission  and  a 9% 
advertising  fee,  have  not  been 
effective  in  boosting  sales  of 
Unisys  contracts.  With  VAM/ 
SURETY — planned  for  availabil- 
ity in  September  1989 — ^Unisys 
hopes  to  achieve  more  market 
penetration  through  its  dealer 
channels.  ■ 


Sun  Microsystems  to  Partner 
with  Third-Party 
Maintenance  Organizations 


© 1 989  by  INPUT.  Reproduction  prohibited. 


INPUT 


10 


Service  Update 


News  from  the  USA 

Update  on  Control  Data  Corporation 


Control  Data  Corporation's 
business  has  undergone 
major  changes  of  late — ^and 
that' s an  understatement. 

After  closing  its  ETA  Systems 
supercomputer  operation  and 
streamlining  its  Cyber  main- 
frame business  in  April  (ap- 
proximately 3,100  jobs  were 
cut),  CDC  sold  its  Control  Data 
Institute  and  Institute  for  Ad- 
vanced Technology  education 
units  to  newly  formed  Human 
Capital  Corporation  (Edina, 

MN)  for  an  undisclosed 
amount.  Earlier  in  March,  CDC 
sold  its  European  Control  Data 
Institutes  to  Australian-based 
Computer  Power  Group  Ltd. 

In  May,  CDC  sold  its  Action 
Data  Services  unit,  which 
provided  data  processing  and 
support  products  to  financial 
institutions,  to  PRIMERICA  (St. 
Louis,  MO).  In  June,  CDC 
announced  the  sale  of  its  suc- 
cessful data  storage  products 
subsidiary,  IMPRIMIS,  to 
leading  disk  drive  manufacturer 


Seagate  Technology  (Scotts 
Valley,  CA)  for  $450  million. 

The  data  storage  unit,  which 
had  posted  $1 .5  billion  in  reve- 
nue for  1988,  provided  nearly 
one-third  of  CEXl's  total  sales. 
June  also  saw  the  sale  of  CDC's 
European  third-party  mainte- 
nance arm  to  Thomainfor,  a 
subsidiary  of  Thomson-CSF  of 
France  (although  maintenance 
of  Cyber  products  will  continue 
to  be  performed  by  CDC). 
INPUT  profiled  the  Thomainfor 
acquisition  in  the  last  issue  of 
Service  Update. 

In  July,  CDC  announced  that  it 
had  signed  a letter  of  intent  to 
sell  the  remainder  of  its  training 
and  education  business  to 
Chicago-based  William  R Roach 
& Associates.  CDC  plans  to 
retain  a 20%  interest  in  the  new 
company  being  formed  by 
Roach  & Associates. 

CDC's  poor  financial  perform- 
ance in  1985  and  1986  (which 
resulted  in  losses  of  $832  mil- 
lion), in  addition  to  competitive 


pressures  within  the  mainframe 
computer  market,  have  necessi- 
tated this  major  restructuring 
and  flurry  of  asset  sales.  CEfc 
was  able  to  head  off  a technical 
default  on  its  existing  loans 
earlier  this  year,  but  a restruc- 
turing charge  of  $490  million 
leaves  the  company  with  less 
cash  to  restore  its  data  systems 
business  and  expand  its  systems 
integration  base.  More  asset 
sales  are  likely,  and,  keeping  in 
mind  CDC's  announced  inten- 
tion to  sharpen  its  focus  on  data 
systems  and  data  processing 
businesses,  prime  candidates 
should  include  CDC's  US-based 
third-party  maintenance  group. 

INPUT  estimates  that  CDC's 
maintenance  revenues  declined 
slightly  from  $400  million  in 
1987  to  $395  million  in  1988. 
Third-party  maintenance  reve- 
nues had  increased  slightly  last 
year,  but  this  increase  was  offset 
by  a decrease  in  maintenance 
revenue  for  CDC's  Cyber 
products.  ■ 


News  from  the  USA 

Unisys  Introduces  “ 
Integrated  Services 

In  June,  Unisys  launched  an 
integrated  hardware  and 
software  support  programme 
for  the  company's  fast-growing 
UNIX-based  U Series  systems. 

Called  "SURETY",  the  single- 
contract service  offering  pro- 


Surety”: 

for  the  UNIX  U Series  Systems 


vides  four  levels  of  support: 
Intro,  a centralized  telephone 
support  (1-900  number)  service; 
Basic,  offering  integrated  H W / 
SW  telephone  support,  elec- 
tronic bulletin  board  services, 
full  parts  replacement,  carry-in 
service  and  preferred  rates  on 


Unisys  supplies;  BasicPlus, 
including  Intro  and  Basic  serv- 
ices, toll-free  telephone  support, 
preventive  maintenance,  on-call 
hardware  and  software  support, 
hardware  reliability  enhance- 
ments, new  software  releases, 
and  preferred  rates  on  environ- 


INPUT 


© 1989  by  INPUT.  Reproduction  prohibited. 


October  1 989 


11 


mental  products;  and  Com- 
prehensive, including  all 
services  listed  above  as 

Exhibit  G 

Surety  Service  Offerings 

well  as  installation  services, 
guaranteed  response  time. 

Intro 

Basic 

BasicPIus 

Comprehensive 

guaranteed  telephone 
access,  and  on-call  service 
beyond  the  principal 
period  of  maintenance.  All 
levels  of  service  provide 
free  installation,  and 
coverage  is  restricted  to 
Monday  through  Friday,  8 
a.m.  to  5 p.m.  local  time. 
Exhibit  G shows  the  service 
offerings  available  under 

Telephone  Support — 

Hardware  & Software 

Technical  Assistance 

— 1-900  Call 

— 1-800  (Toll-Free)  Call 

Trouble  Ref>orting 

— 1-900  Call 

— 1-800  (Toll-Free)  Call 

✓ 

✓ 

✓ 

✓ 

✓ 

✓ 

✓ 

✓ 

surety's  programs. 

Electronic  Bulletin  Board  (License) 

‘ 

✓ 

✓ 

Pricing  is  determined  by 
the  system  configuration. 

At  the  low  end.  Intro 

Remedial  Services — 

Hardware  & Software 

services  for  the  U5000/30B 
(which  supports  16  users) 
is  charged  at  a monthly 
rate  of  $40,  while  Compre- 
hensive services  for  the 

Essential  Engineering  Changes 
Replacement  Parts 

Carry-In/Ship-In  Service 

Reliability  Enhancements 

Software  Maintenance  Releases 

✓ 

* 

‘ 

✓ 

* 

‘ 

✓ 

✓ 

✓ 

✓ 

✓ 

✓ 

same  system  cost  $270.  At 
the  high  end,  the  Compre- 
hensive coverage  monthly 
maintenance  charge  for  a 
U5000/90B  system  (which 
supports  over  32  users)  is 
$762  and  $1535  for  the 
U7000/40. 

On-Call  Sen/ice 

— Principal  Period  of  Maintenance 
(8  am  - 5 pm) 

— Your  Hours 

Guaranteed  Response  Times 

— On-Call  Hardware  Service 

* 

* 

. 

. 

✓ 

. 

✓ 

— Telephone  Support  (8  am  - 5 pm) 

✓ 1 

Unisys  plans  to  release 
SURETY  for  the  PC/PW 

Special  Services 

series  in  the  fourth  quarter, 
and  for  the  remaining 
product  lines  in  the  first 
half  of  1990.  SURETY 

Preventive  Maintenance 

Installation 

On-Site  Operations  Reviews 

* 

* 

* 

* 

• 

• 

✓ 

* 

* 

✓ 

✓ 

✓ 

doesn't  yet  apply  to  third- 
party  products  integrated 
with  Unisys  systems,  but 
plans  are  being  considered 
to  extend  SURETY  cover- 
age to  products  under  mul- 
tivendor service  contracts. 

Preferred  Pricing 

Unisys  Supplies 

Education 

Environmental  Products 

✓ 

✓ 

✓ 

✓ 

✓ 

✓ 

✓ 

✓ 

✓ Features  included  in  Unisys  Surety 

* Available  on  a fee  basis.  PPM  labor  at  preferred  rates. 


Software:  Systems  and  environmental  software.  Applications  software  covered  separately. 


e 1989  by  INPUT.  Reproduction  prohibited. 


INPUT 


About  INPUT 


INPUT  provides  planning  information,  analysis,  and  recommendations 
to  managers  and  executives  in  the  information  processing  industries. 
Through  market  research,  technology  forecasting,  and  competitive 
analysis,  INPUT  supports  client  management  in  making  informed 
decisions. 

Continuous-information  advisory  services,  proprietary  research/ 
consulting,  merger/ acquisition  assistance,  and  multiclient  studies  are 
provided  to  users  and  vendors  of  information  systems  and  services 
(software,  processing  services,  turnkey  systems,  systems  integration, 
professional  services,  communications,  systems /software 
maintenance  and  support). 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior 
management  positions  in  operations,  marketing,  or  planning.  This 
expertise  enables  INPUT  to  supply  practical  solutions  to  complex 
business  problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a 
leading  international  research  and  consulting  firm.  Clients  include  more 
than  100  of  the  world's  largest  and  most  technically  advanced 
companies. 


INPUT  OFFICES 


North  America 

Headquarters 
1280  Villa  Street 
Mountain  View,  CA  94041-1194 
(415)  961-3300 

Telex  171407  Fax  (415)  961-3966 
New  York 

959  Route  46  East,  Suite  201 
Parsippany,  NJ  07054 
(201)  299-6999 

Telex  134630  Fax  (201)  263-8341 

Washington,  D.C. 

1953  Gallows  Road 

Vienna,  VA  22182 

(703)  847-6870  Fax  (703)  847-6872 


International 

Europe 

Piccadilly  House 
33/37  Regent  Street 
London  SWIY  4NF,  England 
(01)  493-9335 

Telex  27113  Fax  (01)  629-0179 
Paris 

52,  boulevard  de  Sebastopol 
75003  Paris,  France 

(33-1)  42  77  42  77  Fax  (33-1)  42  77  85  82 
Tokyo 

Saida  Building 
4-6,  Kanda  Sakuma-cho 
Chiyoda-ku,  Tokyo  101,  Japan 
(03)  864-0531  Fax  (03)  864-4114 


Route: 


INPUT 

Service 

Update 


© INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — Europe 

March  1989 


IN 

1 .... 

....IBM  Introduces  Common  Checking  Procedures  for  Imported 

THIS 

Equipment 

ISSUE: 

1 .... 

....User  Saves  £500,000  per  Annum  on  Maintenance 

2.... 

....Reorganisation  at  Tekserv 

2.... 

....Restructuring  at  Granada  Computer  Services  (France) 

2.... 

....Maintenance  Insurance — A New  Trend  for  Third-Party 

Maintenance? 

3.... 

....Concept  S.A.  Acquires  M.I.S  and  Spectral  in  France 

3.... 

....IBM  Announces  Serviceplan 

IBM  Introduces  Common  Checking 
Procedures  for  Imported  Equipment... 


IBM  has  agreed  to  establish 
common  checking 
procedures  for  all  equipment 
imported  from  the  U.S.  that 
requires  conversion  from  60Hz 
to  50Hz.  This  move  came  as  a 
result  of  complaints  made  by 
Eclat  (the  European  Leasing 


Association)  to  IBM  about 
differences  across  countries  with 
regards  to  the  attitude  of  IBM 
engineers  checking  equipment 
that  has  been  converted.  Since 
IBM  requires  these  checks  to  be 
made  by  its  engineers  before  IBM 
agrees  to  maintain  the 


equipment,  IBM  has  agreed  to 
set  up  common  procedures  and 
guidelines  to  be  followed  by 
IBM  engineers  across  Europe  to 
avoid  differences  in  the 
standard.  ■ 


User  Saves  £500,000  per  Annum  on  Maintenance  ... 


HFC  Bank  Pic  has  consid- 
erably cut  its  maintenance 
costs  by  replacing  its  IBM  4381 
mainframe  with  the  190  IBM 


AS/400.  John  Hogan,  MFCs  DP 
Manager,  told  INPUT  that  the 
bank  was  able  to  save  considera- 
bly (about  £500,000  per  annum) 


on  maintenance  because  the 
new  equipment  needs  less 
maintenance  than  the  old  IBM 


ConXinued  on  Page  2 


Service  Update 


User  Saves.  .from  page  1 

4381.  However,  he  also  said 
that  the  main  part  of  the  sav- 


ings came  from  software  support, 
which  on  the  AS/400  is  a one- 
time charge.  In  updating  its  com- 
puter system,  HFC  is  also  plan- 


ning to  acquire  1,600  PS/2s  that 
will  be  networked  to  the  AS/ 
400.  ■ 


Restructuring  at  Granada  Computer 
Services  (France) ... 


Reorganisation 

at 

Tekserv ... 

In  a recent  reorganisation  of 
Tekserv — the  third-party 
maintenance  arm  of  MAI  Basic 
Four — the  European  head- 
quarters of  the  company  was 
closed.  Tekserv's  new  head- 
quarters is  based  in  California, 
U.S.A.  and  operates  under  the 
name  of  NACS  (North  Ameri- 
can Customer  Services).  Euro- 
pean subsidiaries  now  operate 
on  national  levels,  reporting 
directly  to  the  American  head 
office.  ■ 


The  French  subsidiary  of 

Granada  Computer  Services 
has  been  reorganised  to  form 
four  divisions  within  the  com- 
pany. This  move  follows  the 
company's  acquisition  of  four 
companies — namely  SEMSI,  spe- 
cialising in  environmental  plan- 
ning and  services;  INTERSYS- 
TEM, a company  offering  mainte- 
nance insurance  contracts  to  IBM 
users;  INFOMAT,  a third-party 
maintenance  company  speciali- 
sing in  the  maintenance  of  bank- 
ing equipment;  and  DPCE 
(France),  a TPM  vendor  and  com- 


petitor of  Granada  before  the 
acquisition  of  DPCE  by  the 
Granada  Group. 

The  restructuring  of  the  com- 
pany now  includes  four  princi- 
pal activities: 

1 . Third-party  maintenance  on 
a wide  range  of  equipment, 
including  mainframes,  PCs 
and  peripherals 

2.  Maintenance  of  banking 
equipment — ATMs, 

EFTPos,  etc. 

3.  Maintenance  insurance 

4.  Environmental  services  ■ 


Maintenance  Insurance— 

A New  Trend  for  Third-Party  Maintenance? 


Maintenance  insurance 

contracts  allow  users  to 
cover  the  cost  of  maintaining 
their  computer  equipment 
without  having  a contract  with 
a "dedicated"  service  vendor. 

A maintenance  insurance  policy 
is  therefore  very  similar  to  most 
other  insurance  policies.  There 
is,  however,  one  difference:  a 
maintenance  insurance  contract 
is  not  sold  through  large  insur- 
ance companies  and  their  bro- 
kers, but  by  companies  that 
specialise  in  selling  such  con- 
tracts. Customers  that  have 
maintenance  insurance  call  the 
equipment  manufacturer  on  a 
time  and  materials  basis,  and 


settlement  of  the  account  be- 
comes the  responsibility  of  the  in- 
surance vendor. 

One  of  the  unique  characteristics 
of  the  maintenance  insurance 
vendors  is  that  they  are  neither  a 
TPM  nor  a manufacturer  and 
although  they  have  technical 
expertise,  they  do  not  offer  on- 
site support  services.  It  should 
be  noted  that  with  the  exception 
of  Granada  Computer  Services 
(France),  maintenance  insurance 
is  currently  offered  only  to  IBM 
equipment  users. 

One  of  the  pioneers  of  mainte- 
nance insurance  was  the  Swiss 


company  Mutual  Maintenance 
Computer  (MMC).  Founded  in 
1982,  the  company  set  out  to 
offer  IBM  users  maintenance 
contracts  priced  30%  lower 
than  the  IBM  prices.  In  1984, 
MMC  opened  a French  subsidi- 
ary that  by  1988  had  1,200 
clients  and  turnover  of  50  MFF 
(approximately  $8  million). 
Other  players  in  this  market  are 
Alphadis  and  Intersystem  (now 
acquired  by  Granada  Computer 
Services).  With  the  acquisition 
of  Intersystem,  Granada  Com- 
puter Services  in  France  is  now 
the  first  third-party  mainte- 
nance company  to  offer  its  cus- 
tomers the  choice  of  manufac- 


© 1989  by  INPUT.  Reproduction  Prohibited. 


INP 


March  1989  3 

turePs  service  or  third-party 
service. 

It  is  interesting  to  note  that  by 
and  large  maintenance  insur- 
ance vendors  have  a much  more 

prominent  presence  in  France 
than  in  any  other  European 
country.  INPUT'S  investigation 
into  the  reasons  for  this  has 
shown  that  it  is  primarily  a result 
of  users'  preference  for  manufac- 

turer  service.  The  combination 
of  offering  manufacturer 
service  as  well  as  attractive 
pricing  has  been  the  essence  of 
success  for  maintenance  insur- 
ance vendors.  ■ 

Concept  S.A.  Acqui 

'’T^  wo  of  France's  major  TPM 

A companies.  Spectral  and 

MIS,  have  recently  received  an 
offer  for  acquisition  by  the 

French  software  and  services 
company  Concept.  Concept's 
principal  sector  of  activity  has 
been  within  the  banking  and 

res  M.I.S.  and  Spectr 

finance  sector.  Given  both  TPM 
companies'  strong  bias  toward 
the  maintenance  of  banking 
equipment,  the  acquisition  of 

MIS  and  Spectral  is  an  extension 
of  the  services  currently  offered 
by  Concept. 

al  in  France... 

MIS  revenues  in  1988  totalled 

65  MFF,  and  Spectral,  the 
number-one  French  TPM 
vendor,  had  a turnover  of  over 

120  MFF.  ■ 

U.S.  COMMENTARY 


IBM  Announces  Serviceplan... 


IBM  has  recently  announced 
a new  service  offering — 
Serviceplan — aimed  at  consoli- 
dating all  IBM  service  offerings 
into  one  contract,  thus  provid- 
ing customers  with  savings  op- 
portunities, including  the 
option  of  reducing  administra- 
tive costs  through  single  invoice 
estimated  billing. 

Serviceplan  offers  customers  the 
full  range  of  IBM  services  from 
a one-page  document  featuring 
an  icon-style  menu.  Serviceplan 
gives  customers  the  option  of 
receiving  one  bill  for  services 
based  on  a joint  estimate  with 
IBM  of  projected  maintenance 
needs.  This  option  allows  cus- 
tomers to  establish  an  estimated 
bill  for  aU  their  equipment  on  a 
yearly  basis.  The  estimated 
charge  will  not  be  changed 
unless  a variance  in  machine 
quantities  or  services  to  be  per- 


formed reaches  a specific  thresh- 
old. Payments  are  made  in 
quarterly  or  monthly  in- 
stalments. Serviceplan  is  thus 
offered  to  users  as  a master 
contract,  eliminating  most  paper- 
work by  calling  for  one  customer 
signature.  Estimated  billing  wiU 
be  made  available  to  all  custom- 
ers as  part  of  a phased  implem- 
entation continuing  throughout 
1989. 

In  addition,  Serviceplan  elimi- 
nates the  requirement  that  cus- 
tomers have  an  IBM  processor  or 
ROLM  CBX  to  qualify  for  Net- 
work Support,  formerly  called 
Telecommunications  Services, 
Network  Supp)ort.  Through 
Serviceplan,  customers  may  also 
order  services  provided  by  the 
IBM  Information  Network.  The 
Information  Network  is  a com- 
mercial, value-added  network 
for  the  exchange  of  business 
data. 


IBM  is  now  offering  discounts 
ranging  from  18%  to  30%  on 
new  equipment  maintenance  if 
a user  pays  the  total  in  advance 
for  a three-,  four-  or  five-year 
contract.  This  announcement 
had  been  made  for  the  AS/400 
but  is  now  extended  to  other 
processors  and  is  called 
Extended  Maintenance  Option. 

IBM  also  announced  a new 
remarketer  programme  allow- 
ing customers  to  match  service 
solutions  to  their  specific  needs 
in  two  ways.  The  first  is  that 
customers  may  order  IBM 
services  directly  from  IBM 
Authorised  Remarketers.  The 
second  allows  customers  to 
order  IBM  services  that  have 
been  supplemented  by  Au- 
thorised Industry  Remarketers 
through  their  service  offerings 
to  meet  highly  specialised 
customer  requirements.  ■ 


© 1989  by  INPUT.  Reproduction  Prohibited. 


INPUT 


About  INPUT 


INPUT  provides  planning  information,  analysis,  and 
recommendations  to  managers  and  executives  in  the  information 
processing  industries.  Through  market  research,  technology 
forecasting,  and  competitive  analysis,  INPUT  supports  client 
management  in  making  informed  decisions. 

Continuous-information  advisory  services,  proprietary  research/ 
consulting,  merger/acquisition  assistance,  and  multiclient  studies  are 
provided  to  users  and  vendors  of  information  systems  and  services 
Software,  processing  services,  turnkey  systems,  systems  integration, 
professional  services,  communications,  systems /software 
maintenance  and  support). 

Many  of  INPUT'S  professional  staff  members  have  more  than  20 
years'  experience  in  their  areas  of  specialization.  Most  have  held 
senior  management  positions  in  operations,  marketing,  or  planning. 
This  expertise  enables  INPUT  to  supply  practical  solutions  to 
complex  business  problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a 
leading  international  research  and  consulting  firm.  Clients  include 
more  than  100  of  the  world's  largest  and  most  technically  advanced 
companies. 


INPUT  OFFICES 


North  America 


International 


Headquarters 


Europe 

Piccadilly  House 
33/37  Regent  Street 
London  SWIY  4NF,  England 
(01)  493-9335 

Telex  27113  Fax  (01)  629-0179 


1280  Villa  Street 
Mountain  View,  CA  94041 
(415)  961-3300 

Telex  171407  Fax  (415)  961-3966 


New  York 

Parsippany  Place  Corp.  Center 


29  rue  de  Leningrad 
75008  Paris,  France 
(16)  44-80-48-43 


Paris 


Suite  201 
959  Route  46  East 
Parsippany,  NJ  07054 
(201)  299-6999 

Telex  134630  Fax  (201)  263-8341 


Japan 

FKI,  Future  Knowledge  Institute 
Saida  Building, 

4-6,  Kanda  Sakuma-cho 
Chiyoda-ku, 

Tokyo  101,  Japan 
(03)864-4026  Fax  (03)  864-4114 


Fax  (16)  44-80-40-23 


Washington,  D.C. 

8298  C,  Old  Courthouse  Rd. 

Vienna,  VA  22180 

(703)  847-6870  Fax  (703)  847-6872 


Route: 


INPUT 

Service 

Update 


© INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — Europe 

April  1989 


IN 

THIS 

1 .... 

....Philips  Business  Systems  Enters  the  Third-Party  Maintenance 

Arena 

ISSUE: 

1 .... 

....Rank  Xerox  Executives  Earn  2.5%  Extra 

2.... 

....Apricot  Computers  Increases  Its  Stake  in  DDT  to  29.75% 

2.... 

....Company  Profile:  Geveke  Electronics 

3.... 

....Unisys  Offers  A la  Carte  Services 

Philips  Business  Systems  Enters  the  Third- 
Party  Maintenance  Arena... 


Philips  Business  Systems 
recently  announced  its 
plans  of  entering  the  third- 
party  maintenance  market. 
Although  this  represents  a 
new  move  by  Philips,  the 
company  had  until  now  been 
servicing  equipment  not 


manufactured  by  itself  for 
customers  who  had  Philips 
equipment  under  mainte- 
nance. 

Philips'  third-party  mainte- 
nance activities  will  be  cen- 
tered around  servicing  PCs, 


minis,  ATMs  and  PABXs.  The 
new  division  will  be  headed 
by  Bob  McCoig  whose  main 
responsibilities  will  be  in  the 
marketing  of  customer  service 
and  third-party  maintenance. 


Rank  Xerox  Executives  Earn  2.5%  Extra 


ast  year.  Rank  Xerox 
announced  its  intentions 
to  link  managers'  pay  rises  to 
the  degree  of  customer  satis- 
faction and  customer  loyalty. 
In  order  to  do  this,  over  1,000 
Rank  Xerox  customers  par- 
ticipated in  an  independent 
survey  throughout  Europe. 


Customer  loyalty  was  mea- 
sured by  calculating  the  pro- 
portion of  products  with  cus- 
tomers at  the  start  of  the  year 
which  were  still  with  the 
customers  by  the  year's  end. 

Target  levels  for  customer 
satisfaction  and  customer 
loyalty  were  established  at 


85%,  with  salary  rises  based 
on  the  degree  to  which  this 
benchmark  was  exceeded. 

As  a result  of  this  survey,  135 
Rank  Xerox  executives 
earned  an  extra  2.5%.  The 
success  of  the  scheme  has  led 
Rank  Xerox  to  extend  the 
plan  to  a broader  cross- 
section  of  the  company's 
employees.  ■ 


Service  Update 


Company  Profile:  GEVEKE  ELECTRONICS 


Company  Update 

Geveke  Electronics,  a 
subsidiary  of  the  Dutch 
Getronics  Holdings,  has  been 
operating  as  a third-party 
maintenance  (TPM)  vendor 
in  the  Netherlands  since 
1977.  Geveke  has  concen- 
trated its  efforts  primarily  in 
the  Benelux  market  where  in 
1986  it  opened  its  first  office 
outside  the  Netherlands  in 
Belgium.  Geveke' s plans  are 
to  continue  expanding  in  the 
European  TPM  market.  In 
April  1989,  Geveke  will  be 
opening  a new  subsidiary  in 
Barcelona  (Spain). 

Geveke' s European  TPM 
revenues  in  1988  totalled  $28 
million,  and  the  company 
anticipates  revenues  to 
increase  by  15%  in  1989. 

Maintenance  Operations 

Geveke's  operation  has  400 
service  personnel  dedicated 
to  field  service  operations. 
Geveke  offers  all  types  of 
support  services,  ranging 
from  depot  repair  to  time  & 


materials  and  the  provision  of 
on-site  engineers,  but  over  50% 
of  the  company's  business  is 
derived  from  contract  custom- 
ers. Service  coverage  in  the 
Netherlands  and  Belgium  is 
national  with  six  service 
centres  in  the  Netherlands  and 
four  service  centres  in 
Belgium. 

Although  the  only  service 
offered  by  Geveke  Electronics 
is  maintenance,  through  other 
subsidiaries  of  Getronics, 
Geveke  is  able  to  offer  its 
Dutch  client  base  a wide  range 
of  services.  One  such  service  is 
cabling  and  installation,  pri- 
marily for  networks,  carried 
out  by  Electronic  Engineering. 
Furbex,  another  company  in 
the  Getronics  group,  supplies 
low-cost  service  for  PC  repair 
and  carries  out  tests  and  modi- 
fications as  well  as  offering 
computer  brokerage  and 
refurbishment  services. 

Service  Coverage 

About  55%  of  Geveke's  reve- 
nues are  derived  from  the  IBM 
and  compatible  PC  market- 


place; 20%  from  the  mainte- 
nance of  networks;  15%  from 
peripheral  maintenance;  and 
10%  from  servicing  of  IBM  and 
MAI  minicomputers.  Geveke, 
however,  plans  to  expand  its 
mini  computer  maintenance 
operations  and  will  add  DEC 
(l^crovax)  and  Wang  to  its 
portfolio  in  1989. 

Services  provided  by  Geveke 
include:  planning,  consultancy, 
application  software  support, 
system  software  support, 
network  support,  system 
configuration,  installation  and 
de-installation  services. 

Competitive  Focus 

Geveke  originated  its  third- 
party  offerings  within  the  PC 
compatible  and  network  sup- 
port marketplace  and  contin- 
ues to  maintain  its  primary 
presence  within  this  arena. 
Over  the  past  few  years, 
Geveke  has  expanded  its 
product  menu  to  include 
minicomputers  but  does  not  as 
yet  envisage  entering  the 
mainframe  maintenance 
market. 

Geveke  believes  that  its  suc- 
cess in  TPM  can  be  attributed 
to  its  ability  to  offer  a compre- 
hensive range  of  services 
within  the  Getronics  Group 
without  the  need  for  subcon- 
tracting. 

Geveke  feels  its  primary  com- 
petition is  coming  from  manu- 
facturers, IBM  in  particular. 


Apricot  Computers  Increases  Its 
Stake  In  DDT  to  29.75% 


pricot  Computers 
which  last  year  took  a 
20%  stake  in  the  shares  of 
DDT  Group  has  now  in- 
creased its  share  to  29.75%. 
This  follows  Apricot  Com- 


puters' intentions  to  enter  the 
third-party  maintenance 
market,  although  rumors  of 
Apricot  taking  over  DDT  have 
so  far  been  denied  by  both 
companies.  ■ 


© 1989  by  INPUT.  Reproduction  Prohibited. 


INPl 


April  1989  3 

Geveke  considers  this  compe- 
tition to  be  "unhealthy"  as  it 
involves  an  aggressive  price- 
cutting  policy  by  the  manu- 
facturers to  the  point  where 

profit  margins  can  no  longer 
be  sustained. 

A strategy  that  is  now  being 
pursued  by  Geveke  is  cooper- 

tion  with  manufacturers  by 
means  of  "sharing"  contracts, 
with  each  side  concentrating 
on  what  it  does  best.  ■ 

Unisys  Offers  A la  Carte  Services  ... 


Unisys  has  recently 

announced  the  introduc- 
tion of  a new  service  offering. 
A la  Carte,  aimed  at  tailoring 
maintenance  to  match  user 
needs,  is  a total  maintenance 
and  service  package  based  on 
four  incremental  levels  of 
support.  A la  Carte  is  de- 
signed to  give  customers  a 
comprehensive  choice  of 
services  ranging  from  tele- 
phone help  to  full  on-site 
support  covering  both  hard- 
ware and  software  (see 
Exhibit  A). 

The  four  levels  of  Unisys'  A 
la  Carte  services  include: 

SERVICE  200  provides  tele- 
phone support  for  problem 
solution  during  normal  work- 
ing hours.  In  the  event  that  a 
problem  cannot  be  solved 
over  the  telephone,  further 
assistance  will  be  provided 
by  an  on-site  visit  charged  at 
a preferential  rate.  Service 
200  automatically  entitles 
users  to  system  updates  on 
Unisys  supported  system 
software  at  a nominal  charge. 
Service  200  also  provides 
users  with  regular  briefing  on 
new  hardware  and  system 
software  products. 


Exhibit  A 


UNISYS  A LA  CARTE  SERVICE 


Service  200  - Telephone  Support 
Service  300  - Depot  Repair 
Service  600  - Contracted  On-Site  Repair 
Service  700  - Guaranteed  Systems  Availability 


SERVICE  300  is  essentially  a 
depot  repair  service  for  hard- 
ware at  a Unisys  Support 
Centre.  This  option  also  pro- 
vides users  with  systems 
software  error  corrections, 
priority  on-site  maintenance 
Uixed  fee)  and  hardware 
updates.  All  services  available 
under  Service  200  are  also 
provided  to  Service  300  users. 

SERVICE  600  is  an  on-site,  or 
whenever  possible,  a remote 
access  service.  Other  services 
included  are:  regular  systems 
checks,  preventive  mainte- 
nance, system  software  up- 
dates and  reliability  improve- 
ments. All  services  available 


under  Service  200  and  300 
are  also  included. 

SERVICE  700  is  the  highest 
level  of  service  guaranteeing 
the  highest  possible  system 
availability.  System  availa- 
bility is  guaranteed  depend- 
ing on  the  type  of  system, 
configuration  and  operation. 
In  addition  to  services  of- 
fered under  A la  Carte  200, 
300  and  600,  Service  700  also 
offers  guaranteed  response 
time  (agreed  with  the  cus- 
tomer), workthrough  beyond 
normal  working  hours  and 
free  site  surveys  to  ensure 
that  foreseeable  problems  are 
identified  and  remedied.  ■ 


© 1989  by  INPUT.  Reproduction  Prohibited. 


INPUT 


About  INPUT 


INPUT  provides  planning  information,  analysis,  and  reconamendations 
to  managers  and  executives  in  the  information  processing  industries. 
Through  market  research,  technology  forecasting,  and  competitive 
analysis,  INPUT  supports  client  management  in  making  informed 
decisions. 

Continuous-information  advisory  services,  proprietary  research/ 
consulting,  merger /acquisition  assistance,  and  multiclient  studies  are 
provided  to  users  and  vendors  of  information  systems  and  services 
(software,  processing  services,  turnkey  systems,  systems  integration, 
professional  services,  communications,  systems /software 
maintenance  and  support). 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialization.  Most  have  held  senior 
management  positions  in  operations,  marketing,  or  planning.  This 
expertise  enables  INPUT  to  supply  practical  solutions  to  complex 
business  problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a 
leading  international  research  and  consulting  firm.  Clients  include  more 
than  100  of  the  world's  largest  and  most  technically  advanced 
companies. 

INPUT  OFFICES . 

International 


North  America 

Headquarters 
1280  Villa  Street 
Mountain  View,  CA  94041-1194 
(415)  961-3300 

Telex  171407  Fax  (415)  961-3966 
New  York 

280  North  Central  Avenue,  Suite  303 

Hartsdale,  NY  10530-1894 

(914)  682-8880  Fax  (914)  682-8479 

959  Route  46  East,  Suite  201 
Parsippany,  NJ  07054 
(201)  299-6999 

Telex  134630  Fax  (201)  263-8341 

Washington,  D.C. 

8298  Old  Courthouse  Road 

Vienna,  VA  22182 

(703)  847-6870  Fax  (703)  847-6872 


Europe 

Piccadilly  House 
33/37  Regent  Street 
London  SWl  Y 4NF,  England 
(01)  493-9335 

Telex  27113  Fax  (01)  629-0179 
Paris 

29  rue  de  Leningrad 
75008  Paris,  France 
(16)  44-80-48-43 
Fax  (16)  44-80-40-23 

Japan 

FKI,  Future  Knowledge  Institute 
Saida  Building, 

4-6,  Kanda  Sakuma-cho 
Chiyoda-ku, 

Tokyo  101,  Japan 
(03)864-4026  Fax  (03)  864-41 14 


Route: 


INPUT 


Service 

Update 


©INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — Europe 


June  1989 

IN 

1 .. 

...Management  Buy  Out  Forms  New  Independent  Fourth-Party 

THIS 

Maintenance  Company 

ISSUE: 

3.. 

...Apricot  Offer  for  DDT  Accepted 

3.. 

...Changes  at  Spanish  TPM  Companies 

4.. 

...IBM  Moves  into  Disaster  Recovery 

4.. 

...Cable  News 

5.. 

...Snippets 

6.. 

...News  from  the  USA — HP  Opens  New  HQ  for  World-Wide  Support 

Management  Buy  Out  Forms  New  Independent 
Fourth-Party  Maintenance  Company 


Anew  fourth-party  mainte- 
nance company  has  been 
formed  following  a manage- 
ment buy  out  of  Rank  Xerox 
(UK)  Ltd's,  St.  Helens  Photocop- 
ier Refurbishment  Division.  The 
new  company,  appropriately 
named  4PM  Ltd,  will  operate 
within  the  independent  fourth- 
party  maintenance  market. 

The  management  buy  out  was 
led  by  Richard  Grace  of  Rank 
Xerox  (UK)  Ltd  and  Patrick 
Renn  of  British  Olivetti  Ltd, 
involving  the  business  assets 
associated  with  refurbishing 
and  an  existing  work  force  of 
approximately  58  people.  The 
two  leaders  of  the  management 


buy  out  will  head  up  the  new 
company  as  joint  Managing 
Directors;  Richard  Grace  will  be 
responsible  for  sales  and  mar- 
keting and  Patrick  Renn  for  op- 
erations. The  management  team 
will  be  joined  by  John  Bache 
OBE,  ex-director  of  both  IBM 
and  ICL.  Together  with  two 
senior  managers  of  the  division 
the  management  team  has  taken 
a substantial  equity  stake  in  the 
new  venture,  with  additional 
funding  provided  by  clearing 
banks. 

The  new  company,  4PM  Ltd, 
has  secured  a three-year  con- 
tract with  Rank  Xerox  UK  worth 
in  excess  of  £3  million  and 


intends  to  diversify  the  business 
within  the  growing  high  tech- 
nology fourth-party  mainte- 
nance sector.  In  a statement, 
Richard  Grace  said  "we  are  a 
new  and  significant  entrant  in 
this  growing  market.  Our  skill 
base  and  comprehensive  plant 
makes  us  very  competitive  from 
day  one  in  both  price  and 
quality  for  volume  repairs  and 
refurbishment  of  high  technol- 
ogy equipment." 

Following  announcement  of  the 
management  buy  out,  INPUT 
spoke  to  Richard  Grace,  one  of 
the  leaders  of  the  buy  out  and 


Continued  on  page  2 


2 


Service  Uri&ate 


Exhibit  A 

NEW  U.K.  FOURTH-PARTY 
MAINTENANCE  COMPANY 

• 4PMUd. 

• Buy  out  from  Rank  Xerox 

• Mature  ope  ration 

• Forecast  30%  growth 

• Refurbish  to  "as  new"  standard 

• Future  diversification  planned 


Fourth-Party. ..frompag‘1 

joint  Managing  Director  of  4PM 
Ltd,  to  obtain  further  details  and 
an  insight  to  future  plans. 

In  making  the  acquisition,  4PM 
has  bought  a facility  which  has 
been  progressively  developed 
over  the  last  15  years,  including 
a ready-made  base  of  skills  and 
experience.  Richard  profiled 
fourth-party  maintenance  as 
follows: 

• Space  intensive 

• People  intensive 

• Skill  intensive 

Operations  of  4PM  Ltd  are 
centred  in  St.  Helens  Mersey- 
side, near  Liverpool.  The 
facility  is  adjacent  to  the  M62 
motorway  for  good  access  and 
transportation  and  also  close  to 
the  Freeport  of  Liverpool.  The 
plant  comprises  28,000  square 
feet  (approximately  2,800  square 
metres)  of  factory  and  office 
space  and  costs  are  claimed  to 
be  substantially  lower  than 
those  in  the  South  East  of  Eng- 
land (currently  £2  per  square 
foot  per  annum  was  quoted). 
Availability  of  skilled  labour  is 
also  much  better  in  the  Mersey- 
side area. 


Annual  revenue  is  quoted  as 
being  £2.0  million  and  the  new 
management  is  projecting 
growth  at  30%  per  annum.  At 
present,  the  sole  source  of 
income  is  derived  from  Rank 
Xerox  but  the  company  plans  to 
diversify  to  include  other  manu- 
facturers product  ranges.  The 


company's 
refurbishing 
activities  cover 
three  market 
segments. 

• Photocopiers 

• Information 
Systems 
Hardware 
(i.e.,  small 
computer 
systems) 

• Office  Elec- 
tronics (i.e., 
fax  ma- 
chines) 

Refurbishment 
of  information 
systems  hard- 
ware is  estimated  to  provide 
30%  of  company  revenue  with  a 
growth  factor  projected  in  excess 
of  30%.  Facilities  include  the 
capability  to  refurbish  equip- 
ment to  an  "as  new"  standard, 
including  cosmetics.  To  achieve 
this  the  company  has: 

• Full  painting  facilities 

• Cleaning  equipment  that  has 
the  ability  to  "wash"  complete 
equipment  such  as  small 
computers,  using  an  immer- 
sion technique.  A dehumidi- 


fier is  then  employed  to  dry 
the  equipment  to  a level  which 
satisfies  safety  standards. 

A process  for  returning  clear 
plastic  to  "as  new"  condition 
by  removing  scratches  and 
other  blemishes 


• Screen  printing  for  the 
replacement  of  lettering/ 
logos  etc.,  and  re-badging  if 
required 

Although  4PM  Ltd  has  the 
capability  to  repair  and  refur- 
bish complete  small  computer 
systems,  including  printed 
circuit  boards,  Richard  Grace 
stressed  that  the  company  has 
no  plans  to  start  repair  or 
refurbish  of  disc  drives.  This 
work  will  be  subcontracted  to  a 
specialist  company. 

The  company  can  be  contacted 
at: 

4PM  Ltd 

LEA  GREEN  ROAD 
LEA  GREEN 
ST.  HELENS 
MERSEYSIDE 
WA9  4QF 

TELEPHONE:  44(UK)  0744 
8146451 


“ £3  million  contract  with  Rank  Xerox  ” 


INPUT 


© 1989  by  INPUT,  Reproduction  prohibited. 


June  1989 


3 


Management  Buy  Out  at  Meridian 


Closely  following  on  the 
heals  of  the  management 
buy  out  of  Rank  Xerox 
Merseyside  refurbishing  opera- 
tions, Meridian  Computer 
Engineering  has  also  gone 
through  a management  buy  out. 

A £1.5  million  management  buy 
out  of  Meridian  Computer 
Engineering  was  led  by  David 
Donovan  (UK  Managing  Direc- 
tor) and  Daniel  Schneider 
(French  Managing  Director). 
The  newly  formed  company  is 
called  ITM.  The  original  com- 
pany is  reported  to  have  lost 
£100,000  per  year  in  the  UK, 


n the  last  issue  of  Service 
Update,  INPUT  reported  that 
Apricot  Computers  had 
increased  its  stake  in  the  DDT 
Group  to  a 29.75%  sharehold- 
ing. Although  at  that  time 
takeover  rumours  were  denied 
by  both  companies,  INPUT  can 
now  report  that  Apricot  has 
received  acceptance  of  an  £8 
million  offer  for  the  DDT 
Group.  Acceptance  is  from 
holders  of  95%  of  the  stock. 

Although  a rival  bid  from  Vistec 
was  already  on  the  table  when 
Apricot  made  its  approach,  this 
"all  paper"  bid  faltered.  Vistec 
decided  that  it  would  not  add  a 
cash  alternative  to  the  terms  of 
its  offer.  Initially  favouring  the 
Vistec  offer,  DDT  recommended 
that  the  Apricot  bid  be  accepted 
by  shareholders. 

Apricot  Profits  Fall 

Two  weeks  after  acceptance  by 
DDT  stockholders  of  the  Apricot 


although  the  French  operations 
were  profitable. 

Former  owner.  Meridian,  has 
been  looking  to  buy  third-party 
maintenance  companies  for 
some  time  but  found  that  after 
recent  acquisitions  by  Granada 
only  smaller  companies  re- 
mained. After  trying  to  acquire 
businesses,  the  company  con- 
cluded that  a policy  of  acquisi- 
tions would  take  too  long  to 
complete. 

The  UK  operations  of  Meridian 
Computer  Engineering  were 
reported  in  1988  by  INPUT  as 


bid  the  company  confirmed  a 
sharp  fall  in  profits  for  1989. 

This  does  not  infer  a connection 
of  course. 

Apricot  confirmed  that  full-year 
profits  will  fall  by  25%  to  $6 
million.  The  major  reasons 
given  were  a shortage  of  compo- 
nents which  held  up  shipments 
of  new  products  in  the  third 
quarter,  and  a downturn  in 
orders  that  reduced  the  financial 
systems  division  profits  by  65%. 
The  computer  systems  division 
profits  were  reduced  by  61%  as 
well  as  a reduction  in  interna- 
tional sales. 

Apricot  anticipates  that  sales  of 
its  new  Qi  machine  will  help 
improve  this  situation. 

However,  Apricot  Computer 
Services'  profits  increased  by 
40%  in  the  second  half  of  1989  to 
£3.4  million.  ■ 


© 1989  by  INPUT.  Reproduction  prohibited. 


forecasting  revenues  of  £5.0 
million  for  that  year,  having 
achieved  £3.8  million  in  1987. 
The  company  employed  45 
people  of  which  35  were  engi- 
neering staff  and  operated  from 
three  services  centres. 

The  new  company  plans  to  ex- 
pand its  IBM  mainframe  and 
mid-range  maintenance  and 
service  business.  ■ 


Changes  at 
Spanish  TPM 
Companies 

At  the  recent  (19/20  April) 

INPUT  Customer  Services  Con- 
ference in  London,  there  was 
some  confusion  over  the  owner- 
ship of  two  Spanish  TPM  com- 
panies, MORSA  and  ELTEC. 

INPUT  has  checked  and  found 
the  following: 

First,  ELTEC  acquired  a 100% 
ownership  of  MORSA  early  this 
year.  Then,  AGBA  the 
Barcelona  Water  Authority  (the 
previous  owners  of  MORSA),  in 
April  of  this  year,  took  a 45% 
shareholding  in  ELTEC — which 
owned  100%  of  MORSA. 

For  the  present  time,  the  two 
companies  will  continue  to 
trade  under  separate  names, 
and  although  ELTEC  currently 
has  no  plans  to  completely 
merge  the  two  companies  under 
one  name,  INPUT  believes  that 
eventually  this  will  happen. 

The  combination  of  ELTEC  and 
MORSA  is  forecasting  revenues 
of  PTA  1600  million  in  1989  and 

Continued  on  page  4 

INPUT 


Apricot  Offer  for  DDT  Accepted 


Service  Update 


Changes.  . .from  page  3 

the  group  now  employs  a total 
of  200  people.  Originally,  the 
strength  and  activities  of  ELTEC 
were  within  the  banking  and 
financial  sector.  Combining 


with  MORSA  will  allow  diversi- 
fication into  other  markets. 
Banking  and  finance  still  con- 
tribute just  under  50%  of  the 
revenues. 

Complementing  ELTEC's  pres- 
ence in  the  banldng  and  finance 


sector  is  MORSA's  specialisa- 
tion in  the  servicing  of  micro- 
computers and  the  non-banking 
sectors.  The  revenues  of  the 
combined  group  are  100%  de- 
rived from  third-party 
maintenance.  ■ 


IBM  Moves  into  Disaster  Recovery 


For  the  first  time  IBM  has 
launched  a disaster  recovery 
service  (DRS)  in  the  USA.  The 
announcement  covers  backup 
services  for  medium-range  and 
large-systems  users  in  the  event 
j of  unplanned  down  time. 

1 Users  can  subscribe  to  the 
Business  Recovery  Service  for 
periods  ranging  between  one, 
and  five  years  with  charges  of 


between  $500  and  $4000  per 
month.  Initially,  IBM  will  have 
three  mainframes  and  a mini 
available  in  Florida  and  is  plan- 
ning a second  operation  for 
New  Jersey  later  in  the  year. 

This  has  been  termed  "IBM's 
long  awaited  move"  into  the 
business.  However,  INPUT 
believes  that  IBM  Germany  is 


already  in  the  disaster  recovery 
market.  Recent  information 
indicates  that  IBM  Germany 
has  approximately  13  custom- 
ers and  are  using  the  4381  to 
provide  DRS  in  the  "mobile" 
sector  of  the  market. 

Nevertheless,  the  announce- 
ment by  IBM  in  the  USA  could 
be  significant.  ■ 


Cable  News 

Anew  company,  MBA 

Cables,  was  launched  in 
the  UK  in  March  by  the  com- 
puter brokers  MBA.  The  new 
company  is  to  provide  low-cost 
cabling  for  mid-range  computer 
installations. 

Cabling,  it  is  claimed,  can  add 
30%  or  more  to  the  cost  of  a 
medium-  or  large-range 
system.  MBA  estimates  that 
since  the  AS  400  was  launched 
in  the  UK,  just  less  than  a year 
ago,  the  UK  cabling  market  for 
that  machine  has  reached  £60 
million. 

The  company  has  acquired 
distribution  rights  for  a range  of 
cable  and  communications 
products.  These  are  based  on 
unshielded  twisted-pair  (tele- 
phone) cable.  This  type  of  cable 
offers  a number  of  advantages 
over  conventional  types.  In  the 
past,  some  mid-range  IBM  and 

INPUT 


Wang  systems  have  been  cabled 
using  coaxial  or  twinaxial 
cabling  which  can  cause  prob- 
lems when  adding  new  termi- 
nals or  running  cable  through 
hostile  environments  (using 
armoured  cables).  Such  prob- 
lems include  cost  and  installa- 
tion difficulties. 

MBA  claims  that  twisted-pair 
cables  negotiate  comers  more 
easily  and  do  not  need  recabling 
for  different  manufacturers' 
hardware.  Terminals  can  be 
connected  to  sockets,  similar  to 
telephone  points,  and  once  the 
cabling  system  has  been 
installed,  it  can  be  used  regard- 
less of  changes  to  the  computer 
system.  An  office  cabled  for  an 
IBM  system  can  be  reconfigured 
for  another  manufacturer's 
system  in  hours. 

Initial  cabling  offerings  reflect 
the  strength  of  the  parent  com- 
pany, MBA,  in  the  mid-range 

© 1989  by  INPUT.  Reproduction  prohibited. 


IBM  leasing  market.  The  com- 
pany is  City  of  London  based, 
an  area  which  is  considered  to 
have  the  highest  concentration 
of  IBM  mid-range  systems  in  the 
world. 

Sales  will  be  direct  to  cabling 
companies  and  MBA  Cables  is 
forecasting  a first  year  turnover 
of  £1  million.  Two  dealers  were 
already  appointed  in  March, 
out  of  a planned  50  dealers  over 
the  next  two  years. 

More  Cables 

BICC  is  expected  to  almost 
double  the  size  of  its  US  opera- 
tions through  a proposed 
acquisition  of  Brintec,  a USA 
cable  manufacturer.  The  offer 
values  Brintec  at  $177  million 
and  although  the  company  has 
experienced  declining  profits  in 
the  last  two  years,  first  quarter 
performance  looked  much  more 
promising  and  could  herald  a 
revival.  ■ 


June  1989 


5 


Snippets 


• IBM  France  has  signed  a joint  maintenance 
contract  with  Telic  Alcatel.  This  agree- 
ment allows  the  two  companies  to  offer 
combined  support  services  to  common 
sites.  The  agreement  extends  to  IBM  9370, 
AS400  and  System/3X  and  Telic  2600, 
Opus  300  and  Opus  4000  telephone  sys- 
tems. 

• Tulip  Computers  has  signed  an  agreement 
with  Sorbus.  Sorbus  will  provide  on-site 
maintenance  for  all  systems  sold  within 
the  UK  under  a six  month  warranty  pro- 
gramme, with  a user  option  to  extend  the 
contract  to  two  years.  This  agreement  is 
similar  to  one  signed  previously  in  France. 

• In  a recent  reorganisation,  Granada  has  re- 
duced the  number  of  UK  board  members 
by  four  and  also  the  support  staff  by  20. 
These  moves  are  said  to  form  a part  of  a 
rationalisation  programme. 

• In  the  USA,  IBM  is  allowing  authorised 
dealers  to  market  its  maintenance  and 
technical  support  services  to  PC  custom- 
ers. Under  the  terms  of  the  Entry  Systems 
Service  Amendment,  dealers  can  combine 
IBM  service  with  their  own  maintenance 
and  technical  support  offerings  to  custom- 
ers. This  is  part  of  a plan  by  IBM  to  en- 
hance the  services  to  dealers  and  turn 
them  into  "mini  franchises." 

• Xerox  has  taken  over  Dell  service  contracts 
that  were  previously  held  by  BULL  HN. 
Dell  is  now  offering  a five-year  Xerox 
service  option  with  all  PCs.  First  year 
service  costs  are  "bundled"  in  the  price  of 
the  PC  with  subsequent  years  being 
charged  separately.  The  Xerox  service 
extends  the  original  Bull  offering  to  in- 
clude on-site  installation  for  DOS  and 
UNIX  sites.  Xerox  has  1400  engineers  that 
are  dedicated  to  Dell  activities. 


• A shareholder  rights  plan  to  protect  share- 
holders from  a takeover  bid  or  a single 
company  gaining  a 20%  holding  has  been 
announced  by  Sun  Microsystems. 

• Hewlett  Packard  has  appointed  David 
Perozek  to  take  charge  of  the  newly  ac- 
quired Apollo.  He  replaces  Apollo's  CEO 
Thomas  Vanderslice  who  is  leaving  the 
company.  Apollo  will  become  an  HP 
division  within  the  workstation  group. 

Mr.  Vanderslice  is  expected  to  receive  mul- 
timillion dollar  compensation  and  will 
continue  to  offer  consultancy  services  to 
his  former  company. 

• Digital  has  announced  a pay  freeze  for  all 
73,000  US  employees.  The  freeze  will  start 
at  the  beginning  of  the  new  fiscal  year  on  2 
July  and  will  be  reviewed  in  September. 
This  move  is  in  response  to  a softening  of 
the  US  market  and  low  profitability  in  the 
US. 

• A recent  report  from  the  Inter-regional  Eu- 
ropean Consumer  Institute  included  a look 
at  "value  for  money"  in  personal  and 
semi-professional  computers,  for  21  mod- 
els in  four  countries.  Spain  was  reported 
to  offer  the  lowest  value  for  the  money,  the 
computers  are  52%  more  expensive  and 
offer  less  quality  for  the  price  compared  to 
the  rest  of  Europe.  The  best  prices  were 
found  in  West  Germany. 

One  reason  given  for  the  situation  in  Spain 
was  the  need  for  all  computer  technology 
to  be  imported,  therefore  pushing  up 
prices.  Prices  in  Spain  have,  however, 
shown  large  reductions  since  1987.  ■ 


© 1989  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 


News  from  the  U.S.A. 


Hewlett-Packard  Opens 
New  HQ  for  Worldwide 
Customer  Support 
Operations 

In  April  this  year,  Hewlett- 
Packard  opened  a new 
headquarters  facility  for  its 
Worldwide  Customer  Support 
Operations  near  San  Francisco. 
This  new  facility  is  linked  with 
32  response  centres  and  will 
manage  the  activities  of  close  to 
400  support  offices  worldwide. 

Housed  within  the  450,000 
square  foot  (approximately 
45,000  square  meters)  facility 
are: 

• HP  Response  Centre 

• Customer  Education 

• Multivendor  Support 
Division 

• Application  Support 
Division 

• Four  Support  R&D  Activities 

The  vice-president  and  general 
manager  of  Worldwide  Cus- 
tomer Support,  Mike  Leavell, 
conjectured  that  Hewlett- 
Packard  is  the  first  organisation 
to  pursue  the  strategy  of 
integrating  service  operations 
through  a unified  worldwide 
organisation,.  Five  elements  of 
support  have  been  unified  and 
integrated. 


• Hardware  Maintenance 

• Software  Support 

• Customer  Education 

• Network  Support 

• Professional  Services 

The  support  centre's  activities 
are  linked  with  those  of  32 
response  centres  worldwide, 
allowing  Hewlett-Packard  to 
offer  24-hour  access  to  response 
centre  support  worldwide. 


Twenty- four  hour  access  is 
achieved  by  routing  "out  of 
hours"  problem  calls  to  re- 
sponse centres  in  other  time 
zones  that  are  operating  within 
their  normal  working  hours 
(support  and  electronic  data 
base  documentation  are  pro- 
vided in  English).  The  facility 
boasts  some  1,100  professional 
staff  who  provide  support  and 
educational  services  to  Hewlett- 
Packard  customers. 

Housed  within  the  new  facility 
is  the  Hewlett-Packard 


Response  Centre,  that  provides 
problem  resolutions  for 
applications  software,  plus 
complete  software  and  network 
diagnosis. 

Multivendor  Support  Opera- 
tions are  headed  by  David 
Carver  and  provide  TPM  serv- 
ice for  multi  vendor  installations. 
Through  this  Multivendor  Sup- 
port Operation  Hewlett-Packard 


hopes  to  extend  services  beyond 
the  "second  and-a-half"  party 
maintenance  level  of  support 
currently  being  offered  by 
Digital  and  IBM  by  actively 
marketing  its  TPM  services. 
Hewlett-Packard  is  currently 
only  bidding  for  large  contracts. 

The  Application  Support  Divi- 
sion provides  support  for 
Hewlett-Packard  application 
software  products.  Included  in 
the  services  provided  by  this 
division  are  contractual  software 
support,  customer  education, 
performance  tools,  implementa- 
tion assistance,  and  consulting. 
The  Product  Support  Division  is 
responsible  for  Hewlett- 
Packard's  products,  systems  and 
network-maintenance 
programmes. 


^ Commitment  to  support  excellence  ^ 


^ 24  hour  worldwide  access 
to  response  centres  ^ 


INPUT 


& 1989  by  INPUT.  Reproduction  prohibited. 


The  Systems  Support  Laboratory 
performs  research  and  develop- 
ment related  to  customer  sup- 


June  1989 


7 


Exhibit  B HP  WORLDWIDE 

CUSTOMER  SUPPORT  OPERATIONS 

A Commitment  to  Support  Excellence 


port.  The  laboratory  develops 
management  information  sys- 
tems (dispatching,  tracking 
contracts,  quoting  and  ordering) 
to  support  Hewlett-Packard 
field  personnel.  The  Applica- 
tion Support  Division,  Product 
Support  Division  and  Response 
Centre  Operations  also  maintain 
R & D development  laboratories 
for  on-going  enhancement  of 
support  products  and  service 
delivery  methods. 

Exhibit  B illustrates  Hewlett- 
Packard's  Worldwide  Customer 
Support  Operations  organisa- 
tional structure. 


In  conjunction  with  opening  of 
the  Worldwide  Customer  Sup- 
port Operations  headquarters, 
Hewlett-Packard  also  an- 
nounced a new  customer  sup- 
port programme.  This  new 
programme  expands  response 
centre  coverage  hours,  offers  a 
new  electronic  database  and 
revises  Hewlett-Packard's 
tri-level  software  support 
services. 


Announcement  of  the  new 
programme  within  Europe  is 
likely  to  follow  that  in  the 
U.S.A.  INPUT  plans  to  profile 
the  European  announcement  in 
the  next  issue  of  Service  Update. 


©1989  by  INPUT.  Reproduction  prohibited. 


INPUT 


About  INPUT 


INPUT  provides  planning  information,  analysis,  and  recommendations 
to  managers  and  executives  in  the  information  processing  industries. 
Through  market  research,  technology  forecasting,  and  competitive 
analysis,  INPUT  supports  client  management  in  making  informed 
decisions. 

Continuous-information  advisory  services,  proprietary  research/ 
consulting,  merger/acquisition  assistance,  and  multiclient  studies  are 
provided  to  users  and  vendors  of  information  systems  and  services 
(software,  processing  services,  turnkey  systems,  systems  integration, 
professional  services,  communications,  systems /software 
maintenance  and  support). 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialization.  Most  have  held  senior 
management  positions  in  operations,  marketing,  or  planning.  This 
expertise  enables  INPUT  to  supply  practical  solutions  to  complex 
business  problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a 
leading  international  research  and  consulting  firm.  Clients  include  more 
than  100  of  the  world's  largest  and  most  technically  advanced 
companies. 

INPUT  OFFICES ■ 

International 
Europe 

Piccadilly  House 
33/37  Regent  Street 
London  SWIY  4NF,  England 
(01)  493-9335 

Telex  27113  Fax  (01)  629-0179 
Paris 

29  rue  de  Leningrad 
75008  Paris,  France 
(16)  44-80-48-43 
Fax  (16)  44-80-40-23 

Japan 

FKI,  Future  Knowledge  Institute 
Saida  Building, 

4-6,  Kanda  Sakuma-cho 
Chiyoda-ku, 

Tokyo  101,  Japan 
(03)864-4026  Fax  (03)  864-4114 


North  America 

Headquarters 
1280  Villa  Street 
Mountain  View,  CA  94041-1194 
(415)  961-3300 

Telex  171407  Fax  (415)  961-3966 

New  York 

959  Route  46  East,  Suite  201 
Parsippany,  NJ  07054 
(201)  299-6999 

Telex  134630  Fax  (201)  263-8341 

Washington,  D.C. 

8298  Old  Courthouse  Road 

Vienna,  VA  22182 

(703)  847-6870  Fax  (703)  847-6872 


Route: 


INPUT 


Service 

Update 


© INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — Europe 


December  1989 

IN 

1 

...Telub — The  Largest  Independent  Maintenance  Company  in  Scandinavia 

THIS 

7 

...Disaster  Recovery  Gathers  Further  Momentum 

ISSUE: 

8 

...Further  Acquisition  Activity  from  Thomainfor 

8 

...ICL  Training  Development  Centre 

9 

...Snippets 

News  from  the  USA 

10... 

...Intelogic  Trace  and  Sorbus  Introduce  Disaster  Recovery  Service 

11  ... 

...Sorbus  to  Provide  Enhanced  Support  for  IBM  System/3X  Customers 

12... 

...Data  General  Offers  Multi-vendor  Support  Through  Compatible 

Products  Programme 

12... 

...Control  Data  to  Sell  Third-Party  Maintenance  Business  to  Beil  Atlantic 

13... 

...Supporting  VARs:  Cultivating  Good  Relations  with  Strategic  Alternate 
Distribution  Channels 

Telub — The  Largest  Independent  Maintenance 
Company  in  Scandinavia 


Background 

Telub  Service  AB  is  one  of 
the  five  largest  independ- 
ent maintenance  companies  in 
Europe,  and  is  the  largest  in  the 
Nordic  countries  by  a comfort- 
able margin. 

Telub  Service  employs  350  staff, 
has  32  field  service  offices  in  the 


Nordic  countries,  and  a further 
6 offices  in  Germany.  President 
Goran  Stenudd  was  able  to 
report  1988  revenues  up  by 
about  27%,  to  $25  million. 
Sweden  is  the  largest  operation, 
with  195  employees. 

Major  clients  include  Ericsson, 
Volvo,  SAS  and  Norsk  Hydro. 


Telub  Group 

Telub  Service  is  a division  of 
Telub  Group,  which  is  one  of 
the  largest  consulting  and 
technology-based  companies  in 
the  Nordic  region,  offering 
services  and  systems  in  the  data 
processing,  communications 
and  electronics  markets.  Telub 
Group  employs  2000  people. 


Continued  on  next  page 


Service  Update 


Teluh  . .from  page  1 

and  in  1988  had  a turnover  of 
$180  million  up  around  25% 
from  1987.  Exhibit  A outlines 
the  Telub  Group's  structure. 

Technical  Service  accounts  for 
around  40%  of  Telub's  revenue 
(see  Exhibit  B)  providing  instal- 
lation, maintenance,  compo- 
nents and  consultancy  related 
to  telecommunications  and 
radar  systems.  Technical  Docu- 
mentation supplies  technical  in- 
formation to  the  Swedish  De- 
fence Forces  and  the  defence  in- 
dustry, although  the  electronics, 
computer  and  automotive 
industries  also  provide  signifi- 
cant revenue. 

Computer  Maintenance  (Telub 
Service  AB  plus  subsidiaries) 
accounts  for  around  15%  of 
Telub  Group  revenue.  This 
business  comprises  field  servic- 
ing and  workshop  repairs  on 
PCs,  workstations  and  minicom- 
puters. Telub  Service  also 
maintains  terminals,  printers 
and  telecommimications  equip- 
ment. 

Telub  Group  claims  its  Com- 
puter Services  and  Systems 
division  is  one  of  the  largest 
computer  service  companies  in 
Sweden.  This  division  supplies 
IBM,  Apple  and  Compaq  com- 
puter equipment  as  well  as 
consultancy  and  services.  It  is 
Telub  Group's  second-largest 
division,  accounting  for  27%  of 
Group  revenue. 

FFV  Group 

The  Telub  Group  is  itself  a 
subsidiary  of  the  Swedish  state- 
controlled  FFV  Group.  FFV's 


Exhibit  A 


1988  revenues  were  $920  mil- 
lion, representing  a growth  rate 
of  around  20%  over  1987.  1988 
saw  profit  before  extraordinary 
items  grow  76%  to  $44  million. 

FFV  divides  its  business  into 
five  groups,  one  of  which  is  the 
Telub  Group.  The  structure  of 
the  parent  company  FFV  is 
outlined  in  Exhibit  C. 

Exhibit  D breaks  down  FFV 
Group  revenue  by  Business 
Group. 


The  Ordnance  Business  Group 
manufactures  and  markets 
military  equipment,  primarily 
infantry  and  underwater  weap- 
ons. As  a supplier  of  products 
to  the  defence  forces  of  Sweden 
and  other  countries,  the  FFV 
Group  claims  that  Ordnance  is 
subjected  to  cycles  resulting 
largely  from  political  decisions 
and  is  insensitive  to  fluctuations 
in  the  overall  business  environ- 
ment. Limitations  on  the  export 
of  Swedish  defence  products. 


INPUT 


e 1989  by  INPUT.  Reproduction  prohibited. 


December  1989 


3 


Exhibit  B 

Telub  Group  Revenue — 163  Million 
Distribution  by  Business  Sector — 1988 

Industrial  Services* 


* Now  part  of  the  Development  Group 
Currency  conversion  by  INPUT 
($1  = SK  6.55) 


combined  with  the  limited  budgets  of  key 
foreign  customers,  make  orders  from  the  Swed- 
ish Defense  Forces  of  crucial  importance. 

Aerotech  Group  provides  aviation  maintenance 
in  Europe,  the  U.S.  and  the  Far  East.  Both 
Aerotech  and  Telub  are  less  dependent  on 
defence  expenditure,  and  as  maintainers  and 
equipment  modifiers  may  indeed  benefit  from 
the  need  to  extend  the  life  of  existing  equip- 
ment. Defence  orders  account  for  around  40% 
of  Telub  Group's  total  sales.  This  proportion  is 
expected  to  decline  as  Telub  continues  to 
develop  its  commercial  business.  Both  groups 
are  focusing  their  businesses  along  commercial, 
and  increasingly,  international  Unes. 

The  Holding  Group  manages  those  companies 
that  are  not  part  of  FFV's  core  businesses,  such 
as  vehicle  services  equipment  and  measure- 
ment technology  suppliers.  The  Development 
Group  comprises  those  companies  able  to 
provide  necessary  technology  to  FFV,  or  which 
assist  the  Group's  continued  internationalisa- 
tion. It  includes  companies  specialising  in 
advanced  material  and  chemical  technologies 
and  logistics  consultancy. 

Continued  on  next  page 


Exhibit  C 


FFV  Group 


© 1989  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 


Telub.  . .from  page  3 


Exhibit  D 

FFV  Group  Revenue — $920  Million 
Distribution  by  Business  Group — 1988 


Development 


Notes:  Percentages  have  been  rounded. 
Currency  conversion  by  INPUT 
($1  = SK  6.55) 


Exhibit  E illustrates  the  profit  contribution  of 
each  Business  Group  to  the  parent  group,  FFV. 
Ordnance  ($26M),  Aerotech  ($16.2M)  and  Telub 
($7.9M)  all  contributed  significantly,  whilst  the 
Holding  and  Development  Groups  returned  an 
overall  loss.  Both  the  latter  groups  concentrate 
on  newly-established  companies  and  business 
partners,  which  accounts  for  their  low  profita- 
bility. 

Exhibit  F compares  the  revenue  growth  of  FFV 
and  Telub  Group  from  1984  to  1988.  FFV 
achieved  a compound  annual  growth  rate 
(CAGR)  of  19%,  whilst  Telub  Group  revenues 
grew  at  the  faster  rate  of  26%.  Telub  Group  has 
consequently  increased  its  share  of  FFV's  total 
revenue  from  14%  in  1984  to  18%  in  1988. 

Maintenance  Operations 

Established  as  a business  division  of  Telub 
Group  in  1971,  Telub  Service  was  made  an  in- 
dependent company  in  1987. 

Telub  Service's  operations  are  illustrated  in 
Exhibit  G,  and  are  shown  segmented  by  coun- 
try. 


Exhibit  E 


FFV  Distribution  of  Profit  before  Extraordinary 
Items  by  Business  Group  (1988) 


Ordnance  Aerotech  Telub  Holding  Develop- 


ment 


In  1988,  Telub  Service's  revenue 
grew  by  around  25%.  Acquisi- 
tions in  Sweden  included  the 
service  operations  of  MAI 
Information  Systems  AB  and 
Recognition  Equipment  AB. 

The  acquisition  of  MBF  Norge 
A/S  (December  1988)  is  ex- 
pected to  increase  revenues 
from  Norwegian  operations  by 
as  much  as  60%  in  1989. 

Finland  saw  the  opening  of  two 
new  service  offices,  and  Telub 
also  reports  good  growth  from 
its  West  German  subsidiary, 
Telub  Bitronic  (acquired  2 years 
ago).  Telub  claims  its  Denmark 
operations  were  able  to  pene- 
trate the  minicomputer  market. 

Range  of  Services 

Telub  Service  concentrates  its 
service  activities  on  IBM  System 


INPUT 


© 1989  by  INPUT.  Reproduction  prohibited. 


December  1989 


5 


3X,  Digital  PDP-11  and  VAX, 
Digital  Microvax  and  MAI 
systems.  It  also  services  a wide 
range  of  workstations,  peripher- 
als and  PCs. 

Telub  also  supplies  both  new 
and  used  computer  systems, 
mainly  IBM  and  Digital  mini- 
computers, and  a range  of 
accessories  for  computers  and 
PCs. 


Competitive  Advantages 

Telub  Service  claims  to  have  a 
number  of  advantages  to  offer 
its  partners  and  clients,  as 
highlighted  in  Exhibit  H: 

• a high  degree  of  decentralisa- 
tion that  allows  the  provision 
of  blanket  service  agreements 
to  clients  whilst  enabling  in- 
dividual units  to  tailor  serv- 
ices to  meet  local  needs 


• a skilled  staff  of  field  service 
engineers  with  the  technical 
and  maintenance  capability 
to  work  on  their  own  initia- 
tive 

• a powerful  service  concept 
comprising  service  agree- 
ments, repair  services,  system 
expansion  with  new  and 
used  equipment,  and  sales  of 
accessories 

• a highly  developed  network 
of  equipment  suppliers,  spare 
parts  and  new  releases  of 
hardware  and  software 

• a well-developed  planning 
and  support  organisation 

• two  high-capacity  Repair 
Centres  in  Vaxjo,  Sweden 
and  Frankfurt,  West  Ger- 
many 

Fourth-Party  Maintenance 
(FPM) 

Telub  Service  is  one  of  the 
leading  FPM  companies  in 
Europe.  In  the  Nordic  coun- 
tries, roughly  15%  of  Telub 
Service's  revenue  comes  from  its 
rapidly  growing  FPM  opera- 
tions. In  West  Germany,  the 
proportion  is  much  higher — 
around  65-70%. 

Three-quarters  of  the  repair 
flow  through  the  high-capacity 
Repair  Centres  stems  from 
fourth-party  business.  Much  of 
this  comes  from  computer 
manufacturers  such  as  Hon- 
eywell, Siemens,  Sharp,  ITT  and 
Victor.  In  addition,  the  Repair 
Centres  are  finding  that  a small 
but  increasing  proportion  of 
work  is  coming  from  end  users. 


Continued  on  next  page 


© 1989  by  INPUT.  Reproduction  prohibited. 


INPUT 


6 

Service  Update 

Tc llih.. .from  page 5 

Exhibit  G 


Telub  Service  AB  Operations  (1989  Forecast) 


Denmark 

Telub  Service 
$2.4  M revenue 
35  staff 

3 service  centres 


Sweden 

Telub  Service 
$18.8  M revenue 
195  staff 

18  service  centres 


Telub  Service  AB 

$30.5  M revenue 
350  staff 

38  service  centres 


Finland 

Telub  Service 
$2.3  M revenue 
25  staff 

6 service  centres 


' West  Germany  ^ 

1 

^ Norway  \ 

Telub  Bitronic 

Telub  Service  | 

$4.3  M revenue 

$2.7  M revenue  | 

70  staff 

1 

25  staff  1 

y 6 service  centres  i 

L 5 service  centres  | 

^^Sssss^sssssssssss 

'oWwOwvwwwW 


Note;  currency  conversion  by  INPUT 
(1$  = SK6.55) 


Exhibit  H 

Strengths  of  Telub  Service 

who  approach  them  directly  as  PC  repair  facilities. 
Both  centres  market  their  FPM  capability  through- 
out Europe.  The  Repair  Centres  dedicate  around 

30  engineers  to  fourth-party  repair  work  in  Sweden 
and  50  engineers  in  West  Germany. 

• Decentralised  structure 

• Skilled  engineers 

• Service  concept 

The  Centres  repair  a variety  of  faulty  units  and 
sub-assemblies  such  as  PCBs,  power  supply  units, 
disk  drives  (though  not  Winchester),  printer  parts, 
mechanical  subassemblies  and  terminals  (including 
keyboards). 

• Established  supply  network 

• Planning  and  support 

• High-capacity  Repair  Centres 

Normal  turnaround  is  1-10  working  days,  exclud- 
ing transport.  Repair  prices  are  fixed  and  are 
usually  between  10%  and  30%  of  the  cost  of  a new 
unit.  Repair  work  is  guaranteed  for  90  days. 

INPUT 


© 1989  by  INPUT.  Reproduction  prohibited. 


December  1989 


7 


Recent  Developments 

Telub  Service  has  identified  a 
market  trend  towards  decentral- 
ised computer  systems  compris- 
ing large  numbers  of  PCs  and 
workstations.  In  addition,  it 
sees  users  purchasing  equip- 
ment from  several  manufactur- 
ers, with  the  result  that  sites  are 
becoming  increasingly  mul- 
tivendor, in  terms  of  the  in- 
stalled equipment  base.  Telub 
believes  that  computer  service 
companies  able  to  service  a 
variety  of  equipment  have  an 
advantage.  Similarly,  Telub 
Service  has  noted  increased 
interest  on  the  part  of  leading 
suppliers  in  the  service  of 
products  from  other  manufac- 
turers. 

1988  also  saw  the  coordination 
of  marketing  activities  at  the 
two  Repair  Centres.  The  ulti- 
mate objective  is  to  secure  the 
company's  position  as  one  of 
Europe's  leading  providers  of 
repair  services  for  manufactur- 
ers and  service  organisations. 

Competitors 

Third-party  business  competi- 
tion in  the  Nordic  countries  is 
claimed  to  come  from  Ericsson 
3C,  Granada  and  Databolin.  In 
West  Germany,  Sorbus  and 
local  service  companies  are 
Telub  Service's  main  competi- 
tors. 

Future  Plans 

Whilst  it  is  accepted  that  con- 
solidation of  current  services  is 
required,  Telub  Service  has 
identified  development  and 
growth  opportunities  in  the 
following  areas: 


• Network  services 

• Communications 

• UNIX  systems 

UNIX  systems  and  PC  networks 
are  already  being  serviced  by 
Telub,  and  it  is  planning  to 
expand  these  services. 

Telub  Service  monitors  product 
developments  closely,  and 


The  earthquake  which 
caused  such  devastation 
when  it  hit  the  San  Francisco 
area  of  Northern  California  in 
October  1989  has  also  been  re- 
sponsible for  an  increase  in 
interest  in  computer  disaster 
recovery  services.  Ten  key 
computer  companies  are  located 
within  the  area  affected  by  the 
earthquake,  including  Amdahl, 
Hewlett-Packard,  Unisys,  and 
IBM  Storage  Products.  The  op- 
erations of  many  of  these  com- 
panies were  disrupted,  but 
fortunately  less  than  was  origi- 
nally fear^. 

Companies  offering  disaster 
recovery  services  did,  however, 
see  a sharp  rise  in  share  prices 
based  on  a market  belief  that  the 
disaster  recovery  business 
would  be  given  a boost  by 
companies  rushing  to  sign  up. 

A number  of  emergencies  were 
reported  by  the  disaster  recov- 
ery companies.  Comdisco  is 
believed  to  have  had  seven 
declared  emergencies,  SunGard 
four  (with  more  expected)  and 
El  Camino  one. 

As  a further  indication  of  in- 
creasing interest  in  disaster 

© 1 989  by  INPUT.  Reproduction  prohibited. 


tailors  its  service  offerings 
accordingly.  Suppliers  of  new 
products,  especially  printers 
and  other  peripherals,  provide 
Telub  Service  with  continuous 
opportunities  for  business 
expansion  and  growth.  Telub 
Service  regards  such  suppliers 
as  potential  business  partners.  ■ 


recovery  in  the  U.S.,  uncon- 
nected with  recent  events, 
Comdisco  has  reported  year- 
end  net  profits  up  535%,  which 
represents  a profit  of  $108 
million  on  a turnover  of  $1.68 
billion,  up  28%  on  the  previous 
year. 

Whether  recent  events  will 
stimulate  Western  European 
interest  in  disaster  recovery  is 
debatable.  Europe  does  not 
tend  to  suffer  from  large-scale 
disasters  or  the  extremes  of 
climate  that  may  cause  prob- 
lems. Nevertheless,  interest  in 
disaster  recovery  in  Europe  is 
gaining  momentum  in  compa- 
nies that  can  provide  such 
services. 

• ICL  has  revealed  a plan  to 
become  a significant  provider 
of  disaster  recovery  services. 
ICL  plans  are  likely  to  be 
announced  in  detail  in  De- 
cember 1989.  The  service  will 
be  provided  by  existing 
customer  service  organisa- 
tions offering  full  disaster 
recovery  services,  and  will 
include  consultancy  and  con- 
tingency planning 

Continued  on  next  page 

INPUT 


Disaster  Recovery  Gathers 
Further  Momentum 


Service  Update 


D iSU StCT.. .from  page  7 

• IBM  intends  to  start  a disaster 
recovery  service  for  AS/400 
users  in  the  U.K.  in  January 
1990.  Services  for  the  B40, 
B50,  B60  and  B70  models  will 
range  from  £13,500  to  £15,500 
per  year. 

• Unisys  has  formed  a partner- 
ship/joint venture  to  offer 
disaster  recovery  services  in 
France.  The  venture  will 
form  European  Assurance  In- 


formatique  SA,  and  is  a result 
of  Unisys  joining  with  CdFi 
SA  (a  computer  services 
company)  and  La  Mondiale 
SA  (an  insurance  company). 
Through  the  operations  of  a 
disaster  recovery  centre 
located  in  Lyon,  the  new 
company  will  also  provide 
remote  diagnostics  and  insur- 
ance against  loss  of  data. 

• Following  agreement  with 
Ageris  SA  in  France  and  Istel 
Failsafe  in  the  U.K.,  the  U.S. 
company  Comdisco  is  aiming 


at  a pan-European  disaster 
recovery  operation.  The 
plans  include  linking  four 
major  European  cities,  Frank- 
furt, Paris,  London  and  Man- 
chester, in  a network  of 
disaster  recovery  centres. 

Comdisco  forecasts  that  the  sites 
based  in  the  U.K.  and  France 
will  generate  approximately  $20 
million  revenue  in  1990.  Future 
plans  also  include  joint  ventures 
in  East  Asia  and  a gateway  to 
the  U.S.  centres.  ■ 


Further  Acquisition  Activity  from 
Thomainfor 


The  August  1989  issue  of 
Service  Update  profiled 
the  operations  of  Thomainfor,  a 
wholly-owned  subsidiary  of 
Thompson  CSF,  following  its  ac- 
quisition of  Control  Data's  Eu- 
ropean third-party  maintenance 
business.  Subsequently,  Tho- 
mainfor has  made  further 
acquisitions. 

• In  early  November  1989, 
Thomainfor  acquired  two 


Austrian  third-party  mainte- 
nance companies,  APH-Serv 
and  Datacom. 

• In  October  1989,  Thomainfor 
acquired  two  European  sub- 
sidiaries of  MAI  Basic  Four, 
Tekserv  France  and  Tekserv 
Belgium. 

In  a previous  interview  with 
INPUT,  Thomainfor  identified  a 
strategy  to  develop  critical  mass 


in  the  countries  where  it  had 
business  operations.  These 
acquisitions  add  strength  to  the 
development  of  Thomainfor  and 
most  likely  will  result  in  the 
company  becoming  the  second- 
largest  third-party  maintenance 
company  in  Western  Europe, 
following  Granada.  ■ 


ICL  Training  Development  Centre 


ICL's  recently  announced 
UNIX  Training  Development 
Centre  at  Leopardstown,  near 
Dublin,  is  the  first  phase  of  a 
pan-European  strategy.  INPUT 
spoke  to  ICL  to  glean  more  in- 
formation. 

ICL  expect  that  by  1992,  the 
centre  will  have  raised  Euro- 
pean UNIX  training  revenues  to 

INPUT 


more  than  £7  million.  The 
initial  investment  in  buildings 
and  infrastructure  exceeds  £1 
million,  and  ICL  claims  that 
more  than  £500,000  will  be 
invested  in  course  development 
over  the  next  three  years. 

The  centre  currently  employs  25 
staff.  ICL  expects  that  by  1992 


e 1989  by  INPUT.  Reproduction  prohibited. 


over  100  staff  will  be  engaged  in 
UNIX  course  and  applications 
development. 

ICL  believes  the  benefits  of  its 
location  in  Ireland  to  be  three- 
fold: 

• Ireland  has  an  abundance  of 
graduates  with  relevant 


December  1989 


9 


Snippets 


degrees  in  computer  science 
(around  a third  of  the  stu- 
dents in  the  Republic  of 
Ireland  graduate  in  computer 
science  or  related  courses). 

• The  centre  will  be  located 
directly  below  ICL's  existing 
UNIX  applications  develop- 
ment centre,  providing  access 
to  additional  skills  when 
required. 

• The  Dublin  area  is  well 
served  by  a number  of  com- 
panies offering  rapid  and 
high-quality  documentation 
and  software  interface  trans- 
lation services.  Course-ware 
and  other  products  can  be 
distributed  throughout  Eu- 
rope with  minimum  delay. 

ICL  stresses  that  the  centre  will 
treat  UNIX  as  a generic  product, 
and  will  not  produce  proprie- 
tary courses.  Such  an  approach 
is  made  necessary  by  the  prolif- 
eration of  multivendor  sites  and 
the  need  for  systems  integration 
capability.  ICL  hopes  to  help 
bridge  internal  and  external 
skills  gaps  caused  by  the  rapid 
take-up  of  UNIX  systems,  whilst 
providing  genuine  career  paths 
for  graduates. 

If  the  Leopardstown  centre  is  a 
success,  additional  centre(s)  can 
be  expected  within  the  next  two 
years.  INPUT  believes  that 
ICL's  presence  in  France,  com- 
bined with  the  size  and  matur- 
ity of  the  French  network  mar- 
ket (ref.  INPUT,  Network  Serv- 
ices, Western  European  Market 
Opportunities  1988-1993)  make 
that  country  a probable  location 
for  the  development  of  network 
training  courses.  ■ 


The  UCL  Group,  a computer 
maintenance  and  systems 
house,  has  been  acquired  by 
the  Ferrari  Group  in  the  U.K. 
for  £4.1  million  ($6.7  million). 
Following  the  merging  of  the 
maintenance  operations  of 
UCL  with  those  of  Ferrari, 
Ferrari  claims  that  it  will  be 
the  fifth-largest  maintenance 
operation  in  the  U.K. 

Granada  Computer  Services 
Ltd.'s  subsidiary.  The  Com- 
puter Exchange,  has  ex- 
panded its  portfolio  of  serv- 
ices in  the  U.K.  Through  the 
medium  of  the  Telecom  Gold 
network,  the  company  now 
offers  a wide  range  of  serv- 
ices to  the  IBM  market. 
Examples  of  these  are 
monthly  articles  on  IBM 
product  ranges,  pricing 
policies,  and  residual  values 
for  a variety  of  IBM  systems, 
and  a leasing  model  which 
provides  users  with  a method 
of  interrogating  quotations. 
Subscription  charges  are  £100 
per  year. 

♦j*  Digital  has  announced  the 
opening  of  a customer  train- 
ing facility  in  Scotland,  the 
first  in  that  part  of  the  U.K. 
The  objective  of  the  new 
training  centre,  which  is 
being  run  by  the  Strathclyde 
Institute,  is  to  help  bridge  the 
computer  skills  gap  which 
exists  in  Scotland. 

*1*  Bull  SA  of  France  is  to  pur- 
chase Zenith  Data  Systems, 
the  PC  manufacturer  based  in 
the  U.S.  The  purchase,  at 
around  $600  million,  demon- 
strates the  commitment  of 


Bull  to  a long-term  strategy 
involving  PCs. 

Apricot  Computers  is  to 
acquire  Information  Techol- 
ogy  Ltd  (LTD,  a long-estab- 
lished U.K.  computer  manu- 
facturer, for  £12.7  million 
($21  million).  The  strengths 
of  TTL  are  in  computer  soft- 
ware and  services,  particu- 
larly data  networking  soft- 
ware for  healthcare  admini- 
stration and  computer  main- 
tenance. It  is  believed  that 
merging  and  rationalising  the 
organisation  of  ITL  with 
Apricot  may  result  in  some 
job  losses  at  ITL. 

Following  a recent  Rights 
Issue,  the  U.K.  company 
Ferrari  Holdings  PLC  is 
likely  to  end  up  with  a 
significant  shareholding  by 
Singer  and  Friedlander;  a 
37%  stake  is  anticipated.  The 
purpose  of  the  Rights  Issue 
was  to  raise  cash,  £4.5  million 
($7.4  million),  to  assist  Ferrari 
in  boosting  the  operations  of 
the  recently  acquired  UCL. 

Third-party  maintenance  has 
been  given  a boost  in  the  U.K. 
The  Central  Computer  and 
Telecommunications  Agency 
(CCTA),  a government 
advisory  body,  has  issued  a 
policy  document  on  the 
maintenance  of  computer 
equipment.  The  policy  state- 
ment, which  highlights  the 
benefits  of  single-source 
maintenance,  recommends 
that  government  depart- 
ments consider  competition 
for  maintenance  whenever 
such  opportunities  arise,  and 

Continued  on  next  page 


© 1989  by  INPUT.  Reproducfion  prohibited. 


INPUT 


10 


Service  Update 


offers  a number  of  CCTA- 
approved  suppliers.  Individ- 
ual government  departments 
will  be  expected  to  ensure 
that  bidders  for  contracts  can 
meet  the  department's  needs. 
Although  the  CCTA  can  only 
recommend,  not  enforce, 
third-party  maintenance 
companies  in  the  U.K.  will 
likely  welcome  this  opportu- 
nity. 

♦j*  In  recognition  of  the  need  to 
preempt,  if  possible,  a poten- 
tial skills  shortage,  the  Na- 
tional Computing  Centre 
(NCC)  in  the  U.K.  has 
launched  a working  party  to 
study  the  problems  of  skill 
shortages  in  the  IT  industry. 
The  working  party  will  be 
chaired  by  Fraser  Mitchell, 
the  NCC  deputy  chairman. 

*1*  British  Olivetti  Customer 
Support  Group  has  released 
some  details  of  its  three-year 
support  contract  with 
Barclays  Bank.  Olivetti  is  to 
provide  installation  and 
maintenance  of  22,000  ATM 
terminals  by  providing  a 
team  of  40  staff  to  work  with 
Barclays  own  personnel.  The 
contract  is  valued  at  £3.3 
million  ($5.4  million)  and  will 
be  serviced  from  two  dedi- 
cated centres,  one  in  Manch- 
ester and  the  other  just  north 
of  London.  Olivetti's  cus- 
tomer support  group  is 
forecasting  a revenue  of  £47 
million  ($77  million)  in  1989, 
representing  a compound 
annual  growth  rate  (CAGR) 
of  almost  40%  over  the  last 
two  years.  Other  Olivetti 
customers  include  several 
building  societies,  Marks  & 
Spencer,  and  the  National 
Westminster  Bank. 


♦j*  IBM  has  been  asked  by 
health  districts  in  the  U.K.'s 
West  Midlands  to  develop  IT 
training  for  70,000  staff.  The 
training,  which  will  be 
mainly  computer-based,  will 
be  developed  in  conjunction 
with  districts  and  the  first 
phase  will  be  the  setting  up 
of  three  pilot  sites. 

♦j*  Ian  Vallance,  the  chairman  of 
British  Telecom,  has  an- 
nounced that  BT  is  aiming  to 
achieve  a completely  new 
business  culture.  The  culture 
is  that  of  Total  Quality,  focus- 
ing on  customer  needs  and 
being  right  the  first  time, 
every  time.  BT  has  suffered 
repeated  criticism  of  the 
quality  of  its  service.  The 
programme  of  training  will 


News  from  the  USA 


Both  Intelogic  Trace  and  Sorbus 
have  recently  thrown  their 
third-party  maintenance  hats 
into  the  disaster  recovery  serv- 
ices ring. 

Sorbus  has  formed  a partner- 
ship with  noted  disaster  recov- 
ery specialist  SunGard  Recovery 
Services  to  deliver  hot-site 
services  for  IBM  4300  users,  and 
cold-site  availability  for  the  IBM 
and  DEC  midrange  customers. 
Up  to  now,  SunGard  has  proven 
its  expertise  in  the  IBM  3090  and 
3080  arena,  but,  prior  to  this 
partnership,  had  not  penetrated 
the  4300  market.  This  alliance 
matches  up  SunGard's  disaster 
recovery  expertise  with  Sorbus' 
strong  marketing  presence  in 
the  IBM  midrange  arena,  which 


involve  220,000  BT  employ- 
ees. 

Logitek  has  acquired  Micro- 
tex,  the  Altos  distribution 
operation  of  MBS.  This  ac- 
quisition, costing  around 
£1  million  ($1.6  million),  will 
result  in  Logitek  becoming 
the  largest  Altos  distributor 
in  Europe;  it  will  also  expand 
its  base  of  maintenance 
customers. 

♦j.  A new  company,  DCM 
Services  Ltd,  has  been  cre- 
ated as  a result  of  a manage- 
ment buy-in  of  the  U.K. 
Maintenance  and  Retail 
division  of  Dataserv.  The 
new  company  will  operate 
from  existing  offices  at 
Welwyn  Garden  City.  ■ 


includes  a large  installed  base  of 
IBM  4300,  IBM  System/3X  and 
DEC  system  users.  Under  the 
new  agreement,  Sorbus  will 
market  disaster  recovery  serv- 
ices provided  by  SunGard. 

The  team  will  deliver  hot-site 
services,  providing  customers 
with  access  to  fully  configured, 
fully  operational  systems,  from 
SunGard's  three  "mega- 
centres", located  in  Philadelphia 
(PA),  Chicago  (ID  and  San 
Diego  (CA).  In  addition,  cus- 
tomers can  set  up  operations  in 
cold  sites  located  in  Chicago, 
Philadelphia,  San  Leandro  (CA), 
St  Louis  (M([)),  Fort  Worth  (TX), 
San  Diego,  and  Minneapolis 
(MN).  These  cold  sites  are 
equipped  with  raised  floors. 


Intelogic  Trace  and  Sorbus  Introduce 
Disaster  Recovery  Services 


INPUT 


© 1989  by  INPUT.  Reproduction  prohibited. 


December  1 989 


11 


HVAC  and  electrical  wiring, 
Halon  fire  protection  and 
security  systems.  Plans  to  offer 
"warm-site"  services,  with 
Sorbus  assuming  the  responsi- 
bility for  locating  and  installing 
replacement  systems  at  the  cold- 
site  facilities,  are  still  under 
development.  Hot-site  and 
cold-site  services  were  made 
available  in  September. 

Intelogic  Trace  launched  its  own 
disaster  recovery  offerings  for 
System  3X  and  AS/400  custom- 
ers earlier,  in  June.  IT  will  be 
providing  hot-site  coverage 
from  ten  locations  within  the 
U.S.,  with  Systems  34  and  36 
installations  backed  up  by  hot- 
site  locations  in  Denver,  Chi- 
cago, Washington,  Detroit,  Los 
Angeles,  Houston,  New  York 
City,  San  Francisco,  San  Antonio 
and  Atlanta.  System  38  and 
AS/400  hot-site  support  is  cur- 
rently provided  out  of  San 
Antonio,  but  IT  hopes  to  be  able 
to  provide  backup  for  aU  sys- 
tems from  all  ten  locations  by 
next  year. 

Intelogic  Trace's  Disaster  Assis- 
tance Programme  gives  the 
customer  two  options:  the 
customer  can  access  a desig- 
nated hot  site  through  a remote 
hook-up,  or  the  customer  can 
elect  to  install  a loaner  system 
(loaners  are  provided  at  no 
additional  charge)  at  a location 
prepared  by  the  customer.  For 
each  account,  IT  will  assign  a 
disaster  assistance  team,  which 
wiU  be  responsible  for  supervis- 
ing activities  at  the  hot  site  and 
coordinating  the  installation  of 
loaner  systems  and  remote 
hook-ups.  IT  will  also  provide 
hot-site  testing  free  of  charge  for 
two  days  each  year,  allowing 
customers  to  test,  modify  and 


Exhibit  I 

Intelogic  Trace  Disaster  Assistance  Programme 

Price  Schedule 


Model 

List 

Maintenance 
Customer  Price 

System  34 

$50.00 

$37.00 

System  36 

$50.00-120.00 

$37.00-90.00 

System  38 

$175.00-400.00 

$131.00-300.00 

AS/400 

$150.00-600.00 

$112.00-450.00 

improve  their  contingency 
plans.  The  Disaster  Assistance 
Programme  does  not  yet  include 
contingency  planning  services, 
but  Intelogic  Trace  is  seeking  to 
partner  with  vendors  to  provide 
such  services. 

Monthly  fees  for  IT's  disaster 
recovery  services  range  from 


$50  to  $600,  depending  on  the 
type  of  equipment  needed. 
(Customers  who  purchase 
maintenance  services  or  lease 
equipment  from  IT  receive  a 
25%  discoimt.  Three-  and  five- 
year  discounts  are  also  avail- 
able, accruing  an  additional  25% 
discount.  See  Exhibit  I for  the 
price  schedule.  ■ 


News  from  the  USA 

Sorbus  to  Provide  Enhanced  Support 
for  IBM  System/3X  Customers 


^ trengthening  its  service 
^ portfolio  for  IBM  System/ 
3Xcustomers,  Sorbus  has  an- 
nounced the  3Xtra  Support 
Programme,  a four-point  service 
package  featuring  hotline 
support,  enhanced  on-site 
customer  support,  cold-site 
disaster  recovery  services  and  a 
nationwide  site  relocation  and 
installation  service. 

The  3Xtra  Support  Programme 
marks  Sorbus'  first  foray  into 
systems  software  support. 
Primarily  a hardware  mainte- 

© 1989  by  INPUT.  Reproduction  prohibited. 


nance  vendor,  Sorbus  had  been 
announcing  its  intention  to 
provide  software  support  for 
some  time,  and  finally  deliv- 
ered with  a package  that  offers 
toll-free  hotline  support,  con- 
figuration assistance,  perform- 
ance consulting,  and  internal 
networking  recommendations, 
as  well  as  personal  computer 
expertise.  Sorbus  wiU  also 
provide  system  release  coordi- 
nation for  engineering  change 
orders  (ECOs),  programme 
temporary  fixes  (PTFs)  and 

Continued  on  next  page 

INPUT 


12 


Service  Update 


Sorbus.  ..from  page  11 

programme  change  orders 
(PCOs). 

Disaster  recovery  services, 
offering  cold-site  availability, 
are  also  available  at  no  addi- 
tional charge.  Site  relocation 
and  installation  services,  com- 
plete with  planning,  coordina- 
tion, de/reinstallation,  cabling, 
moving,  and  testing  and  sup- 


port, are  available  for  System/ 
3X  customers  for  a fee.  Site 
relocation  services  are  priced 
per  project,  while  de/ reinstalla- 
tion and  testing  are  charged  on 
a time-and-materials  basis. 

Sorbus  plans  to  extend  this 
service  to  the  IBM  AS/ 400 
platform  by  year's  end.  The 
3Xtra  Support  Programme  will 
be  phased  in  over  the  third  and 
fourth  quarters.  ■ 


News  from  the  USA 

Data  General  Offers  Multivendor  Support 
Through  Compatible  Products  Programme 


Data  General  has  made 
support  for  third-party 
equipment  official  with  the  an- 
nouncement of  the  Compatible 
Products  Programme  (CPP), 
which  offers  single-source 
support  for  third-party  products 
linked  with  DG  machines. 

The  new  programme  offers 
support  for  over  100  non-DG 


products,  including  Fujitsu, 
Printronix,  CEXI,  Hewlett- 
Packard,  Epson,  Okidata  and 
Texas  Instruments,  as  well  as 
microcomputers  integrated  with 
DG  systems.  EX2  will  also 
accommodate  customers  with 
equipment  not  currently  on  the 
vendors'  Compatible  Products 
Support  list.  ■ 


News  from  the  USA 

Control  Data  to  Sell  U.S.  Third-Party 
Maintenance  Business  to  Bell  Atlantic 


Following  the  sale  of  its  Eu- 
ropean third-party  mainte- 
nance business  to  Thomainfor  in 
June  1989,  Control  Data  an- 
nounced on  25  October  1989, 
that  Bell  Atlantic  Customer 
Services  had  signed  a definitive 
agreement  to  purchase  its  U.S. 
third-party  computer  mainte- 
nance business.  The  terms  of 
the  sale  have  not  been  disclosed. 

In  the  announcement,  it  was 
stated  that  would  be  included  in 

INPUT 


the  purchase.  Control  Data's 
customer  base  and  nationwide 
maintenance  facilities.  These 
would  be  merged  with  Sorbus,  a 
Bell  Atlantic  Customer  Services 
subsidiary. 

Commenting  on  the  purchase, 
Thomas  Vassilliades,  the  Presi- 
dent of  Bell  Atlantic  Customer 
Services  and  Chairman  of 
Sorbus,  said: 


© 1989  by  INPUT.  Reproduction  prohibited. 


"This  acquisition  would  provide  us 
with  additionalexpertise  in  the  in- 
creasingly sophisticated  worksta- 
tion and  high-end  mainframe  tech- 
nologies. Equally  important,  it 
would  provide  an  enhanced  critical 
mass  of  resources  in  key  geographic 
areas  to  meet  the  growing  market 
trendtowards  distributed  systems 
and  cooperative  processing." 

Lawrence  Perlman,  Control 
Data's  President  and  Chief 
Operating  Officer,  said: 

"Control  Data's  third-party 
maintenance  business  is  an  excel- 
lent business  that  has  consistently 
contributed  to  the  company.  How- 
ever, the  business  does  not  fit  into 
Control  Data's  strategy  to  be  a data 
solutions  company.  In  addition, 
since  the  third-party  maintenance 
market  is  intensely  competitive  and 
is  going  through  consolidation  at 
present,  we  have  determined  that  a 
sale  to  Bell  Atlantic  would  be  in  the 
interests  of  all  parties.  The  busi- 
ness, when  integrated,  will  move 
forward  with  combined  strengths 
and  even  greater 
success." 

The  business  operations  that  are 
being  acquired  by  Sorbus 
include  computer  maintenance 
services  for  products  of  leading 
manufacturers,  primarily  those 
of  IBM  and  Digital.  Control 
Data  will  retain  maintenance 
control  of  its  CYBER  product 
line  and  will  continue  to  pro- 
vide those  maintenance  serv- 
ices. 

Sorbus  claims  to  be  the  world 
leader  in  independent  computer 
maintenance  with  operations  in 
North  America  and  Western 
Europe,  and  250  offices  world- 
wide servicing  more  than  80,000 
customer  sites.  ■ 


December  1989 


13 


News  from  the  USA 

Supporting  VARs:  Cultivating  Good  Relations  with 
Strategic  Alternate  Distribution  Channels 


Introduction 

The  downward  migration  of 
processing  technology  from 
huge  mainframes  to  small 
systems  has  pushed  value- 
added  resellers  to  the  forefront 
as  key  players  in  the  marketing 
strategies  of  information  sys- 
tems vendors.  Lower  prices  and 
tighter  profit  margins  on  small 
systems  have  made  a direct 
sales  force  approach  for  the 
small  business  user  segment  less 
cost-effective.  More  and  more 
vendors  are  looking  on  value- 
added  resellers  as  extensions  of 
their  direct  sales  forces,  not  only 
for  moving  hardware  products 
but  for  selling  the  support 
services  that  go  with  them.  In 
recognition  of  these  resellers' 
need  for  good  vendor  support 
as  well  as  proper  incentives  for 
VARs  to  push  a vendor's  service 
contracts,  a number  of  vendors 
are  developing  or  have  devel- 
oped VAR  support  and  incen- 


tive programmes  to  achieve 
greater  market  penetration 
through  alternate  distribution 
channels. 

This  article  discusses  the  objec- 
tives and  features  of  VAR 
support  and  incentive  program- 
mes and  looks  at  three  vendors, 
DEC,  IBM  and  Compaq,  all  of 
which  have  developed  different 
approaches  to  VAR  support. 

Objectives  of  VAR 
Support 

The  principal  objective  behind 
VAR  support  and  incentive  pro- 
grammes is  to  encourage  VARs 
to  market  the  vendor's  products 
and  services.  This  objective  is 
simple  enough  to  state,  but  the 
methods  to  achieve  it  consist  of 
a tangle  of  choices  that  could 
either  turn  the  partnership  into 
a "win-win"  situation  for  both 
vendor  and  VAR,  or  dissolve  it 
into  a tense  relationship  ham- 
pered by 
numerous 
conflicts. 

The  vendor's 
primary  objec- 
tive is  to  maxi- 
mise returns  by 
distributing 
through  a 
wider  network 
of  resellers, 
thereby  broad- 
ening the  po- 
tential cus- 
tomer base, 
without  incur- 


ring the  costs  of  using  a direct 
sales  force.  The  reseller's  simi- 
lar goals  also  require  the 
vendor's  full  backing  of  its 
efforts  to  allow  the  reseller  to 
deliver  the  best  product  and 
services  to  its  customer,  thereby 
achieving  customer  satisfaction 
and  repeat  business.  In  some 
cases,  both  the  vendor  and  VAR 
are  trying  to  sell  to  the  same 
customer.  Result:  conflict. 

Channel  conflict  could,  and 
should,  be  reduced  through 
more  selective  partnering 
strategies  and  better  channel 
management,  but  vendors 
should  not  withdraw  or  de- 
grade support  of  VARs  in  order 
to  diminish  competition.  The 
resellers  constitute  a pipeline 
through  which  customers 
receive  the  vendor's  product 
and  services,  and  a degradation 
of  product  and  service  quality  to 
the  end  user  due  to  poor  VAR 
support  reflects  badly  on  both 
the  vendor  and  the  VAR. 

Where,  then,  can  the  twain 
meet? 

VAR  Requirements 

In  order  to  provide  an  adequate 
level  of  support  to  their  custom- 
ers, VARs  need  defined  policies 
from  the  manufacturers  in  four 
areas:  parts  distribution,  mainte- 
nance documentation  for  both 
hardware  and  software,  priority 
access  to  support  centre  exper- 
tise, and  education  and  training, 
as  highlighted  in  Exhibit  J. 

Continued  on  next  page 


Exhibit  J 

VAR  Support 

Vendors  should  define  policy  on: 

• Parts  distribution 

• Support  centre  access 

• Access  to  hardware  and  software 
documentation 

• Education  and  training 


© 1989  by  INPUT.  Reproduction  prohibited. 


INPUT 


14 


Service  Update 


Supporting.  ..from  page  23 

Parts  Distribution 

A vendor's  parts  policy  should 
have  the  following:  a provision 
allowing  VARs  to  resell  over- 
stocked parts  back  to  the  ven- 
dor, another  allowing  dealers  to 
purchase  parts  from  local 
service  plants,  discounted  prices 
for  resellers,  and  an  expedited 
parts  delivery  process  for 
resellers  willing  to  pay  the 
shipping  fees. 

Given  the  short  life  cycle  of 
technical  products,  dealers  are 
often  reluctant  to  maintain  an 


adequate  supply  of  parts  for 
fear  that  they  will  be  left  hold- 
ing a high  inventory  of  obsolete 
parts  after  the  next  product 
cycle.  Allowing  VARs  to  resell 
overstocked  parts  allows  dealers 
to  overcome  these  fears,  since 
selling  parts  to  dealers  at  a 
discount  allows  dealers  to  make 
a profit  on  parts  as  well  as 
labour.  Allowing  dealers  to 
purchase  parts  from  local 
service  plants  and  expediting 
parts  delivery  ensures  quick 
turnaround  and  eases  the  parts 
supply  flow.  Exhibit  K provides 
a look  at  IBM,  Digital  and 
Compaq's  competitive  stance  in 
the  area  of  parts  distribution. 


Support  Centre  Access 

An  ongoing  exchange  of  techni- 
cal information  is  vital  to  a 
VAR's  ability  to  successfully 
represent  a manufacturer.  The 
degree  of  information  and 
methods  of  providing  it,  how- 
ever, vary  widely  between 
hardware  vendors  and  their 
reseller  agents.  Exhibits  L 
through  N give  a detailed 
overview  of  the  types  of  infor- 
mation support  and  delivery 
exchanged  between  leading 
vendors  and  VARs. 

Giving  dealers  priority  access  to 
second-level  expertise  (senior 


Exhibit  K VAR  Requirements 

Vendor  Comparison — Parts  Distribution 


Question 

Compaq 

Digital 

IBM 

Are  dealers  allowed  to 

Yes*  limited 

return  parts  if  overstocked? 

Yes 

N/A 

to  certain 
part  numbers 

What  types  of  parts 
discount  do  you  provide 
to  authorised  dealers? 

-Flat 

None 

None 

33% 

- Volume 

None 

Yes  (not 
disclosed) 

None 

Are  dealers  charged  extra 

Yes, 

for  fast  delivery  or  parts? 

No 

Yes 

if  not  warranty 
$25  line  item 

If  yes,  does  this  charge 
cover  the  following? 

- Fast  delivery 

N/A 

Yes 

Yes 

- Same-day  shipping 

N/A 

No 

Yes 

* Within  6 months,  15%  of  parts  (up  to  $1  million)  for  parts  credit.  Restocking  fee  - 20%. 
N/A  = Not  applicable 


INPUT 


e>  1989  by  INPUT.  Reproduction  prohIbKed. 


December  1989 


15 


Exhibit  L 


VAR  Requirements 

Vendor  Comparison — Support  Centre  Access 


Question 

Compaq 

Digital 

IBM** 

Is  the  technical  support 
hotline  centrally  located 
or  in  several  locations? 

Central 

Three 
locations 
in  U.S. 

Central 

Are  specialists 
immediately  accessible  or 
is  the  dealer  usually 
called  back? 

Called 

back 

Called 

back 

Called 

back 

Do  the  operators  log  in  the 
calls  and  provide  status  reports 

Yes 

Yes 

Yes  * 

How  is  the  success  of  the 
hotline  measured? 

Response 
time  vs. 
objectives 

Customer 

satisfaction 

survey 

Response 
time,  close-out 
time,  satisfaction 
sun/ey 

How  are  the  technical 
representatives  trained? 

Formal 
classroom 
on  each 
product 

Formal 

hardware 

and  software 

training, 

programmed 

instruction 

Formal 
hardware 
and  software 
training, 
self  study 
courses 

* IBM  also  has  an  electronic  mail  system  in  conjunction  with  its  database  search  that  allows  dealers  to  log 
in  customers  rather  than  through  the  response  centre  operator. 


**  In  1988,  the  centre  logged  in  265,000  calls. 


© 1 989  by  INPUT.  Reproduction  prohibKed. 


INPUT 


16 


Service  Update 


Exhibit  M 


VAR  Requirements 

Vendor  Comparison — Support  Centre  Access 


Question 

Compaq 

Digital 

IBM 

Is  telephone  technical 
support  provided  to  the 
following,  and  is  there 
a separate  charge  for 
this  support? 

Telephone 

support/ 

charge 

Telephone 

support/ 

charge 

Telephone 

support/ 

charge 

- Dealers  who  do  not 
service 

N/A 

Yes/No 

N/A 

- Dealers  who  service 

Yes/No 

N/A 

Yes/No 

- Authorised  servicers 

Yes/No 

N/A 

N/A 

- End  users 

No/N/A 

Yes/Yes 

No/N/A 

Is  a response  time 
guaranteed  for  telephone 
technical  support? 

No 

No 

No  ** 

What  is  the  average 
response  time? 

3 minutes 

Depends  on 
product  and 
contract 

Information 

not 

available 

“Objective  is  80%  in  less  than  2 hours;  high  priority  is  100%  in  1 hour. 
N/A  = Not  applicable 


INPUT 


© 1989  by  INPUT.  Reproduaion  prohibited. 


December  1989 


17 


Exhibit  N 


Var  Requirements 

Vendor  Comparison — Support  Centre  Access 


Question 

Compaq 

Digital 

IBM  ** 

How  is  the  following 
information  provided  to 
dealers? 

How  * / 
charge 

How  * / 
charge 

How  * / 
charge 

- Open  hardware  problems 

P ***/No 

B/No 

B/No 

- Open  software  problems 

N/A 

B/No 

B/No 

- Engineering  change 
notices  (hardware) 

P **7No 

B/No 

B/No 

- Software  temporary  fixes 

N/A 

B/No 

B/No 

- Software  updates 

N/A 

B/No 

B/No 

* How;  P = Paper 

B = Both  Paper  and  Electronic 

**  IBM  has  an  electronic  dealer  bulletin  board  system  that  allows  database  search.  IBM  reports  that 
it  has  not  had  to  make  engineering  changes  on  PCs  and  do  not  have  many  application  software 
products. 

***  Technical  bulletins,  service  advisories. 

N/A  = Not  applicable 


@ 1989  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 


18 


Supporting.  ..from  page  14 

technical  support  staff)  allows 
them  to  bypass  an  unnecessary 
step  in  the  problem  call  routing 
process.  Support  centre  staff 
usually  have  two  levels  of 
expertise:  level  I staff,  which 
have  the  task  of  filtering  out 
user-related  errors  and  simple 
problems;  and  level  n staff, 
which  tackle  the  more  difficult 
problems  requiring  a higher 
level  of  expertise.  Resellers 
should,  through  education  and 
training,  be  able  to  handle 
problems  requiring  level  I 
expertise.  The  problems  they 
forward  to  the  vendor's  support 
centre,  one  can  assume,  would 
be  those  requiring  senior-level 


expertise.  The  dealer's  direct 
line  to  senior  technical  staff 
would  facilitate  quicker  turn- 
around. 

If  the  support  centre,  working 
with  the  reseller,  is  not  able  to 
find  a resolution  to  a problem, 
the  vendor  should  still  follow 
through,  either  by  dispatching 
field  personnel  or,  if  the  plat- 
form size  allows,  replacing  the 
system. 

Maintenance 
Documentation  and 
Training 

In  order  to  encourage  dealers  to 
shoulder  as  much  of  the  support 


burden  as  possible,  vendors 
should  make  available  to  the 
resellers  the  knowledge  and 
training  needed  to  provide 
support.  Hardware  and  soft- 
ware maintenance  documenta- 
tion should  be  provided  free  or 
sold  to  VARs.  Exhibit  O pres- 
ents the  policies  of  IBM,  Digital 
and  Compaq  in  these  areas. 

Vendors  should  also  require 
VARs  to  train  support  personnel 
on  the  vendors'  systems.  The 
vendor  can  provide  these 
courses  either  for  a fee,  or 
package  the  education  and 
training  component  with  the 
system.  The  latter  is  preferable, 
simply  because  resellers  are  less 
likely  to  balk  at  sending  support 


Exhibit  O 

VAR  Requirements 

Vendor  Comparison — Documentation  and  Training 


Question 

Compaq 

Digital 

IBM 

Item  required  to  certify 
others  to  service 
products 

Required/ 

separate 

charge 

Required/ 

separate 

charge 

Required/ 

separate 

charge 

Hardware  training 

Yes/No 

N/A 

Yes/No 

(number 

limited) 

Software  training 

N/A 

N/A 

Yes/No 

Hardware  documentation 

Yes/No 

Yes/No 

Yes/No 

Software  documentation 

N/A 

N/A 

Yes/No 

N/A  = Not  applicable 


INPUT 


© 1989  by  INPUT.  Reproduction  prohibited. 


December  1989 


19 


personnel  in  for  training  if  there 
are  no  direct  fees  involved.  The 
vendor  can  recover  its  education 
and  training  costs  through 
higher  product  prices  or 
through  special  contract  ar- 
rangements. 

VAR  Incentives 

With  vendors  now  using  alter- 
nate distribution  channels  to  sell 
maintenance  contracts,  the  issue 
of  VAR  compensation  for 
service  contract  sales  comes  up. 
Exhibit  P illustrates  the  two 
approaches  to  compensating 
VARs. 

Under  Method  A,  the  vendor 
pays  the  reseller  a straight  com- 


mission on  contract  sales.  The 
vendor  is  responsible  for  pro- 
viding maintenance  services 
and  administrating  the  account. 
The  reseller  takes  no  part  in 
service  delivery  or  administra- 
tion. 

Under  Method  B,  the  vendor 
sells  the  service  contract  to  the 
reseller,  who  in  turn  resells  the 
contract  with  or  without  a profit 
margin.  The  reseller  may 
pacl^ge  the  vendor's  service 
with  its  own,  and  is  responsible 
for  screening  problem  calls  and 
administrating  the  account. 

Because  resellers  in  Category  B 
assume  more  responsibilities, 
they  should  be  given  the  oppor- 


tunity to  earn  more  profit  than 
would  those  resellers  under 
Category  A.  Simply  said,  the 
discounts  offered  to  resellers  op- 
erating under  Method  B should 
be  greater  than  the  commissions 
offered  to  resellers  operating 
under  Method  A.  These  incen- 
tives provide  for  greater  com- 
pensation for  those  resellers  as- 
suming more  of  the  support 
burden;  otherwise  the  VAR, 
with  its  own  support  capabili- 
ties, might  elect  to  sell  its  own 
service,  resulting  in  lost  account 
control  for  the  vendor.  ■ 


Exhibit  P 

Two  Approaches  to  Compensating  VARs 

Method  A: 

Compensate  reseller  on  a commmission  basis 

Vendor — Provides  service  and  administrates  account 
Reseller — Sells  contract  only 

Method  B: 

Sell  service  contract  to  reseller  at  a discount 

Vendor — Sells  service  contract  to  reseller  at  a 
discount:  provides  backup  support 

Reseller — Resells  contract  (with  or  without 

profit  margin):  packages  contract  with  its  own  service 


© 1989  by  INPUT,  Reproduction  prohibited. 


INPUT 


About  INPUT 


INPUT  provides  planning  information,  analysis,  and  recommendations 
to  managers  and  executives  in  the  information  processing  industries. 
Through  market  research,  technology  forecasting,  and  competitive 
analysis,  INPUT  supports  client  management  in  making  informed 
decisions. 

Continuous-information  advisory  services,  proprietary  research/ 
consulting,  merger /acquisition  assistance,  and  multiclient  studies  are 
provided  to  users  and  vendors  of  information  systems  and  services 
Software,  processing  services,  turnkey  systems,  systems  integration, 
professional  services,  communications,  systems /software 
maintenance  and  support). 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior 
management  positions  in  operations,  marketing,  or  planning.  This 
expertise  enables  INPUT  to  supply  practical  solutions  to  complex 
business  problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a 
leading  international  research  and  consulting  firm.  Clients  include  more 
than  100  of  the  world's  largest  and  most  technically  advanced 
companies. 


INPUT  OFFICES 


North  America 


International 


Headquarters 


Europe 

Piccadilly  House 
33/37  Regent  Street 
London  SWIY  4NF,  England 
(01)  493-9335 

Telex  27113  Fax  (01)  629-0179 


1280  Villa  Street 

Mountain  View,  CA  94041-1194 

(415)  961-3300 

Telex  171407  Fax  (415)  961-3966 


New  York 

959  Route  46  East,  Suite  201 
Parsippany,  NJ  07054 
(201)  299-6999 

Telex  134630  Fax  (201)  263-8341 


Paris 

52,  boulevard  de  Sebastopol 
75003  Paris,  France 

(33-1)  42  77  42  77  Fax  (33-1)  42  77  85  82 


Washington,  D.C. 
1953  Gallows  Road 
Vienna,  VA  22182 


(703)  847-6870  Fax  (703)  847-6872 


Tokyo 

Saida  Building 
4-6,  Kanda  Sakuma-cho 
Chiyoda-ku,  Tokyo  101,  Japan 
(03)864-0531  Fax  (03)  864-4114 


Route: 


INPUT 

Service 

Update 


© INPUT 


A Publication  from  INPUT’S  Customer  Service  Programme — Europe 

January  1990 


IN 

1 

Ferrari — Profile  of  a Fast-Growing  Company 

THIS 

ISSUE: 

5 

Disaster  Recovery  News 

6 

Snippets 

7 

A Message  from  INPUT’S  Managing  Director 

Ferrari  Holdings — Profile  of  a Fast-Growing 
Company 


Evolution 

Ferrari  Technical  Services,  part 
of  the  Ferrari  Group,  claims  to 
be  the  third  largest  independent 
maintenance  company  in  the 
United  Kingdom. 

Turnover  for  the  Ferrari  Group 
as  a whole  is  expected  to  reach 
£60  million  ($98  million)  in  1989, 
with  the  Technical  Services 
division  accounting  for  around 
£12  million  ($20  million)  and 
more  than  230  of  the  Group's 
850  employees. 

Established  in  1975,  the  Ferrari 
Group  has  grown  particularly 
rapidly  since  its  merger  with 
Cifer  early  in  1989.  Exhibit  A 
plots  the  acquisitions  made  by 
Ferrari  as  part  of  its  strategy  for 
growth. 


Ferrari's  approach  to  company 
selection  is  to  first  identify 
whether  or  not  the  target  com- 
pany provides  a "service". 


Secondly,  the  profitability  of  the 
company  is  determined.  Next, 
the  ease  and  speed  with  which 
the  company  can  be  disposed  of, 
should  the  merger  prove  unsuc- 
cessful, is  estimated.  Lastly,  any 
"feeder"  business  that  might  be 
generated  as  a result  of  the 
acquisition  is  taken  into  ac- 
count. 


Structure 

In  January  1989,  the  Ferrari 
Group  reorganised  its  business 
divisions  into 
individual  lim- 
ited companies. 
The  intention  was 
to  identify,  and 
then  focus  on,  the 
most  profitable 
areas  of  the 
Group's  business. 
Profitable  companies  would  be 
developed,  loss-makers  would 
be  shed.  Ferrari  thus  moved 
from  a position  where  costs 
were  shared  centrally  to  a 
position  where  it  assumed  the 
role  of  a holding  company. 
Exhibit  B illustrates  current 


Continued  on  next  page 


^ Group  turnover 
£60  million  ^ 


Service  Update 


2 


Ferrari.  . .from  page  1 

structure,  with  each  limited 
company  reporting  directly  to 
the  board  of  directors.  The 
names  of  acquired  companies 
are  used  only  where  appropri- 
ate. Future  acquisitions  will  be 
attached  to  this  structure. 

The  performance  of  individual 
companies  is  monitored  by  a 
management  team.  The  man- 
agement team  is  responsible  for 
ensuring  that  each  company  is 
managed  on  a commercial  basis, 
and  for  achieving  organisational 
and  cultural  changes  necessary 
to  ensure  profitable  operation  of 
the  companies. 

Ferrari  Technical 
Services 

Ferrari  Technical  Services 
provides  a range  of  services 
including  computer  mainte- 
nance, software  and  application 
support  and  training. 


^ Third  Largest 
Independent 
Maintenance 
Company  in  the 

U.K. 


Exhibit  A 

Ferrari  Group  Acquisition  Path 


Much  of  Technical  Services' 
business  comes  from  other  com- 
panies within  the  Group,  al- 
though it  does  have  its  own 
active  sales  force.  Ferrari's 
companies  are  under  no  obliga- 
tion to  direct  maintenance 
business  to  Ferrari  Technical 
Services,  which  often  competes 


INPUT 


for  such  business  with  other  in- 
dependent maintenance  compa- 
nies. The  structure  of  Ferrari 
Technical  Services  is  outlined  in 
Exhibit  C. 

The  Customer  Services  division 
is  organised  into  Northern  and 
Southern  regions  (Exhibit  D). 


The  Southern  region  is  by  far 
the  largest,  accounting  for  a 
turnover  of  around  £9.5  million 
($16  million)  in  1989,  which 
compares  with  a figure  of  £2.5 
million  ($4  million)  for  the 
Northern  region.  The  customer 
services  division  is  claimed  by 
Ferrari  to  be  the  third  largest 


01990  by  INPUT.  Reproduaior  prohibited. 


January  1990 


Service  Update 


3 


Exhibit  B 

Ferrari  Holdings  Pic 


independent  maintenance 
company  in  the  U.K. 

Ferrari  Technical  Services 
employs  230  staff,  most  of 
whom  are  employed  in  the 
Customer  Services  Southern 
region.  This  figure  includes  ap- 
proximately 120  service  and 
support  staff,  30  Service  Centre 
engineers  and  around  80  ad- 
ministration, sales  and  manage- 
ment staff. 

January  1990 


The  majority  of  Technical 
Services  revenue  is  derived 
from  third-party  maintenance 
(TPM)  business.  Fourth-party 
maintenance  (FPM)  business  is 
growing,  and  at  present  comes 
largely  from  servicing  a variety 
of  printers,  mostly  laser  print- 
ers. Ferrari  claims  to  have 
provided  maintenance  services 
to  most  TPM  companies  in  the 
United  Kingdom,  and  in  addi- 

e 1990  by  INPUT.  Reproduction  prohibited. 


tion  to  have  product  sales  and 
service  partnerships  with  a 
number  of  major  manufacturers, 
including  those  listed  in 
Exhibit  E. 

Technical  Services  specialises  in 
the  service  of  networks,  particu- 
larly Novell  and  Token  l^ng, 
and  concentrates  on  smaller 
networks,  (i.e.,  those  with  up  to 
20  terminals). 

Logistics,  customer  call  control, 
technical  support,  cabling 
services  and  the  running  of 
Ferrari's  Service  Centres  is 
handled  by  Central  Operations 
(Exhibit  F).  These  functions 
have  been  kept  separate  in 
order  to  ease  the  strain  on 
Customer  Services. 

From  January  1990,  a Field 
Service  Management  System 
purchased  from  Pinnacle  will  be 
used  in  conjunction  with  an 
Altos  2000/25  central  processor, 
with  the  aim  of  providing  a 
single  point  of  access  for  all 
customer  calls. 


Other  Services 


Ferrari  Technical  Services  also 
offers  a variety  of  training 
courses.  Operating  systenis 
UNIX,  PICK,  DOS  and  OS/2  are 
covered,  as  well  as  Networking, 
LAN  Manager  and  Novell 
Netware.  Ferrari  training  also 
provides  more  standard  courses 
on  word  processing,  desktop 
publishing  and  database  sys- 
tems. 


Major  Strengths 

Ferrari  claims  one  of  its  main 
advantages  to  be  its  product 
skills,  particularly  in  network- 
ing. Also,  Ferrari  believes  that 

Conlinued  on  next  page 


INPUT 


Service  Update 


4 


F CTTUVi. . .from  page  3 


Exhibit  C 

Ferrari  Technical  Services 

Les  Fe reday 

Director  and  General  Manager 
Ferrari  Technical  Services 


Exhibit  D 

Customer  Services  Organisation 

Northern  Region  - £2.5  Million  ($4  Million) 


its  relationship  with  major 
manufacturers  has  enabled  it  to 
expand  the  range  of  products 
supported,  whilst  enhancing  the 
skill  level  of  its  engineers,  most 
of  whom  are  trained  by  the 
manufacturers. 

• In  addition,  Ferrari  claims  that 
its  "commercial"  approach  to 
management  is  key  to  providing 
an  efficient  and  reactive  service 
to  its  customers.  This  includes 
good  contract  administration 
and  invoicing,  and  the  ability  to 
deliver  services  that  meet  exact 
specification  by  conforming  to 
customer  requirements. 

Future  Plans 

Ferrari  Holdings  intends  to 
pursue  its  strategy  of  growth  by 
acquisition  for  the  foreseeable 
future,  and  in  1990  expects  to 
acquire  additional  companies. 


^ Strategy  of 
Growth  by 
Aquisition.  ^ 


Scotland 


Northern 

Ireland 


Manchester 


Birmingham 


Southern  Region  - £9.5  Million  ($16  Million) 


Large 

Computer 

Systems 

Products 

London 

London 

Central 

Central 

South 

East 


South 

West 


The  independent  maintenance 
business  is  forecast  to  grow  by 
20%  in  1990.  Ferrari  expects 
much  of  this  increased  business 
to  come  from  acquired  compa- 
nies or  to  be  taken  from  its  com- 
petitors, and  is  less  concerned 
about  the  growth  rate  of  the 
TPM  market  as  a whole. 
Fourth-party  maintenance 
business  is  expected  to  continue 
to  develop. 

Other  areas  of  business  Ferrari 
intends  to  expand  are  cabling 


INPUT 


© 1990  by  INPUT.  Reproduaion  prohibited. 


January  1990 


5 


Exhibit  E 


Major  Partners 


IBM 

Apricot 

3 Com 

Altos 

Novell 

Retix 

Epson 

Fortune 

Digital 

Bull 

Tandon 

Toshiba 

Compaq 

Zenith 

Hewlett- 

Packard 

services  and  training.  In  1990  it 
plans  to  double,  and  possibly 
treble,  end-user  training  reve- 
nues. ■ 


Disaster 

Recovery 

News 


In  the  last  issue  of  Service  Up- 
date, INPUT  reported  that  in 
aiming  at  a pan- European 
disaster  recovery  operation, 
Comdisco  was  planning  to  link 
major  European  cities  into  a 
network  of  disaster  recovery 
centres.  These  plans  included 
the  linking  of  Frankfurt,  Paris, 
London  and  Manchester. 


More  recent  information  indi- 
cates that  Comdisco  is  planning 
to  become  a worldwide  pro- 
vider of  disaster  recovery 
services.  In  pursuit  of  achieving 
its  objective  of  providing  world- 
wide disaster  recovery  services, 
Comdisco  has  signed  a memo- 
randum of  understanding  with 
Computer  Engineering  Systems, 
a Sineapore-based  companv.  A 


Exhibit  G 

Strengths  of  Ferrari  Technical  Services 

• Customer  engineer  skills 

• Product  expertise 

• Partnerships  with  major  manufacturers 

• Commercial  management  approach 


division  of  Singapore  Technolo- 
gies Industrial  Corporation, 
Computer  Engineering  Systems 
already  provides  the  only 
disaster  recovery  service  in  the 
region,  and  is  developing 
services  in  other  countries. 

The  memorandum  of  under- 
standing relates  to  a joint  ven- 
ture between  Comdisco  and 
Computer  Engineering  Systems, 
providing  disaster  recovery 


January  1990 


e 1990  by  INPUT.  Reproduction  prohibited. 


Continued  on  next  page 

INPUT 


Service  Update 


6 

Disaster.  . .from  page  5 

services  throughout  the  Asia- 
Pacific  region.  Existing  opera- 
tions will  likely  be  extended  to 
Japan,  Hong  Kong,  Taiwan, 
Malaysia  and  Australia,  and 
perhaps  further. 


Comdisco  already  has  25  sites  in 
North  America  and  4 sites  in 
Europe  offering  disaster  recov- 
ery services  to  2000  customers. 

From  January  1990,  Comdisco 
Oisaster  Recovery  Services 
(CDRS)  will  offer  a new  service. 


CDRS  Net  service  will  link 
multiple  recovery  functions 
achieved  through  the  use  of 
fibre  optics,  microwave  technol- 
ogy, and  telecommunications 
gateways  from  AT  &T.  ■ 


*>  Following  the  acquisition  of  ITL  by  Apricot, 
it  has  been  confirmed  that  35%  of  ITL's 
workforce  (170  staff)  will  be  made  redundant. 
Two  of  ITL's  facilities  at  Kernel  Hempstead 
will  close.  In  addition.  Apricot  staff  levels 
will  be  reduced,  mainly  in  the  area  of  sales 
and  administration.  Staff  reductions  within 
ITL  are  likely  to  be  mainly  in  the  areas  of 
hardware  manufacturing. 

❖ Ferrari  Holdings,  profiled  in  this  issue  of 
Service  Update,  is  planning  to  acquire  what  re- 
mains of  the  maintenance  and  service  com- 
pany MBS. 

❖ Rank  Xerox  is  not  renewing  a maintenance 
contract  with  Thompson  CSF,  valued  at 
£60,000  ($98,000).  Instead,  Rank  Xerox  is  con- 
sidering using  Digital  to  maintain  its  VAX 
systems  at  Welwyn  Garden  City  in  the  U.K. 

It  is  claimed  that  reductions  in  staffing  levels 
at  Rank  Xerox  have  reduced  the  need  for  the 
level  of  service  that  was  provided  by 
Thompson  CSF. 

❖ Europe's  largest  independent  maintenance 
company,  Granada  Computer  Services,  is 
providing  a warranty  service  for  equipment 
vendors,  dealers  and  distributors.  The 
service  offering,  called  Manufacturer  Support 
Programme,  covers  primary  to  extended 
warranty,  through  either  an  on-site  or  return 
to  base  service.  The  services  will  be  available 
from  several  european  centres. 


❖ In  the  U.K.,  IBM  is  in  the  process  of 
finalising  agreements  with  dealers  that 
will  enable  IBM  to  provide  maintenance 
of  any  vendor's  hardware.  The  original 
plan  was  for  the  service  to  be  available 
from  the  beginning  of  1990.  The  new 
service,  part  of  IBM's  Enterprise  Service 
Agreement,  is  aimed  at  providing  single- 
source service  to  users,  and  will  likely 
involve  the  use  of  subcontracted  re- 
sources. 

❖ Altos  Computer  SA  and  3M  in  France, 
have  announced  a joint  venture  mainte- 
nance subsidiary.  The  joint  venture, 
named  Technical  Maintenance  Comput- 
ing (TIM),  is  51%  owned  by  Altos  and 
49%  by  3M.  It  is  believed  that  both  West 
Germany  and  the  U.K.  are  included  in 
these  plans,  with  West  German  operations 
commencing  around  the  end  of  1989  or 
the  beginning  of  1990,  and  those  in  the 
U.K.  around  mid-1990. 

❖ Ferranti  International  Pic  has  sold  its 
Service  and  Maintenance  division  to 
ServiceTec,  a maintenance  company  based 
in  Stevenage,  U.K.  The  sale,  valued  at  £17 
million  ($28  million),  includes  the  Ferranti 
Computer  Systems  Support  Centre. 
Ferranti  retains  a 5%  shareholding  in  the 
newly  financed  company,  ServiceTec. 
Funding  for  the  acquisition  was  provided 
by  venture  capital  companies  and  banks. 


Snippets 


INPUT 


e 1990  by  INPUT.  Reproduction  prohibited. 


January  1990 


Service  Update 


A Message  from  INPUT'S  Managing  Director 

Customer  Service  in  the  1990s 


7 


I believe  that  the  next  ten  years 
will  be  a time  of  challenge, 
change  and  opportunities  for 
customer  service  organisations. 
1989  was  a difficult  year  for 
most  equipment  vendors,  as 
squeez^  margins  on  hardware 
sales  and  a general  slackening  in 
demand  for  equipment  took 
effect.  Independent  mainte- 
nance companies  faced  increas- 
ing competition  from  equip- 
ment vendors  in  the  U.S.A  and 
Europe. 

All  major  vendors  are  working 
to  increase  the  range  of  non- 
hardware support  services  that 
they  offer  to  customers.  This  is 
leading  to  the  concept  of  the 
account  team  that  sells  and 
services  the  client.  The  equip- 
ment salesman  is  one  member 
of  the  team — equally  important 
are  the  other  support  members, 
for  example,  the  professional 
services  consultant  or  the  net- 
work services  consultant. 

The  supplier  thus  presents  to 
the  client  a team  that  demon- 
strates a range  of  caT'.'''Uities — 
in  particular  the  al  lO 
present  a ''businey  mtion"  to 
the  customer. 

The  idea  of  selling  "business  so- 
lutions" is  certainly  not  new, 
but  the  effective  implementation 
of  it  is  still  a major  challenge  for 
equipment  suppliers.  In  par- 
ticular, the  middle  management 
in  companies  may  find  it  the 
hardest  to  adjust  to  the  change. 
The  senior  management  is  fully 
convinced  of  the  need  to  de- 
velop this  integrated  approach. 


The  field  sales  and  support 
forces  are  typically  directly 
motivated  to  sell  the  range  of 
services  by  having  direct  sales 
quotas  of  support  services  as 
well  as  equipment  quotas. 
Today's  sales  forces  are  "Profes- 
sional Services"  salespeople — 
the  hardware  is  just  one  element 
of  the  solution.  Middle  manag- 
ers will  have  to  change  their 
approach.  This  will  be  difficult, 
since  their  success  has  been 
built  on  the  traditional  hard- 
ware sales  and  hardware  main- 
tenance business. 

Users  are  increasingly  seeking 
outside  solutions  to  their  com- 
plex computing  needs.  Typi- 
cally, the  in-house  data  process- 
ing department  is  late  in  pro- 
ducing new  systems,  has  a very 
high  backlog  of  applications, 
and  finds  it  difficult  to  recruit 
suitably  skilled  staff.  Hence  the 
rapid  growth  in  the  systems  in- 
tegration market  and  facilities 
management  (systems  opera- 
tions) markets  in  Europe.  Both 
these  markets  are  being  analy- 
sed and  their  opportunities 
forecast  in  INPUT'S  new  report. 
Systems  Integration  Programme — 
Europe. 

One  of  the  attractions  for  facili- 
ties management  suppliers  is 
that  it  is  a natural  follow-on  for 
a company  that  has  designed 
and  installed  a complex  system 
for  a client.  Who  better  to  run 
and  maintain  the  installations 
(and  even  own  the  equipment) 
than  the  supplier  who  built  the 
system?  Operating  and  sup- 
porting the  system  for  the 


customer  provides  an  annual 
source  of  renewable  revenues. 

IBM  is  exploiting  this  market  in 
the  U.S.  and  in  Europe,  compet- 
ing with  such  companies  as  An- 
dersen Consulting,  EDS, 
Hoskyns,  CSC,  and  SD-Scicon. 

INPUT'S  1990  Customer  Service 
Programme — Europe  report  will 
look  in  more  depth  at  the  trends 
in  service  and  needs  as  seen  by 
major  users.  For  many  years, 
INPUT  has  researched  the  levels 
of  satisfaction  with  services  pro- 
vided by  suppliers.  However, 
the  qualitative  approach,  with 
in-depth  interviews  of  users, 
wiU  provide  a better  under- 
standing of  users'  needs  for 
different  types  of  current  and 
future  services,  and  their  atti- 
tudes towards  single-source 
service  providers  . 

INPUT  will  also  continue  to 
measure  customer  satisfaction 
trends  in  European  services 
with  a programme  of  telephone 
interviews. 

Our  Service  Updates  are  now 
monthly,  in  response  to  demand 
from  our  clients. 

Thank  you  for  your  continuing 
support  of  our  research  and 
consultancy. 


Managing  Director 


January  1990 


© 1 990  by  INPUT.  Reprodudion  prohibited. 


INPUT 


INPUT  provides  planning  information,  analysis,  and  recommendations  to 
managers  and  executives  in  the  information  processing  industries. 
Through  market  research,  technology  forecasting,  and  competitive 
analysis,  INPUT  supports  client  management  in  making  informed 
decisions. 

Continuous-information  advisory  services,  proprietary  research/ 
consulting,  merger /acquisition  assistance,  and  multiclient  studies  are 
provided  to  users  and  vendors  of  information  systems  and  services 
(software,  processing  services,  turnkey  systems,  systems  integration, 
professional  services,  communications,  and  systems /software 
maintenance  and  support). 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior 
management  positions  in  operations,  marketing,  or  planning.  This 
expertise  enables  INPUT  to  supply  practical  solutions  to  complex  business 
problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a 
leading  international  research  and  consulting  firm.  Clients  include  more 
than  100  of  the  world's  largest  and  most  technically  advanced  companies. 

INPUT  OFFICES 


North  America 

Headquarters 
1280  Villa  Street 
Mountain  View,  CA  94041-1194 
(415)  961-3300 

Telex  171407  Fax  (415)  961-3966 
New  York 

959  Route  46  East,  Suite  201 
Parsippany,  NJ  07054 
(201)  299-6999 

Telex  134630  Fax  (201)  263-8341 

Washington,  D.C. 

1953  Gallows  Road,  Suite  560 

Vienna,  VA  22182 

(703)  847-6870  Fax  (703)  847-6872 


International 

Europe 

Piccadilly  House 
33/37  Regent  Street 
London  SWIY  4NF,  England 
(01)  493-9335 

Telex  27113  Fax  (01)  629-0179 
Paris 

52,  boulevard  de  Sebastopol 
75003  Paris,  France 

(33-1)  42  77  42  77  Fax  (33-1)  42  77  85  82 
Tokyo 

Saida  Building 
4-6,  Kanda  Sakuma-cho 
Chiyoda-ku,  Tokyo  101,  Japan 
(03)864-0531  Fax  (03)  864-4114 


Route: 


INPUT 


Service 

Update 


© INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — Europe 

February  1990 


IN 

THIS 

ISSUE: 


1 APT — Europe's  Largest  Fourth-Party  Maintenance  Company 

5  U.K.  Government  Updates  Maintenance  Policy 

6  News  from  the  USA 

7  Snippets 


APT — Europe’s  Largest  Fourth-Party 
Maintenance  Company 


Applied  Peripherals  Tech- 
nology (APT)  was  estab- 
lished in  1983  as  a wholly 
owned  subsidiary  of  Applied 
Magnetics  Corporation  (AMC). 
In  1989,  revenues  reached  $6 
million  and  APT  now  claims  to 
be  the  largest  fourth-party 
maintenance  company  in  Eu- 
rope. One  of  the  key  factors  in 
APT's  success  is  the  credibility  it 
has  achieved  due  to  ownership 
by  AMC. 

AMC  was  founded  in  Goleta, 
California  in  1957.  Today  the 
company  has  around  70%  of  the 
world  market  for  the  manufac- 
ture of  magnetic  heads  used  in 
disk  and  tape  drives,  supplying 
OEMs  in  the  peripheral  data 
storage  industry.  AMC  now  has 
22  factory  facilities  in  eight 
countries,  including  seven  in 


Europe.  The  company  employs 
over  9,500  people  worldwide 
and  1988  net  sales  reached  $293 
million  (see  Exhibit  A). 

Applied  Peripherals 
Technology 

E>uring  the  early  1980s,  AMC 
embarked  on  a project  to  repair 
disk  drives  with  a number  of 
OEMs.  The  business  proved 
successful  and  it  was  decided  to 
establish  a subsidiary  company, 
APT.  Exhibit  B provides  a 
breakdown  of  APT's  revenue 
over  the  last  two  years,  and  a 
1990  European  forecast. 

The  APT  operation  now  has  six 
repair  facilities  worldwide, 
providing  repair,  refurbishment 
and  remanufacturing  service  on 


disk  drives  and  tape  streamers. 
There  are  two  European  repair 
facilities  based  in  Ehiblin,  Eire, 
(adjacent  to  AMC's  drive  manu- 
facturing plant)  and  Tumhout, 
Belgium,  (adjacent  to  AMC's 
tape  head  factory).  Despite 
their  close  proximity,  the  APT 
and  AMC  facilities  are  separate 
legal  entities.  The  repair  facili- 
ties have  a combined  Class  100 
clean  room  floor  space  of  7,000 
square  feet. 

In  addition  to  the  repair  centres, 
APT  runs  three  European 
logistics  centres  at  Chester 
(U.K.),  Frankfurt  (serving 
Germany,  Austria  and  Switzer- 
land), and  Paris  (serving  France, 
Spain  and  Portugal).  The  joint 

Continued  on  next  page 


Service  Update 


2 


APT.  .from  page  1 

AMC/APT  European  Head- 
quarters is  based  in  Brussels. 

By  mid-1990,  APT  expects  to 
employ  350  direct  staff  at  the 
two  centres.  The  majority  of 
repair  work  is  carried  out  at  the 
Tumhout  facility  and  APT 
claims  this  facility  to  be  the 
largest  in  Europe.  It  repairs 
4,000  - 6,000  drives  per  month 
and  over  200  drive  types,  in- 
cluding 3 1 /2,  5 1 /4 , 8,  and  14 
inch  disk  drives.  The  company 
has  a strict  policy  of  not  sub- 
contracting repairs  to  other 
parties. 

Since  1986,  the  Tumhout  facility 
has  supported  not  only  OEMs, 
but  a variety  of  different  compa- 
nies. APT  believes  that  centrali- 
sation is  critical  in  providing  the 
economies  of  scale  necessary  to 
support  such  a complex  and 
capital-intensive  activity.  It  was 
realised  at  the  company's  outset 
that  the  European,  rather  than 
the  highly  competitive  U.K. 
market  alone,  should  be  ad- 
dressed. APT's  European 
operations  are  coordinated  in 
Bmssels;  the  company's  man- 
agement stmcture  is  outlined  in 
Exhibit  C. 

APT  believes  its  success  in  disk 
repair  is  largely  the  result  of  its 
close  relationsliip  with  Original 
Equipment  Manufacturers 
(OEMs).  APT  will  not  repair 
drives  without  the  full  approval 
and  cooperation  of  the  drive 
manufacturer.  It  should  be 
noted  that  whilst  APT's  parent 
company,  AMC,  is  by  far  the 
largest  supplier  of  disk  and  tape 
magnetic  heads  in  the  world, 
proprietary  information  regard- 
ing the  specification  of  such 
products  is  not  communicated 

INPUT 


Service  Update 


Exhibit  C 


European  Management  Structure  of  APT 


S.P.  Buchanan 

Vice  President,  European  Operations 
Sales  and  Manufacturing 


Roger  Zeelmaekers 

Garrett  Connery 

Christopher  Aho  | 

Vice  President 

Vice  President 

Vice  President 

European 

Manufacturing 

European  Finance 

European  Sales 

Paul  Redmond 
General  Manger 
Tape  Heads 
Dublin,  Eire 


Eddy  Verlinden 
General  Manager 
APT/MDI  Repair 
Turnout,  Belgium 


Rik  Trots 
General  Manager 
Disk  Heads 
Turnout,  Belgium 


Siggi  Wohifarht 

Fred  De  Gryse  | 

Vice  President 

Vice  President  | 

Head  Sales 

APT/MDI  Repair  | 

Sales  I 

David  Lea 
General  Manager 
U.K.  & Scandinavia 
APT/MDI  Sales 


J.N.  Lelouer 
General  Manager 
France 

APT/MDI  Sales 


Fred  De  Gryse 

C.E.  Chorman 

Acting  General  Manager 

General  Manager 

Benelux 

Germany/Austria 

APT/MDI  Sales 

APT/MDI  Sales 

February  1990 


0 1990  by  INPUT.  Reproduction  prohibited. 


Conlinued  (7|  'J* 


Service  Update 


APT.  . .from  page  3 


Exhibit  D 


OEMs  Officially 
Supported  by  APT 


Toshiba 

Hitachi 

JVC 

Synquest 

CDC/Imprimus 

Wangtek 

Microscience 

Irwin 

Miniscribe 


to  APT.  Information  can  only 
be  provided  by  the  OEM,  and 
management  of  this  approach  to 
confidentiality  is  key  to  APT's 
ongoing  relationships  and 
success.  The  OEMs  that  APT 
officially  supports  are  listed  in 
Exhibit  D. 

As  the  price  of  disk  and  tape 
storage  has  fallen  throughout 
the  1980s,  manufacturers  have 
responded  by  producing  ever 
more  sophisticated  drives 
employing  modem  manufactur- 
ing techniques.  Without  highly 
sophisticated  repair  facilities, 
many  drives  would  be  irrepa- 
rable and  the  cost  of  reverse 
engineering  would  be  greater 
that  the  cost  of  production. 

APT  uses  production  line 
techniques  in  the  repair  process. 
Equipment  for  repair  is  in- 
spected on  arrival,  bar-coded 
and  the  packaging  checked  for 
re-use.  APT  has  recruited 

INPUT 


engineers  with  specialist  knowl- 
edge in  the  design  of  particular 
OEM  products 
(cognisant  engi- 
neer is  the  term 
used),  who  are 
responsible  for 
the  quality  of 
repair  work 
carried  out. 

These  engineers 
design  the  repair 
process,  produce 
appropriate 
documentation 
and  interface 
with  the  OEM 
customers. 

Set-up  costs  for 
the  repair  of  disk 
drives  is  high, 
and  a market  the 
size  of  Europe  is 
required  before  a 
return  on  investment  can  be 
expected.  Significant  returns 
only  last  for  a period  of  around 
2 years,  peaking  as  warranty 
levels  decline. 

Whilst  the  risks  of  this  level  of 
investment  remain  high,  APT 
benefits  from  its  relationship 
with  AMC,  which  is  able  to 


modify  the  servo-writer  machin- 
ery required  by  APT  in  the 
repair  of  more  sophisticated 
drives.  The  servo-writers, 
together  with  the  tooling  and 
customising  they  require,  often 
cost  $300,000  or  more  to 
develop.  By  employing  the 
expertise  of  AMC,  APT  is  able 
to  reduce  the  costs  of  develop- 
ment by  up  to  two-thirds.  The 
major  strengths  claimed  by  APT 
are  summarised  in  Exhibit  E. 

APT's  service  offering  is  not 
restricted  to  drive  repair.  As  il- 
lustrated in  Exhibit  F,  APT  also 
provides  technical  revision 
services  to  incorporate  recent 
technology  into  older  products, 
and  end-of-life  manufacturing 
support  for  OEMs  no  longer 
wishing  to  support  ageing 
products.  In  addition  to  these 
services,  drive  analysis  and  data 
recovery  services  are  offered  to 
OEMs  and  larger  companies. 

Future  Plans 

APT  believes  that  the  1990s  will 
see  the  continued  erosion  of 
common  technology  platforms. 

As  these  constants  disappear, 
product  developments  become 
less  predictable 
or  manageable, 
firm  relationships 
with  OEMs  will 
be  even  more 
critical.  Reverse 
engineering  will 
become  stiU  more 
difficult,  particu- 
larly for  larger 
products,  which 
APT  expects  to 
become  fewer  in 
number  yet  more 
sophisticated. 

Investment  in 
optical  storage 

February  1990 


Exhibit  E 

Major  Strengths 
of  APT 

• Relationships  with 
OEMs 

• AMC  experience  and 
expertise 

• Economies  of  scale 

• Specialist  engineer  skills 


e 1990  by  INPUT.  Reprcxludion  prohibited. 


Service  Update 


Exhibit  F 

APT  Service 
Offerings 


• Drive  repair 

• Technical  revision 
services 

• End-of-life 
manufacturing 

• Drive  analysis 

• Data  recovery 


technology  by  parent  company 
AMC  has  been  high,  and  APT 
expects  to  be  well  positioned 
when  the  appropriate  skills  are 
required.  However,  APT  fore- 
see magnetic  storage  technology 
developing  for  many  years  to 
come,  with  optical  storage 
opportunities  restricted  by 
existing  scientific  know-how  to 
certain  niche  markets. 

As  APT's  operations  reach  a 
critical  mass  in  individual  coun- 
tries, a major  objective  will  be  to 
improve  logistics  and  extend 
existing  stock  exchange  facili- 
ties. Additional  logistics  centres 


are  likely  to  be 
added  to  the  four 
currently  operat- 
ing. These 
would  most 
likely  be  located 
in  Scandinavia  or 
southern  Europe, 
in  the  Mediterra- 
nean area. 

Another  area  of 
business  APT 
hopes  will  grow 
is  end-of-life 
manufacturing, 
due  to  the  short- 
ening life-span  of 
products  intro- 
duced into  the 
market.  In 
addition,  APT  will  shortly  be 
introducing  a special  service 
aimed  particularly  at  companies 
which  hold  sensitive  informa- 
tion on  disk  and  are  reluctant  to 
release  faulty  disk  drives  for  off- 
site repair.  Training  and  on-site 
support  will  be  provided  to 
enable  customers  to  remove 
media  and  perform  other  secu- 
rity operations  themselves  prior 
to  releasing  the  faulty  disk 
drives  for  repair. 

APT  attributes  its  continued 
success  to  its  partnerships  with 
OEMs.  It  believes  these  rela- 
tionships to  be  the  key  to  sur- 


5 

vival  in  the  FPM  business,  citing 
the  notable  failure  of  more  than 
one  venture  as  proof  that  no 
significant  repair  company  can 
hope  to  succeed  simply  by 
targeting  its  business  at  the 
customers  of  manufacturers. 

At  time  of  going  to  press,  APT 
informed  INPUT  of  its  new 
relationship  with  U.S.  disk  drive 
manufacturer  Miniscribe.  AMC 
has  agreed  to  write  off  an  $18 
n.illion  debt  owed  to  it  by 
Mini&..  '^e,  in  return  for  the 
exclusive  ,’ght  to  repair 
Miniscribe's  disk  storage  prod- 
ucts. 

Also,  APT  advised: 

• That  it  has  recently  signed  a 
contract  for  end-of-life  manu- 
facture of  five  products  with 
one  company,  which  will  be 
carried  out  in  its  facility  in 
Dublin. 

• It  is  looking  into  the  possibil- 
ity of  opening  a third  repair 
facility  in  Europe  in  1990 

• That  it  is  investigating  oppor- 

tunities within  the  Eastern 
Bloc  countries  (outside 
Russia)  and  is  looking  for 
likely  partners  in  this 
venture.  ■ 


U.K.  Government  Updates  Maintenance  Policy 


A statement  of  policy  re- 
garding single-source 
maintenance  has  been  released 
by  the  Central  Computer  and 
Telecommunications  Agency 
(CCTA),  the  U.K.  government 
advisory  body,  to  suppliers  of 
systems  and  services  to  the  gov- 


February  1990 


emment.  INPUT  spoke  to  the 
CCTA  to  gain  a clearer  under- 
standing of  the  policy  and  its 
implications. 

The  CCTA  claims  that  in  certain 
instances  significant  cost  sav- 
ings have  been  achieved  by 

e 1990  by  INPUT.  Reproduction  prohibited. 


awarding  maintenance  contracts 
for  entire  sites  or  product  types 
to  single  suppliers,  on  a com- 
petitive basis.  In  addition  to  cost 
reductions,  the  CCTA  claims 
other  benefits  such  as  improved 
service  quality,  reduced  admin- 
istrative overheads,  greater 

Continued  on  next  page 

INPUT 


Service  Update 


6 

U.K.  updates.  .from  page  5 

flexibility  and  the  opportunity 
to  maintain  obsolete  equipment 
previously  excluded  from  a 
maintenance  agreement. 

The  CCTA  already  provides 
advice  and  guidance  in  the  form 
of  Standing  Arrangements  and 
draft  Operational  Requirements. 
Standing  Arrangments  have 
been  established  by  the  CCTA 
with  a number  of  suppliers,  to 
enable  departments  to  identify 
and  select  companies  which  can 
maintain  a variety  of  products 
of  the  same  type,  such  as  laser 
printers  or  PCs.  The  draft 
Operational  Requirement  is 
designed  for  use  by  depart- 
ments with  more  complex 
requirements,  such  as  the 


maintenance  of  all  systems  and 
peripherals  on  a site. 

The  CCTA  has  re-emphasised 
the  government's  intention  to 
continue  down  the  SSM  route, 
and  has  stated  its  desire  to 
overcome  existing  problems 
which  it  believes  are  caused  by 
suppliers'  unwillingness  to 
cooperate  with  single-source 
maintainers.  Availability  of 
spares  and  diagnostics,  engi- 
neering software  and  documen- 
tation are  cited  as  particular 
problem  areas. 

Suppliers  of  equipment  and 
services  to  the  government  have 
been  asked  to  state  clearly  their 
policy  regarding  sites  on  which 
they  have  a presence  but  do  not 
provide  hardware  maintenance 
services.  Suppliers  who  reduce 


the  level  of  software  support 
or  raise  its  costs  would  not  be 
considered  as  future  suppliers 
to  the  government.  Spares 
and  engineering  diagnostic 
software  are  expected  to  be 
made  freely  available.  Suppli- 
ers are  also  asked  under  what 
circumstances  they  would 
consider  bidding  for  SSM 
business,  and  whether  or  not 
they  would  require  a major 
presence  on-site  before  doing 
so. 

Single-source  maintenance 
does  not  appear  to  be  an  issue 
for  the  U.K.  government 
alone,  for  as  the  CCTA  points 
out,  an  EC/GATT  Services  E>i- 
rective  requiring  advertising 
of  public  sector  service  con- 
tracts is  scheduled  for  intro- 
duction in  mid-1991.  ■ 


News  from  the  USA 


IBM  Announces 
Selective  Price 
Increases  for 
Maintenance 

In  mid-December,  IBM  an- 
nounced increases  in  the  Mini- 
mum Maintenance  Charges  for 
IBM  Maintenance  Agreement 
Service  and  Warranty  Options 
for  selected  IBM  and  non-IBM 
products,  largely  displays  and 


printers.  These  increases  be- 
come effective  April  1, 1990  for 
monthly  maintenance.  Charges 
billed  on  a quarterly  or  annual 
basis  will  be  effective  with  the 
beginning  of  the  next  billing 
period  after  April  1, 1990.  The 
effective  date  for  state  and  local 
government  customers  is  April 
1, 1990,  or  the  beginning  of  the 
customer's  next  focal  year  after 
January  1, 1990,  whichever  is 
later. 

The  price  increases  range  from 
8%  to  40%,  depending  on  the 
products  and  the  type  of  con- 


tract. Increases  for  products 
with  monthly  charges  ranged 
from  8%  to  10%,  while  mainte 
nance  products  billed  on  an 
annual  basis  increased  by  9% 
to  40%. 

Many  of  the  products  that 
were  exclude  from  the 
November  1989  3%  price 
increase  were  part  of  this 
annual  increase.  ■ 


© 1990  by  INPUT.  RepfOduOicxi  prohibited. 


February  1990 


INPUT 


Service  Update 


7 


Snippets 


❖ IBM  UK  has  reduced  maintenance  agreement 
charges  for  the  4381  and  3081  by  20%  and  15% 
respectively.  This  announcement  follows  the 
6%  maintenance  charge  increase  IBM  UK 
made  in  September  1989  for  products  other 
than  the  4381  and  3081.  (For  more  on  IBM 
maintenance  prices,  see  News  from  the  USA.) 

❖ TekServ  Computer  Services  Ltd,  a division  of 
MAI  Holdings,  claims  to  offer  support  to  users 
of  Wang  VS300  computers  25%  cneaper  than 
Wang  does.  Fixed-price  maintenance  con- 
tracts for  Wang  processors  and  peripherals  are 
available,  with  response  times  varying  from  2 
to  8 hours,  depending  on  user  requirements. 

❖ Sequel  Inc,  disk  repairer  for  Unisys  in  Santa 
Clara,  is  now  offenng  similar  services  to  other 
manufacturers  of  head-disk  assemblies. 

Sequel  claims  to  employ  over  600  staff,  includ- 
ing 100  engineers  and  scientists  with  several 
years  experience  in  the  disk  drive  industry. 

The  company  also  claims  to  have  over  350,000 
square  feet  of  manufacturing  and  engineering 
space,  including  40,000  square  feet  of  clean 
room  area.  Repair  services  for  14",  9"  and  8" 
drives  will  be  offered  to  both  OEMs  and  inde- 
pendent service  firms. 

❖ ACT  Computer  Su^ort,  the  result  of  the 
merger  of  Apricot  Computer  Systems  with 
DDT  Pic  and  TTL's  maintenance  arm,  will  pro- 
vide support  services  and  maintenance  for  the 
micros  and  mainframes  of  a variety  of  manu- 
facturers. The  company  aims  to  specialise  in 
the  provision  of  hardware  service  of  UNIX- 
bas^  systems. 

❖ Thomainfor,  the  TPM  company  owned  by 
Thompson  SA,  has  acquired  the  Belgian  main- 


tenance company  General  Electronics 
Manufacturing  from  Societe  Generale  de 
Belgique  SA  and  Groupe  AG. 

❖ TIE/Communications  Inc.  is  close  to  for- 
malising an  agreement  which  will  enable  it 
to  provide  support  services,  warranty  and 
maintenance  for  the  entire  small  business 
systems  customer  base  of  U.S.  West  Com- 
munication Inc. 

❖ IBM  in  the  U.S.  has  introduced  an  end  user 
support  programme  for  PC  users.  Desktop 
systems  covered  include  IBM  PS/2s,  IBM 
PCs  and  compatibles  and  Macintoshes,  on 
sites  where  numbers  are  sizeable. 

For  $30  a month  per  machine,  users  will 
receive  handholding  services  consisting  of 
24-hour,  seven-day-a-week,  toU-free  help 
desk  support.  A number  of  applications 
are  covered,  including  Lotus  1-2-3,  dBase 
III  and  Display  Write  5.  Support  will  be 
provided  by  a dedicated  organisation  in 
Tampa,  Florida,  which  will  utilise  IBM's 
knowledge-based  systems,  on-line  docu- 
mentation and  remote  diagnostics.  As 
yet,  IBM  in  Europe  has  not  announced 
plans  to  introduce  a similar  service. 

SMT  Groupil  SA  will  supply  3,500  personal 
computers  to  the  Soviet  Union,  following 
an  order  for  1,000  machines  from  the  state 
agricultural  planning  body,  Gosagropro- 
gram.  Groupil  will  establish  a maintenance 
service  to  support  users,  and  in  a joint  ven- 
ture with  the  Soviet  enterprise  Chanin- 
steor,  aims  to  market  its  products  more 
widely  in  the  USSR.  ■ 


February  1990 


© 1990  by  INPUT.  Reproduction  prohibited. 


INPUT 


About  INPUT 


INPUT  provides  planning  information,  analysis,  and  recommendations  to 
managers  and  executives  in  the  information  processing  industries. 
Through  market  research,  technology  forecasting,  and  competitive 
analysis,  INPUT  supports  client  management  in  making  informed 
decisions. 


Continuous-information  advisory  services,  proprietary  research/ 
consulting,  merger /acquisition  assistance,  and  multiclient  studies  are 
provided  to  users  and  vendors  of  information  systems  and  services 
(software,  processing  services,  turnkey  systems,  systems  integration, 
professional  services,  communications,  and  systems /software 
maintenance  and  support). 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior 
management  positions  in  operations,  marketing,  or  planning.  This 
expertise  enables  INPUT  to  supply  practical  solutions  to  complex  business 
problems. 


Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a 
leading  international  research  and  consulting  firm.  Clients  include  more 
than  100  of  the  world's  largest  and  most  technically  advanced  companies. 


INPUT  OFFICES 


North  America 

Headquarters 
1280  Villa  Street 
Mountain  View,  CA  94041-1194 
(415)  961-3300 

Telex  171407  Fax  (415)  961-3966 
New  York 

959  Route  46  East,  Suite  201 
Parsippany,  NJ  07054 
(201)  299-6999 

Telex  134630  Fax  (201)  263-8341 

Washington,  D.C. 

1953  Gallows  Road,  Suite  560 

Vienna,  VA  22182 

(703)  847-6870  Fax  (703)  847-6872 


International 

Europe 

Piccadilly  House 
33/37  Regent  Street 
London  SWIY  4NF,  England 
(01)  493-9335 

Telex  27113  Fax  (01)  629-0179 
Paris 

52,  boulevard  de  Sebastopol 
75003  Paris,  France 

(33-1)  42  77  42  77  Fax  (33-1)  42  77  85  82 
Tokyo 

Saida  Building 
4-6,  Kanda  Sakuma-cho 
Chiyoda-ku,  Tokyo  101,  Japan 
(03)864-0531  Fax  (03)  864-4114 


Route: 


INPUT 

Service 

Update 


© INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — Europe 

March  1990 


IN 

THIS 

ISSUE: 


1 ....Hitachi  Data  Systems — Integrated  Services  Division 

4 ....Hitachi  Data  Systems — Independent  Maintenance  Operations 

in  the  United  States 

4. ...Unisys  U.S.  Maintenance  Activities 

5 ....News  from  the  USA 
7 ....Snippets 


Hitachi  Data  Systems 

Integrated  Services  Division — A Provider  Of  Customer-Led  Service 


The  integrated  services 
division  of  Hitachi  Data 
Systems  seems  to  be  in  a 
position  today  where  many 
other  services  companies  would 
like  to  be.  The  company 
considers  that  it  has  responded 
to  the  changes  in  the  services 
industry  and  met  clients' 
demands  for  total  service  from  a 
single  supplier. 

Background 

Hitachi  Data  Systems  (HDS) 
markets  and  services  mainframe 
computers  and  peripherals  and 
employs  2,200  people  in  32 
countries.  It  was  formed  in 
1979,  when  National 


Semiconductor,  which  was  then 
selling  mainframes  through  Itel 
Corporation  with  Hitachi, 
purchased  Itel's  computer 
operations.  The  organisation 
was  then  called  National 
Advanced  Systems  (NAS).  In 
April  1989,  Hitachi  Ltd.  and 
Electronic  Data  Systems 
Corporation  (EDS)  jointly 
acquired  NAS  and  the  company 
was  relaunched  as  Hitachi  Data 
Systems.  This  new  name  was 
designed  to  reflect  the  80% 
ownership  by  Hitachi  with  EDS 
holding  the  remaining  20%. 
Hitachi  believed  that  the 
acquisition  of  NAS  strengthened 
its  position  in  the  plug- 
compatible  equipment  market. 
HDS  considers  that  the 


combination  of  Hitachi's 
expertise  in  hardware  with  EDS' 
software  development 
capabilities  will  better  equip  the 
company  to  respond  to  the 
needs  of  its  customers. 

HDS  benefits  from  the  strength 
of  its  corporate  backing.  Hitachi 
is  one  of  the  largest  industrial 
concerns  in  the  world,  with  total 
revenues  approaching  $50 
billion,  as  shown  in  Exhibit  A. 

Hitachi  places  great  emphasis 
on  R&D.  The  amount  spent  on 
R&D  last  year  was  up  13%  and 
represented  5.8%  of  total  sales. 
Special  attention  was  focussed 
on  electronics,  semiconductors 

Continued  on  next  page 


Service  Update 


2 

Hitachi.  .from  page  1 

and  computers,  to  satisfy  the 
demand  for  increased 
processing  power.  HDS  is 
included  in  the  Information  and 
Communication  Systems  and 
Electronic  Devices  Division,  in 
which  sales  increased  by  19%  in 
1989,  with  the  computer  sector 
experiencing  particularly  high 
growth.  The  financial 
performance  of  the  division  is 
also  shown  m Exhibit  A.  In 
response  to  the  spread  of 
distributed  systems,  Hitachi 
introduced  a new  series  of  small 
machines,  the  M-620  series,  with 
a newly  developed  operating 
system,  VOS  K. 

The  corporate  direction  of  HDS 
is  based  on  a strategic  plan 
which  incorporates  the 
Integrated  Services  division  as 
an  important  element.  In  the 
U.K.,  the  organisation  is  run 
jointly  by  the  operations 
manager,  Jeff  Holton  and  the 
sales  and  marketing  manger, 
Peter  Duff. 

HDS  Integrated  Services  was 
first  set  up  in  the  U.K.  and  has 
grown  to  the  point  where  it  now 
accounts  for  25%  of  HDS' 
customer  services  revenues. 

1990  will  see  this  grow  to 
around  33% 

Its  customers  include:  Castrol 
(U.K.)  Ltd,  Comhill  Insurance 
and  AST  Transact  (formally 
Royal  Bank  of  Canada  Systems). 

Conception 

About  3 years  ago,  the 
Customer  Service  and  Support 
division  of  HDS  re-evaluated  its 
strategies.  In  view  of  the  trend 


Exhibit  A 

Hitachi  Ltd.  Revenue  Growth,  1987-1989 


Q Hitachi,  Total  Revenue 

^ Information  and  Communication  Systems 
and  Electronic  Devices  Revenue 


towards  more  reliable  machines 
and  customer  demand  for  more 
than  just  piecemeal  hardware 
and  software  service  solutions, 
HDS  decided  that  the  way 
forward  was  to  offer  the  client  a 
total  service  package:  all 
mainframe  computer  hardware 
maintenance  would  be 
undertaken  by  HDS,  regardless 
of  vendor.  Integrated  Services, 
a specialist  division  within 
Customer  Service  and  Support, 
began  to  develop  strategies  to 
enter  this  market.  The  support 
offered  involves  placing  an  HDS 
engineer  on  the  customer  site  to 
totally  manage  the  servicing 
requirements  of  all  the  clients' 
computer  equipment.  The  HDS 
engineers  are  able  to  service 
IBM  and  Hitachi  equipment 
themselves,  and  the  servicing  of 
other  equipment  is 


subcontracted — usually  to  the 
original  vendor,  although  in 
some  cases  the  subcontract  is 
awarded  to  a third-party 
organisation.  HDS  has 
agreements  with  over  50 
vendors  that  allow  the  HDS 
engineer  to  liaise,  on  behalf  of 
the  client,  with  these  other 
vendors.  HDS  claims  that  it  has 
more  vendor  liaison  experience 
than  any  other  company  in  the 
U.K. 

HDS  claims  that  this  method  of 
providing  service  relieves  the 
client  of  the  huge  burden  of 
calling  out  engineers  from 
different  vendors  and  dealing 
with  the  contractual  aspects  of 
each.  The  on-site  HDS 
representative  takes  on  all 
necessary  tasks  to  ensure  that 
the  equipment  is  returned  to  full 


INPUT 


© 1990  by  INPUT.  Reprodudlon  prohibited. 


March  1990 


Service  Update 


operational  status  with 
minimum  disruption  to  the 
users'  activities.  One  person 
taking  on  the  management  of  all 
equipment  service  reduces  the 
operating  overheads  of  most 
multivendor  sites.  In  some 
cases,  the  HDS  engineer  carries 
out  remote  diagnostics  and 
remedial  action  for  the  other 
vendors.  Very  often,  HDS 
claims  that  the  expertise  and 
experience  of  the  engineer  can 
save  unnecessary  call-outs  and 
he  can  often  pinpoint  the 
problem  very  quickly.  HDS 
claims  that  the  on-site  engineer 
is  able  to  fix  80-90%  of  problems 
hiniself  and  is  qualified  to 
provide  additional  skills  besides 
hardware  fault  resolution.  The 
on-site  engineer  is  often  viewed 
as  a member  of  the  client  team 
and  has  even  appeared  on  a 
client's  own  organisational 
chart. 

Current  Strategy 

HDS  is  working  within  a well- 
defined  niche  market,  and 
though  admitting  to  not  being 
the  most  inexpensive  provider 
of  service,  does  claim  to  be  the 
most  comprehensive.  Its 
customers  tend  to  be  the  larger 
IBM  sites  based  in  London  and 
the  south  of  England.  Exhibit  B 
illustrates  HDS'  service 
positioning.  HDS  does  not 
intend  targetting  the  price- 
sensitive  sector  of  the  market, 
but  is  aiming  at  local  users  who 
prefer  service  from  vendors. 
HDS'  policy  of  subcontracting 
back  single-source  service  to  the 
equipment  vendor  allows  it  to 
satisfy  clients'  needs.  The  value 
of  a typical  contract  is  around 
$500  thousand.  HDS  does  have 
some  smaller  contracts,  but  does 


March  1990 


3 


Exhibit  B 


HDS  Service  Positioning 


25%  of  Users 


HDS  Position 


not  actively  seek  them.  Very 
often,  HDS  claims,  business  is 
generated  by  recommendation. 

It  also  appears  that  HDS  can 
afford  to  pick  and  choose  its 
clients:  work  is  turned  away  if 
HDS  believes  that  it  is  not  suited 
to  the  job. 

HDS'  recruitment  policy  is  "to 
find  the  best,"  and  the  job  is 
presented  to  recruits  as  "the  job 
for  the  engineer  of  the  future,"  a 
new  career  path.  The  role  of  the 
engineer  is  changing — the 
engineer  is  now  seen  more  and 


more  as  a consultant,  and  a key 
requirement  is  skill  in  customer 
liaison  and  account 
management. 

Future  Strategy 

HDS  claims  to  have  identified  a 
niche  market,  but  there  is 
further  work  to  be  done  before  a 
totally  integrated  solution  can 
be  offered.  Exhibit  C shows 
HDS'  view  of  its  current 
position. 


Exhibit  C 

HDS'  View  of  Its  Current  Position 
in  Providing  Service  Solutions 


Concept 

Implement 

Maturity — Total 
Service  Solution 

Embryo  — 

► Infant  — 

A 

— ► Adult 

Past 

Current 

Future 

0 1990  by  INPUT.  Reproduction  prohibited. 


Conlinued  on  next  page 

INPUT 


Service  Update 


4 

Hitachi.  .from  page  3 

HDS  sees  a need  to  increase  its 
expertise  in  software.  A certain 
amount  of  systems  software 
support  is  already  offered  in 
some  cases,  but  HDS  hopes  to 
make  it  a fomnal  offering  by  the 
start  of  1991.  Leading  on  from 
this,  HDS  plans  to  tackle 
applications  software  with  the 
objective  of  adding  this  to  its 
portfolio  by  1992.  There  are 
numerous  other  enhancements 
to  be  considered,  such  as 
networks  and  office  systems 
These  have  been  handled  in  a 
growing  number  of  cases  where 
the  transition  has  naturally 
occurred  on  an  informal 
customer-by-customer  basis. 
However,  a country-wide 
structure  hs  recently  been  put 


into  place  which  can  now 
support  distributed  equipment 
as  long  as  they  are  serviced  by  a 
large  central  mainframe  site. 
HDS'  portfolio  has  potential  for 
further  growth  with  the 
provision  of  environmental 
services.  HDS  has  had 
experience,  for  example,  of 
managing  the  move  of  a 
customer's  computer  room. 

That  the  market  for  services 
such  as  those  offered  by  HDS 
exists  is  supported  by  INPUT'S 
user  research,  which  indicates 
that  in  1989  almost  80%  of  users 
had  a preference  for 
single-source  service.  Many 
other  service  companies  are 
formulating  plans  now  to  put 
into  place  similar  'total  service' 
mechanisms,  a factor  also 


supported  by  INPUT  research 
data.  HDS'  geographical 
coverage  is  limited,  however,  by 
the  size  of  its  operation.  HDS  is 
formulating  plans  for  growth 
and  discussions  are  now  taking 
place  on  a nationwide  basis 
with  large  mainframe  users. 
HDS  is  also  planning  for  its 
future  growth  into  Europe. 
Currently,  HDS  has  two 
contracts  in  France  and  has  won 
a contract  for  a major  site  in 
Holland  within  the  last  four 
months.  These  contracts  are 
handled  by  the  local  customer 
service  and  support 
organisation  in  each  country. 
Expansion  plans  into  Europe  are 
being  actively  pursued.  The 
ultimate  aim  is  to  provide  a 
truly  total  service  solution.  ■ 


Hitachi  Data  Systems — 

Independent  Maintenance  Operations  in 
the  United  States 


HDS'  U.S.  operation  in  Santa  Clara,  California 
has  been  active  in  the  independent 
maintenance  market  for  five  years.  In  1988,  it 
reported  $15  million  of  revenues  from  independent 
maintenance,  this  figure  is  expected  to  have  grown 
by  about  15  % for  1989.  Gary  Moore  is  president  of 
the  organisation. 

The  company  has  75  service  locations  covering  the 
whole  of  America.  It  has  some  450  employees,  of 
which  347  are  field  engineers,  60  are  in  field 
support  and  30  in  service  management. 

The  company  maintains  a wide  range  of  machines, 
including  nnainframes,  minis,  superminis  and 
micros.  It  also  supports  peripherals, 
telecommunications  and  front  end  processors. 


Brands  supported  include  IBM,  Hitachi,  STC. 
Magnuson  and  Telex. 

In  addition  to  hardware  and  software 
maintenance,  HDS  undertakes  manufacturer 
warranty  work,  preventive  maintenance  and 
refurbishment.  Recognising  the  need  to  be  able 
to  provide  additional  services,  HDS  also  offers 
training  and  consultancy  services. 

AU  HDS'  business  is  contract-based  and  the 
support  is  always  delivered  on  the  customer 
site.  HDS  operates  in  a number  of  vertical 
markets,  including  manufacturing,  utilities, 
insurance,  federal  and  local  government,  and 
banking  and  finance.  HDS  believes  that  its 
competitors  are  other  manufacturers.  ■ 


INPUT 


e 1 990  by  INPUT.  Reproduclion  prohibKed. 


March  1990 


Service  Update 


5 


Unisys  U.S.  Maintenance  Activities 


Unisys  has  been  active  in 
the  Ti'M  market  for  five 
years.  Its  president  is  Mr. 
Gazerwitz  and  in  1988  Unisys 
derived  revenues  of  $35  million 
from  TPM. 

It  is  a large  operation,  with  a 
total  of  9,000  employees 
involved  in  service.  7,200  of 
these  are  field  engineers. 

Unisys  has  339  service  locations, 
including  64  repair  depots  and 
one  parts  depot.  The  company 
offers  its  services  throughout 
the  United  States,  including 
non-continental  US. 

Support  is  provided  for 
mainframes,  minis,  micros. 


peripherals,  telecommuni- 
cations equipment  and  local 
area  networks.  A wide  range  of 
brands  is  supported,  including: 


Epson 

• 

Mannesmann 

DEC 

• 

NEC 

Compaq 

• 

Panasonic 

Fujitsu 

• 

QMS 

Toshiba 

• 

Genicom 

Wyse 

• 

Hewlett- 

Packard 

Unisys  provides  a range  of 
services: 

• Manufacturer  warranty  work 

• Software  maintenance 

• Training 


• Refurbishment 

• Installation/relocation 

• Preventive  maintenance 

• Remedial  maintenance 

• Consultancy 

• ECO/FCO  (change  orders) 

• Conversions/upgrade 

Most  of  their  business  (90%)  is 
contract  based  with  the 
remaining  10%  being  hourly 
per-call.  Unisys  is  targeting 
various  vertical  markets, 
including  transportation, 
distribution,  services,  medical, 
banking  and  finance.  ■ 


News  from  the  U.S.A 


by  clients  in  the  United  States. 
The  first  is  indicative  of  the 


increased  interest  in  the  training 
and  education  sector. 

Question:  What  maintenance 
and  support  programs  are 
available  from  the  major 
hardware  manufacturers  for 
higher  education  institutions? 

Answer:  INPUT  addressed  the 
education  programs  available 


from  DEC,  Apple,  IBM,  and 
Hewlett-Packard  in  the  U.S 
December  1989  newsletter.  The 
programs  are  recapped  below, 
along  with  those  from  Unisys 
and  Wang. 

Apple — Apple  offers  four  levels 
of  purchase  discounts:  Educator 
Buy  (teachers  receive  discount 
on  individual  purchases). 
Student  Buy  (students  finance 
purchases  through  the  Federal 
Student  Loan  Program), 
Institutional  Buy  ^ulk 
purchases  by  the  institution), 
and  Contractual  Agreement 
(campus  bookstore  acts  as  a 
reseller  to  students,  faculty,  and 
stafO.  Under  the  Contractual 
Agreement  purchase,  Apple 
trains  the  university  staff  to 


maintain  and  repair  the 
equipment  and  helps  the 
university  establish  an  on-site 
repair  depot. 

DEC — DEC  provides  the 
Campus-Wide  Educational 
Service  Program  to  assist  the 
university  or  institute  to  become 
self  sufficient.  Under  the 
program,  DEC  will  train  the 
institute's  staff  in  maintenance 
and  repair,  provide  a 50% 
discount  on  parts,  and  assist  in 
establishing  an  on-site  repair 
depot  to  be  staffed  by  the 
university  or  institute's 
employees. 

HP — Hewlett-Packard  does  not 
offer  any  special  service 
discounts  directed  to 

Continued  on  next  page 


March  1990 


© 1990  by  INPUT.  Reproducllon  prcphibited. 


INPUT 


Service  Update 
6 


U.S.  News.  . .from  page  5 

universities  or  educational 
institutions.  HP  considers  each 
institutional  purchase  to  be  an 
opportunity  for  a custom 
purchase  agreement. 

IBM — IBM's  Educational 
Allowances  program  offers 
discounts  on  all  hardware  and 
software  purchases,  while  the 
national  educational  prices 
apply  to  microcomputers  and 
related  software.  To  be  eligible 
for  these  discounts,  the 
institution  or  university  must  be 
an  accredited,  nonprofit 
institution  of  higher  education 
and  the  equipment  must  be  for 
its  own  use,  and  installed  for  at 
least  two  years  before  selling. 
There  are  no  special  pricing 
schedules  or  discount  programs 
for  service — regular  service 
schedules  apply. 

Unisys — Unisys  does  not  offer 
any  special  standard  discounts 
for  higher  education 


maintenance  and  support 
procurements.  However,  there 
is  usually  a custom  negotiation 
for  maintenance  on  a case-by- 
case basis,  depending  on  the 
particular  requirements  of  the 
institution.  Unisys  will  train  the 
university's  people  in 
maintenance  on-site  or  at  a 
Unisys  training  centre,  at  the 
standard  cost  schedules. 

Wang — Wang  does  not  offer  any 
special  discounts  for  hardware 
maintenance  to  educational 
institutions.  Exceptions  to  this 
include  cases  when  hardware 
donations  are  made  to  higher 
education  institutions;  service  is 
then  provided  free  or  at  a 
substantial  discount. 

Question:  Regarding  DEC'S 
VMS  software  upgrades,  does 
the  customer  have  to  be  under  a 
software  maintenance 
agreement  to  receive  upgrades? 
Are  the  upgrades  available  at  a 
discount  or  must  a whole  new 
package  of  software  be  pur- 
chased? 


Answer:  Software  upgrades  are 
available  from  DEC, 
independent  of  a software 
maintenance  contract. 

Upgrades  are  available  in  the 
following  manner. 

1.  As  part  of  a software 
maintenance  contract,  the 
upgrades  are  automatic  when 
the  company  subscribes  to 
the  Media  Documentation 
and  Distribution. 

2.  "A  la  Carte"  upgrades  are 
available  where  only  the 
upgrade  and  the 
documentation  are 
purchased. 

It  may  be  more  cost-effective 
under  the  software  maintenance 
agreement  if  the  system  is  to  be 
upgraded  regularly.  Purchasing 
the  individual  upgrades  is 
preferable  if  only  an  occasional 
upgrade  is  required.  ■ 

rmi 


INPUT  Examines  the  Service  Offerings  of 
the  Leading  Third-  Party  Maintainers 


The  updated  versions  of 
Service  Vendor  Analysis — 
Third-Party  Maintenance, 
Volumes  I & II  GJ.S.)  are  due  to 
be  released  by  the  end  of  the 
first  quarter. 

Volume  I of  Service  Vendor 
Analysis — Third  Party 
Maintenance  profiles  the  service 
organizations  of  the  top  ten 
TPM  service  providers  in  the 
United  States,  including 


revenues  from  service,  and 
service  coverage.  Each  profile 
begins  with  a brief  discussion  of 
the  organization  and  its 
significant  actions  over  the  past 
year.  Following  the  profiles,  the 
report  provides  summary  tables 
of  key  service  information  on 
the  profiled  companies  to  allow 
quick  comparisons.  Volume  II 
of  the  report  presents  a 
comprehensive  snapshot  of  the 


leading  100  service  vendors  in 
the  third-party  and  fourth-party 
support  market,  outlining 
demographic,  operational,  and 
strategic  information  on  the 
vendors  in  this  arena. 

These  reports  will  be  available 
in  Europe  from  INPUT  at  a cost 
of  £1,495.00  each.  ■ 


INPUT 


0 1990  by  INPUT.  Reproduction  prohibited. 


March  1990 


Service  Update 


7 


Snippets 


*1*  IPL  Systems  Inc.,  which  sells  IBM-compatible 
tape  drive  subsystems  and  add-on  memory  for 
IBM  machines,  now  has  a technical  support 
office  in  Zaventem,  Belgium,  which  will  be 
responsible  for  supporting  IPL's  European 
clients. 

*1*  Granada  has  released  impressive  turnover 
figures  for  1989:  £201  million  ($330  million),  an 
increase  of  around  66%  from  1988.  The  only 
additional  figures  currently  available  are  that 
Granada  France  achieved  1989  revenues  of 
£17.2m  ($28  million).  INPUT  estimates  that  75- 
80%  of  revenues  can  be  attributed  to 
independent  maintenance.  The  remaining 
revenue  is  derived  from  disaster  recovery 
services  and  DPCE  products.  DPCE  grew  by 
15%  last  year. 

♦>  Dixons'  maintenance  and  installation  business 
in  the  U.K.  has  been  bought  by  National 
Technical  Services  Ltd,  part  of  Bricom  PLC. 
Dixons  is  retaining  its  Mastercare 
after-sales  service  business. 

❖ Harwell  research  has  experimented  on  the 
effectiveness  of  smoke  detectors  in  computer 
rooms.  Research  has  found  that  as  computer 
rooms  are  air-conditioned  and  many  pieces  of 
equipment  contain  cooling  fans,  it  is  likely  that 
insufficient  smoke  reaching  the  alarm  causes  a 
malfunction  in  the  smoke  and  fire  precaution 
systems. 

❖ Digital  could  see  losses  for  the  first  quarter  (to 
31  March)  as  a result  of  the  cost  of  a major 
programme  of  voluntary  retirement.  This  is 


being  implemented  to  attempt  to  cut 
employee  numbers  by  as  many  as  8,000,  in 
response  to  the  sluggish  U.S.  computer 
market. 

❖ A new  entrant  to  the  U.K.  disaster  recovery 
market  is  General  Automation  Ltd.,  based  in 
Birmingham.  The  company  is  offering 
disaster  recovery  services  to  PICK  users  and 
claims  that  a leplacement  system  can  be 
installed  within  two  hours. 

❖ Nexus  Payment  Systems  of  Welwyn  Garden 
City,  U.K.,  and  Cap-RS  of  Walton-on- 
Thames,  U.K.,  are  the  first  to  launch  disaster 
recovery  systems  for  Stratus  and 
Stratus-compatible  systems.  The  companies 
offer  their  clients  immediate  access  to 
equipment  which  can  be  manned  by  either 
Stratus  or  the  client. 

❖ Otis,  one  of  the  world's  largest  lift 
manufacturers,  has  signed  a worldwide 
training  contract  with  Macmillan  Intek. 
Based  in  the  U.K.,  Macmillan  Intek  has 
agreed  that  Otis  can  reproduce  15  titles  from 
its  range  of  training  packages.  These 
packages  are  part  of  an  'Open  Learning' 
system,  based  on  books,  video  and  audio 
tapes.  The  package  for  Otis'  maintenance 
staff  includes  a special  lift  simulator  kit  to 
help  train  the  staff  in  the  latest 
microprocessor-controlled  lifts.  This 
addresses  the  problem  of  the  knowledge 
gaps  that  mechanics  experience  as  a result  of 
their  mechanical,  rather  than  electronic, 
engineering  backgrounds. 


March  1990 


O 1990  by  INPUT.  ReproducJion  prohibited. 


INPUT 


About  INPUT 


INPUT  provides  planning  information,  analysis,  and  recommendations  to 
managers  and  executives  in  the  information  processing  industries. 
Through  market  research,  technology  forecasting,  and  competitive 
analysis,  INPUT  supports  client  management  in  making  informed 
decisions. 

Continuous-information  advisory  services,  proprietary  research/ 
consulting,  merger/acquisition  assistance,  and  multiclient  studies  are 
provided  to  users  and  vendors  of  information  systems  and  services 
(software,  processing  services,  turnkey  systems,  systems  integration, 
professional  services,  communications,  and  systems /software 
maintenance  and  support). 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior 
management  positions  in  operations,  marketing,  or  planning.  This 
expertise  enables  INPUT  to  supply  practical  solutions  to  complex  business 
problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a 
leading  international  research  and  consulting  firm.  Clients  include  more 
than  100  of  the  world's  largest  and  most  technically  advanced  companies. 


INPUT  OFFICES 


North  America 

Headquarters 
1280  Villa  Street 
Mountain  View,  CA  94041-1194 
(415)  961-3300 

Telex  171407  Fax  (415)  961-3966 
New  York 

959  Route  46  East,  Suite  201 
Parsippany,  NJ  07054 
(201)  299-6999 

Telex  134630  Fax  (201)  263-8341 

Washington,  D.C. 

1953  Gallows  Road,  Suite  560 

Vienna,  VA  22182 

(703)  847-6870  Fax  (703)  847-6872 


International 

Europe 

Piccadilly  House 
33/37  Regent  Street 
London  SWIY  4NF,  England 
(01)493-9335 

Telex  27113  Fax  (01)  629-0179 
Paris 

52,  boulevard  de  Sebastopol 
75003  Paris,  France 

(33-1)  42  77  42  77  Fax  (33-1)  42  77  85  82 
Tokyo 

Saida  Building 
4-6,  Kanda  Sakuma-cho 
Chiyoda-ku,  Tokyo  101,  Japan 
(03)864-0531  Fax  (03)  864-4114 


* 


r 


.1 


\ 


f A.  i 


-7 


Route: 


INPUT 

Service 

Update 


© INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — International 


April  1990 

IN 

1 ....Cerco  Training  Ltd 

THIS 

7 ....Decision  Data  Service  Inc. 

ISSUE: 

9 ....PC/Workstation  Service  and  Support 

Requirements  Examined 

10  ...Questions  from  the  USA 

11  ...Snippets 

Cerco  Training  Ltd 

Customer  Service  Training — A New  Initiative 


There  is  an  acknowledged 
shortage  of  personnel  with 
the  right  skills  in  the  computer 
industry  and  this  shortage  will 
become  more  acute  as  the 
number  of  young  people 
entering  the  job  market 
continues  to  fall.  One  U.K. 
company,  Cerco  Training  Ltd, 
has  taken  steps  to  fill  the 
shortfall  of  sailed  personnel  in 
one  specialised  area: 


maintenance.  The  aim  of  the 
company  is  to  retrain  people  of 
all  ages,  from  all  walks  of  life,  in 
computer  maintenance  and  to 
equip  them  with  the  necessary 
skills  to  enable  them  to  take 
employment  as  field  service 
engineers.  Cerco  markets  its 
training  programmes  directly  to 
potential  trainees  in 
advertisements  in  national 
newspapers,  and  to  TPMs  and 
dealers  needing  personnel. 


Background 

Cerco  Ltd  was  formed  in  1988 
and  began  trading  in  April  1989 
as  a recruitment  consultancy. 
Cerco  Training  was  formed  in 
September  1989  to  provide 
training  for  people  wishing  to 
pursue  a career  in  maintenance, 
providing  that  they  have  an 
aptitude  for  such  work.  Cerco 


Continued  on  next  page 


Service  Update 


2 


Cerco.  . .from  page  1 


Ltd  and  Cerco  Training  now 
operate  separately.  Cerco  Ltd  is 
run  by  Alan  Fair  and  Cerco 
Training  is  managed  by  its 
founding  directors  John  Forster 
and  Roger  Parr.  Both  have 
extensive  experience  in  the 
maintenance  industry — John  as 
an  operations  manager  and 
Roger  as  a training  manager. 
Cerco  Training  also  employs  a 
personnel  manager,  three 
professional  instructors  and  a 
secretary.  Cerco  Training's 
mission  is  to  encourage  industry 
to  spend  more  on  training.  John 
sums  up  the  current  climate  by 
saying  that  there  is  "too  much 
poaching  and  not  enough 
coaching." 

The  concept  for  the  company 
goes  back  to  the  1960s  and  70s 
when  Control  Data  Institute  ran 
courses  that  were  perceived  as 
producing  motivated  engineers. 
At  first  it  received  partial 
government  funding,  then 
became  entirely  funded  by 
government  and  its  priorities 
changed.  The  directors  of  Cerco 
Training  believe  that  the  ability 
of  a maintenance  organisation  to 
expand  depends  on  its  success 
in  recruiting  and  retaining  good 
people.  They  believe  strongly 
that  training  should  begin  right 
at  the  bottom  of  the  career 
ladder,  and  should  be 
continuous,  thereby  offering  a 
definite  career  progression  and 
continuity  of  staff  for  the 
employer.  Cerco's  directors' 
previous  experience  had  taught 


them  that  if  companies  train 
their  staff  from  the  beginning 
and  continue  training 
throughout  an  employee's 
career,  the  result  is  quite  simply 
a drop  in  staff  turnover, 
sometimes  to  less  than  10%  a 
year. 


The  Benefits  of 
Training 

The  directors  believe  that 
training  saves  organisations 
money  in  the  long  term.  Many 
maintenance  organisations  are 
often  not  structured  to  provide 
training  at  the  right  level.  Their 
strategy  is  to  convince  industry 
that  training  is  an  investment, 
not  a cost.  They  feel  that  they 
have  a considerable  amount  of 
re-education  to  do  within  the 
industry,  as  the  training  budget 
is  often  the  first  economy  in  any 
cost  cutting  exercise.  The 
directors  see  enormous  benefits 
for  companies  that  invest  in 
training.  They  believe  that 
around  40%  of  costs  in  customer 
services  are  associated  with 
manpower.  If  a company  trains 
its  staff,  it  will  see 
improvements  in  the  quality 
and  productivity  of  its  staff. 

This  leads  to  greater  job 
satisfaction  and  reduced  staff 
turnover,  which  in  turn  leads  to 
a better  quality  of  service  to  the 
client,  better  relationships 
because  the  staff  turnover  has 
been  reduced,  and  a better 
understanding  of  clients' 
systems  and  needs. 


The  Seven-Week 
Course 

Cerco  Training  gives  people  the 
opportunity  to  re-skill. 

However,  the  directors  only 
accept  people  on  the  courses 
who  show  an  aptitude. 

Potential  students,  who  usually 
hear  of  Cerco  through  its 
advertisements  in  national 
newspapers,  are  invited  to 
attend  a series  of  tests  which 
takes  place  on  a Saturday,  either 
at  the  Cerco  training  centre  in 
Nantwich  or  at 

Imperial  College,  London.  The 
tests,  developed  by  the  National 
Institute  of  Industrial 
Psychology,  are  designed  to 
pick  out  only  those  candidates 
who  will  be  successful  on  the 
course.  There  are  three  tests — 
one  to  test  intelligence,  one  to 
test  mechanical  aptitude  and 
then  a practical  test — and  an 
interview  to  assess  the 
candidates'  motivation  and  to 
see  how  they  present 
themselves.  The  directors  of 
Cerco  are  convinced  of  the 
necessity  to  screen  their 
candidates  first,  even  though  its 
means  turning  away  over  75% 
of  the  applicants.  Their  aim  is  to 
produce  only  good,  highly 
motivated  engineers  who  can 
make  an  immediate 
contribution  to  a maintenance 
organisation. 

Once  accepted,  the  students  are 
given  a very  intensive  7-week 
course  covering  all  aspects  of 
maintaining  PC-based  systems, 
and  are  instructed  in  the  generic 


0 1990  by  INPUT.  Reproduction  prohibited. 


April  1990 


INPUT 


Service  Update 


principles  of  computer 
maintenance,  thus  providing  a 
sound  foundation  for  further 
product  training.  Customer 
relations  is  an  important 
element  of  the  course. 

Although  only  one  day  is 
specifically  devoted  to  the 
subject,  it  is  emphasised  during 
the  other  modules.  The 
directors  of  Cerco  see  that  the 
role  of  the  engineer  is  changing. 
Companies  are  no  longer 
looking  for  electronics  geniuses, 
but  for  an  ability  to  relate  well 
to  other  people  and  an  interest 
in  problem  solving.  The 
concept  of  quality  service  is  also 
stressed  early  on. 


The  lecturers  use  a mix  of 
conventional  teaching 
techniques.  Roger  Parr  believes 
that  the  most  important  thing 
about  teaching  methods  is  to 
use  a variety  of  them.  These 
include  video,  overhead 
projector,  35mm  slides  and 
white  boards.  The  lecture 
rooms  are  also  equipped  with 
monitors  through  which 
computer  graphics  and  the 
contents  of  the  lecturer's  screen 
can  be  shown.  Exhibit  A lists 
the  complete  training  process 
and  Exhibit  B details  the  course 
content.  The  course  is  designed 


3 

for  a maximum  of  16  students 
and  provides  a mixture  of 
theory  and  lectures  and  hands- 
on  practical  sessions.  Students 
are  both  continually  assessed 
and  given  a series  of  tests.  They 
are  also  set  assignments  in  the 
evenings.  At  the  end  of  the 
course,  if  successful,  they  are 
given  a certificate  and  are  fully 
equipped  to  take  a job  as  a 
service  engineer.  The  directors 
believe  it  is  realistic  for 
successful  trainees  to  reach  a 
position  such  as  a senior  mini 
systems  engineer  within  two  to 
three  years. 


Exhibit  A 


Computer  Engineering  Training  Scheme 


Stage  1 Applicants  are  assessed  for  aptitude  and  motivation 

Stage  2 Successful  candidates  are  offered  a place 

Stage  3 Students  follow  an  intensive,  practically  based  7-week  course 

Stage  4 Course  graduates  receive  a certificate  in  computer  technology  and 

maintenance 

Stage  5 Cerco  provides  a free  career  advisory  and  placement  service 


April  1990 


e>  1990  by  INPUT.  Reproduction  prohibited. 


Continued  on  next  page 

INPUT 


Service  Update 


4 


Cerco.  . .from  page  3 


Exhibit  B 


Computer  Engineering  Training  Scheme 


Seven-week  course  content 

• Basic  electronics 

• Fault  finding 

• PC  maintenance 

• VDU  maintenance 

• Computer  architecture 

• Introduction  to  networks 


— 

• Introduction  to 
communications 

• Quality  and  stock 
handling 

• Customer  care 

• Health  and  safety 

• Printer  maintenance 

• Disk  drive  maintenance 


Financial  Benefits 

The  financing  arrangements  are 
interesting.  Cerco  aims  to 
obtain  sponsorships  for  as  many 
of  its  students  as  possible, 
which  guarantee  them 
employment  at  the  end  of  the 
course,  if  successful.  Students 
are  currently  sponsored  by 
organisations  such  as  TIS  and 


Sorbus.  The  directors  believe 
that  sponsorship  is  a very  cost- 
effective  method  of  recruiting. 
The  recruiting  company  does 
not  have  to  spend  money  on 
advertising  or  agencies,  or 
spend  valuable  time  on  the 
initial  sifting  of  candidates.  The 
fact  that  the  students  have  been 
accepted  on  the  course  indicates 


© 1990  by  INPUT.  Reproduction  prohibited. 


a potential  to  be  more  than 
capable  of  doing  the  job  and  to 
be  highly  motivated. 
Sponsorship  costs  are  around 
£85.00  per  day  for  the  seven- 
week  period.  During  the 
course,  the  company  does  not 
have  to  pay  a salary.  National 
Insurance,  pension  or  pay  for  a 
company  car  or  for 
accommodation  in  hotels,  all  of 


April  1990 


INPUT 


Service  Update 


5 


which  are  typical  costs  borne  by 
companies  training  their  own 
staff.  The  sponsorship 
arrangements  vary  between 
companies — some  operate 
repayment  clauses  if  the 
employee  leaves  the  company 
within  a specified  time. 

Students  who  do  not  receive 
sponsorship  sometimes  finance 
their  own  training  or  obtain 
loans. 

Cerco  aims  to  attract  students 
from  as  wide  an  area  as  possible 
and  hopes  to  increase  the 
number  of  sponsored  students. 
Its  first  course  began  in 
February  and  a second  began  in 
March.  Each  course  has  7 
students,  ranging  in  age  from 
18-42,  from  previous  jobs  as 
diverse  as  a diving  instructor,  a 
market  stall  owner  and  a coal 
miner.  One  disappointment  at 
Cerco  Training  is  the  lack  of 
applications  from  women. 

There  are  no  women  on  either  of 
the  courses  running  at  the 
moment  (April  1990),  and  it  has 
only  had  applications  from  two 
(out  of  around  1,000  in  total). 

Views  from  Students 
and  Sponsors 

The  students  are  all  enthusiastic 
about  the  opportunity  that  the 
course  is  opening  up  for  them. 
They  all  feel  confident  that  they 
have  sufficient  knowledge  to  be 
employed  as  service  engineers. 
All  agree  that  the  course  is  very 
hard  work,  but  well  worth  the 


April  1990 


effort.  One  student  said  that  the 
fact  that  he  had  taken  an 
aptitude  test  gave  him  a 
tremendous  amount  of 
confidence  and  meant  that  he 
went  on  the  course  with  a very 
positive  attitude.  One  student 
praised  the  quality  of  the  course 
content,  saying  that  it  was 
obvious  that  the  company  had 
years  of  industry  experience. 

David  Bradshaw  is  Managing 
Director  of  TIS  Computer 
Maintenance  Ltd  and  is 
sponsoring  seven  students.  He 
thinks  that  Cerco's  training 
concept  is  completely 
appropriate  for  the  industry. 

He  says  that  currently,  there  is 
no  good  route  for  people  to 
enter  the  maintenance  business 
and  no  formal  qualification 
exists  for  maintenance 
engineers;  Cerco  is  taking  steps 
in  the  right  direction  to  correct 
this.  He  agrees  with  the  benefits 
of  putting  money  into 
sponsorship  rather  than 
recruitment.  Bradshaw  thought 
that  the  screening  procedure 
was  carried  out  well,  and  his 
Operations  Manager  was 
impressed  with  all  the 
candidates  he  interviewed.  This 
was  very  important  to 
Bradshaw,  as  he  has  spent  a lot 
of  time  in  the  past  interviewing. 
He  acknowledges  that  there  is 
an  element  of  chance.  The  first 
recruits  are  only  now  finishing 
the  course,  so  there  is  no 
established  track  record. 

(Cerco,  however,  undertakes  to 
replace  any  unsatisfactory 
employees  joining  an 


e 1990  by  INPUT.  Reproduction  prohibited. 


organisation  from  the  course). 
However,  the  feedback  from  the 
course  has  been  very  positive. 

An  important  advantage  for  TIS 
is  the  fact  that  the  trainees  will 
be  entry-level  people  with 
realistic  salary  expectations, 
giving  TIS  scope  to  work  with 
them  and  promote  them 
through  the  organisation.  In 
addition,  they  will  not  have 
developed  any  bad  habits  from 
previous  companies.  David 
Bradshaw  is  confident  that  this 
is  the  correct  way  forward. 

Sally  Mayo,  Personnel  Manager 
from  Sorbus,  echoes  Bradshaw's 
comments.  Sorbus  is 
sponsoring  some  students, 
which  involves  paying  for  the 
students'  course  fees  and 
guaranteeing  them  a job  at  the 
end  of  the  course,  and  is 
recruiting  other  students 
directly  from  the  course.  Mayo 
has  been  very  impressed  with 
Cerco's  approach.  She,  too, 
appreciates  the  fact  that  Sorbus' 
time  is  not  wasted  in 
interviewing  unsuitable 
candidates.  All  the  candidates 
interviewed  were  of  a very  high 
calibre  and  she  has  confidence 
in  the  thoroughness  of  the 
screening  procedure.  A 
graduate  from  the  first  course 
joined  Sorbus  recently  and  has 
adapted  very  quickly  to  the 
working  environment.  Mayo 
believes  that  the  courses  address 
an  area  where  there  is  a 
considerable  skills  shortage. 

She  has  been  very  impressed 
with  Cerco's  directors,  saying 
that  the  fact  that  they  come  from 


Continued  on  next  page 

INPUT 


Service  Update 


6 


Cerco 


...from  pages 


within  the  industry  means  that 
they  have  a very  good 
understanding  of  the  industry's 
needs  and  concerns.  She  is  also 
appreciative  of  the  fact  that 
Cerco  has  had  the  vision  to  take 
into  account  changing  skill 
needs:  there  is  a great  emphasis 
on  customer  relations  in  the 
course  content.  Customer 
contact  will  increase  in  the 
future  and  technical  skills  are 
assuming  slightly  less 
importance  as  equipment 
becomes  more  reliable. 


Future  Directions 

Cerco's  directors  do  not  believe 
that  they  have  any  direct 
competitors.  There  are,  of 


course,  many  training 
companies,  but  none  are 
considered  to  produce  such 
high-calibre  maintenance 
engineers.  Cerco  plans  to 
expand  its  operations.  By  the 
end  of  the  third  year,  they 
expect  revenue  in  excess  of  $1.5 
million.  As  they  have  not 
finished  their  first  trading  year, 
there  are  no  revenue  figures 
available  yet,  but  the  company 
is  currently  operating  ahead  of 
budget.  In  theory,  Cerco  will 
accept  students  from  anywhere, 
although  in  practice — because 
all  students  must  attend  the 
aptitude  tests — their  catchment 
area  is  mainly  in  the  U.K.  In  the 
future,  Cerco  will  consider 
taking  on  qualified  agents  to 
administer  the  tests  elsewhere 
in  Europe,  or  wherever  there  is 
demand. 


Exhibit  C 

Cerco  Training  Ltd — Activities 

• Computer  engineering  scheme 

• Product  training 

• Management  training 

• Customer-specific  training 


The  directors  see  that  training 
will  do  much  to  fill  the  skills 
shortage  and  they  aim  for 
industry  recognition  as  a 
supplier  of  high-calibre, 
motivated  engineers.  They 
foresee  a much  greater  demand 
for  UNIX  training  in  the  future 
and  hope  to  reach  more  people 
in  this  fast-growing  area. 

In  addition  to  its  service 
engineer  training  scheme,  Cerco 
Training  also  offers  commercial 
training,  aimed  at  people 
already  in  maintenance 
organisations.  At  present,  this 
represents  only  about  20%  of  its 
revenues.  The  commercial 
training  covers  all  the  aspects  of 
the  service  engineer  training 
scheme  as  well  as  more  product- 
specific  training  and 
management  training. 

The  product  or  functional 
courses  typically  last  for  a week 
or  less,  and  are  either  based  on  a 
specific  manufacturers' 
products,  or  can  be  elements  of 
the  seven-week  course.  The 
directors  view  management 
training  as  an  important 
element  of  their  services  and  are 
convinced  of  the  need  for  good 
management  skills  in  the 
computer  services  industry. 
Cerco  will  also  undertake 
customer-specific  training, 
where  a package  is  customised 
to  fit  the  client's  requirements.  ■ 


INPUT 


O 1990  by  INPUT.  Reproduction  prohibited. 


April  1990 


7 


News  from  the  USA 


Decision 
Data 

Service  Inc. 


Decision  Data,  Inc.  is  a 
result  of  the  late-1988 
merger  of  Decision  Industries 
and  Momentum  Technologies. 
The  new  Decision  Data 
organization,  strengthened  by 
the  operational  and  financial 
synergy  of  the  merger,  has 
become  a more  aggressive 
player  in  the  third-party  arena 
in  the  past  year,  and  will  most 
likely  continue  in  its  acquisition 
strategy  in  the  1990s.  Decision 
Data  Service,  with  1988  TPM 
revenues  of  $125.0  million,  has 
assembled  a field  service  force 
to  rival  top  third-party 
competitors.  Continued  growth 
will  place  it  among  TPM  leaders 
in  1990. 

Early  in  1989,  Decision  Data 
Service  strengthened  its  third- 
party  operations  with  the 
acquisition  of  FDR  Field  Service 
from  American  Express  Travel 


Related  Services  Company. 

FDR  had  been  a long-standing 
TPM  player  since  its  entry  into 
the  TPM  arena  in  1984  with  the 
acquisition  of  its  Indeserv  unit, 
and  later  with  the  NJ-based 
Kalbro  third-party  company. 
FDR's  service  organization  had 
grown  into  an  estimated  $25 
million  business  over  its  five 
years  in  the  third-party  market. 
The  acquisition  will  also  bring 
Decision  Data  Service 
considerable  business  in  the 
point-of-sale  (POS)  terminal 
maintenance  arena. 

Decision  Data 
Service — The  Company 

Decision  Data  Service  has  1^00 
service  employees  at  125  offices 
across  the  U.S.  The  firm's  field 
engineering  staff  has  grown  to 


April  1990 


Cl 990 by  INPUT.  Reproduction  prohibned. 


700,  and  third-party  activities 
contributed  $125  million  in 
revenues  in  1988. 

Decision  Data's  business  has 
traditionally  included  a number 
of  industries,  as  well  as  the 
federal  and  state/local 
government  markets.  Heavy 
presence  in  the  midrange  IBM 
arena  has  allowed  the  company 
to  foster  relationships  across 
industry  lines.  The  acquisition 
of  FDR's  service  business  will 
extend  this  presence  in  the  DEC 
marketplace.  The  importance  of 
the  distribution  sector  in 
Decision  Data's  business  plan 
will  be  increased  with  the  POS 
business  acquired  through  the 
FDR  merger. 

Decision  Data  Service  targets 
the  IBM  System/36,  /38,  and 
AS/400  service  markets,  and 


Coniinued  on  next  page 

INPUT 


Service  Update 


8 


IDccisiOtl . . .from  -page  7 

complements  its  support 
offerings  with  the  sale  of 
peripherals  (terminals  and 
printers),  add-on  memory,  and 
power  supplies  through  its 
sister  corporation.  Decision  Data 
Computer 

Corporation.  Other  brands 
supported  are  listed  in  Exhibit 
D,  with  the  products  maintained 
listed  in  Exhibit  E. 


Decision  Data  Services  provides 
a wide  range  of  services, 
including  hardware 
maintenance,  training, 
consulting,  installation/ 
relocation,  conversion /upgrade, 
refurbishment,  and  fourth-party 
maintenance. 


Exhibit  D 


Brands  Supported 

• IBM 

• Wang 

• Texas  Instalments 

• Qantel 

• Mohawk  Data  Sciences 
(MDS) 

• Decision  Data  Computer 
Corp.  (DDCC) 


Future  Plans 

Decision  Data  Service  has 
remained  focused  on  the 
midrange  marketplace,  and  its 
calculated  acquisition  strategy 
has  successfully  provided 
penetration  into  this  target 
market.  With  competitors  such 
as  IBM,  Wang  and  DEC, 
Decision  Data  Service  has 
concentrated  on  fortifying  its 
field  force  and  expanding 
geographic  coverage  over  the 
past  few  years  in  order  to  hold 
its  ground  in  the  highly 
competitive  minicomputer 
arena. 


Exhibit  E 

Products  Maintained 

• Minicomputers 

• Superminis 

• Microcomputers 

• Peripherals 

• Telecommunication  modems 
and  multiplexors 


The  company's  presence  in  the 
DEC  marketplace  has  been 


INPUT 


e>  1990  by  INPUT.  Raproduclion  prohibited. 


April  1990 


Service  Update 


9 


strengthened  by  the  recent 
acquisition  of  FDR  and  its 
customer  base.  Decision  Data 
has  also  been  able  to  capitalize 
on  Wang's  deteriorating 
financial  condition,  winning 
considerable  business  in  the 
Wang  VS  systems  marketplace 
in  1989. 

Despite  a number  of  new 
extended-service 
announcements  made  by  IBM 
in  1989,  Decision  Data  Service 
has  not  felt  the  competitive 
pressure  as  severely  as  in 
previous  years  in  the  IBM 
arena.  The  company's 
management  has  an  optimistic 
outlook  on  the  IBM 
marketplace,  feeling  that  the 
market  may  have  seen  the  end 
of  heavy  price  competition 
induced  by  IBM  discounting. 
The  next  wave  of  competition 
is  expected  to  come  from  the 
trend  toward  unbundling  of 
services,  and  the  importance 
such  flexibility  has  for  users. 


Certain  third-party  firms  who 
have  catered  to  this  flexibility 
have  consistently  given  the 
competition  a run  for  the 
money.  Other  TPMs,  including 
a number  of  major  players  in 
Decision  Data's  marketplace, 
have  been  slower  to  react  to  this 
trend  in  market  demand,  and 
have  suffered  at  the  bottom  line 
for  it.  Decision  Data  is 
attempting  to  take  heed  of  this, 
and  to  leverage  its  newly 
strengthened  service  resources 
to  meet  user  requirements. 

Decision  Data  Services  foresees 
the  network  support  trend  as 
one  of  the  new  market  and 
strategy  challenges  for  the 
1990s.  Decision  Data  recognizes 
the  requirement  (and 
opportunity)  to  support  these 
networks  facing  the  TPM 
market  as  networks  become  the 
important  issue  of  the  90s. 
Decision  Data  Services  is 
planning  to  enter  the  network 


support  arena  in  the  coming 
year,  expanding  service 
offerings  to  include  a full  range 
of  hardware  and  software 
support  involved  in  PC/ 
network  services. 

Overall,  Decision  Data  Services 
has  perceived  a new 
atmosphere  evolving  in  the 
third-party  marketplace,  as 
market  consolidation  becomes 
more  intense.  More  specific 
than  individual  acquisitions 
made  over  the  past  year,  the 
company  sees  the  third-party 
market  changing,  and  the  TPM 
arena  beginning  to  rival  the 
overall  information  systems 
marketplace  in  terms  of 
instability.  Decision  Data 
Services  has  been  a significant 
participant  in  this  change  of 
face,  and  will  undoubtedly 
continue  in  its 
acquisition  strategy  in  the 
1990s.  ■ 


PC/Workstation  Service  and  Support 
Requirements  Examined 


INPUT'S  new  report. 

Personal  Computer/ 
Workstation  User  Requirements, 
examines  users'  requirements 
for  service  and  support.  This 
report,  available  during  the  first 
quarter,  analyses  current  service 
and  support  requirements, 
users'  experience  with  and 
contacts  by  third-party 
maintenance  providers,  and 
service  opportunities. 


User  groups  representing 
Altos,  Apollo,  Apple, 
Compaq,  IBM,  Sun,  and 
Tandy  PC/ workstations  are 
examined  first  as  a whole  and 
then  individually  to  facilitate 
comparisons.  Areas  covered 
include;  factors  important  in 
choosing  a service  vendor; 
service  contract  coverage;  and 
user  requirements  for  and 
satisfaction  with  system 


availability,  response  time, 
repair  time,  hardware 
maintenance,  software  support, 
and  ancillary  services.  Each 
analysis  concludes  with  a 
summary  of  strengths  and 
weaknesses  as  reported  by  the 
users. 

This  report  can  be  ordered  from 
any  INPUT  office.  ■ 


€>  1990  by  INPUT.  Reproduction  prohibited. 


April  1990 


INPUT 


Service  Update 


10 

Questions  from  the  USA 


The  following  are  questions  that  some  of  our 
U.S.  clients  have  asked  us: 


Question: 

Is  there  a "Bluebook"  available  for  used 
computer  equipment  similar  to  that  for  used 
automobiles? 


Answer: 

The  only  "Bluebook"  that  INPUT  found  in 
production  is  published  by  Computer 
Merchants  in  New  York  City  for  used  IBM 
equipment.  The  price  guide  is  published 
quarterly  and  a subscription  is  available  for 
$48.00  per  year. 

Question: 

What  services  are  available  for  the  Unisys  On- 
Line  Transaction  Processing  (OLTP)  equipment 
that  have  many  of  the  features  of  the  fault- 
tolerant  machines  and  are  not  covered  by  the 
Surety  program? 

Answer: 

The  Unisys  OLTP  machines  are  yet  to  be 
released  and  therefore  are  not  covered  by 
Surety.  Unisys  anticipates  releasing  these 
machines  by  the  end  of  the  year. 


Question: 

Has  any  maintenance  pricing  been  released  on 
the  new  Hewlett-Packard  Laserjet  III  for  beyond 
the  warranty? 


Answer: 

Maintenance  on  the  new  Laserjet  III  will  be  the 
typical  support  offering  under  the  Success  Line 
Program  printer/peripheral  support.  ■ 


Hitachi  Data 
Systems  Profile 

Correction:  There  was  an  error  in  Hitachi's 
revenue  figures  on  the  graph  on  page  two  of  last 
month's  Service  Update.  The  revenue  figures 
are  in  billions  of  dollars,  not  millions.  INPUT 
apologises  to  Hitachi  Data  Systems  for  this  error 
and  for  any  misunderstanding  this  has  caused.  ■ 


INPUT 


© 1990  by  INPUT.  Reproduction  prohibited. 


April  1990 


Service  Update 


11 

Snippets 


<♦  Comparex  Informationssysteme  GmbH  saw  its 
net  profits  decline  by  33%  in  1989,  giving  a net 
margin  of  3%.  Comparex,  based  in  Mannheim, 
Germany,  is  owned  by  BASF  and  Siemens.  Last 
year  it  was  involved  in  an  unsuccessful  bid  to 
merge  its  business  with  NAS'  (now  HDS) 
European  operations.  Around  16%  of 
Comparex'  1989  revenues  of  $1,806  million 
were  derived  from  maintenance  and  service. 

<♦  TRW,  owner  of  one  of  the  longest  established 
independent  maintenance  businesses  in  the 
U.S.,  has  decided  that  it  wants  to  sell  off  the 
business.  Potential  bidders  include  Bell 
Atlantic  and  NCR  Corp. 

*1*  Datasolve  U.K.  has  won  a $12  million  systems 
operations  contract  with  the  Cambridge  County 
Council. 

*1*  A new  cabling  company  has  been  launched: 
Case  Cabling,  a subsidiary  of  Case 
Communications  Ltd.  It  will  specialise  in  an 
unshielded  twisted-pair  system,  CTSE 
(Communications  Transport  System,  Europe,  a 
European  version  of  AT&T's  premises 
distribution  system).  Case  Cabling  anticipates 
that  most  of  its  clients  will  be  companies  that 
are  moving  premises  or  undergoing  major 
refurbishment,  and  some  property  developers. 
Installation  in  the  U.K.  will  be  carried  out  by 
Case  Cabling  and  distributors  that  have 
obtained  a franchise.  On  the  Continent,  it  will 
be  installed  by  the  franchise  holders. 

MBS  pic  has  acquired  VlSIsytems  Ltd.  of 
Sutton,  Surrey,  a professional  services  company 
specialising  in  installing  computer  systems  for 
franchised  motor  dealerships  and  petrol 
forecourts.  MBS  pic  is  now  an  independent 


maintenance  company,  following  the 
management  buyout  of  its  sales  and 
distribution  organisation. 

❖ Sherwood  Computer  Management,  based  in 
Gloucester,  U.K.,  is  expanding  its  disaster 
recovery  services.  It  supports  Digital,  IBM, 
and  UNIX  on  Pyramid  and  Sequent,  and 
offers  cold  and  hot  restart.  It  has  recently  set 
up  a new  standby  centre  in  Leeds. 

Sherwood  also  offers  a range  of  consultancy 
services  aimed  at  reducing  the  risk  of 
disasters. 

❖ Kode  International  pic,  based  in  Swindon, 
U.K.,  is  concentrating  its  efforts  on  computer 
maintenance,  having  just  sold  the  computer 
and  peripherals  distribution  arm  to  Comart. 
The  new  company  will  trade  as  Comart 
Systems  Ltd.  Kode  will  continue  its  business 
in  printed  circuit  boards  under  Kam 
Circuits. 

❖ British  Olivetti's  customer  support  group 
has  won  a third-party  service  contract  for  the 
installation  and  maintenance  of  point-of-sale 
terminals  for  the  Midland  Bank. 

❖ Bell  Atlantic  Enterprise's  Electronic  Service 
Specialists  Ltd.  announced  that  it  was 
adding  selected  Sun,  AT&T  and  Fujitsu 
equipment  to  diversify  repair  offerings  from 
the  traditional  DEC  offering.  Depot  repair 
services  will  be  provided  for  the  Sun  350  and 
360  desktop  workstations,  the  AT&T  3b20 
Model  II,  and  the  Fujitsu  Eagle  M2351A  and 
Super  Eagle  M2361 A hard  disk  drives.  This 
decision  supports  the  effort  to  better  serve 
ESS  customers  who  have  equipment 
installed  from  a variety  of  manufacturers. 


April  1990 


© 1990  by  INPUT.  ReproduOlon  ptohlblled. 


INPUT 


About  INPUT 


ESTPUT  provides  planning  information,  analysis,  and  recommendations  to 
managers  and  executives  in  the  information  processing  industries. 
Through  market  research,  technology  forecasting,  and  competitive 
analysis,  INPUT  supports  client  management  in  making  informed 
decisions. 

Continuous-information  advisory  services,  proprietary  research/ 
consulting,  merger/ acquisition  assistance,  and  multi  client  studies  are 
provided  to  users  and  vendors  of  information  systems  and  services 
(software,  processing  services,  turnkey  systems,  systems  integration, 
professional  services,  communications,  and  systems /software 
maintenance  and  support). 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior 
management  positions  in  operations,  marketing,  or  planning.  This 
expertise  enables  INPUT  to  supply  practical  solutions  to  complex  business 
problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a 
leading  international  research  and  consulting  firm.  Clients  include  more 
than  100  of  the  world's  largest  and  most  technically  advanced  companies. 


INPUT  OFFICES 


North  America 

Headquarters 
1280  Villa  Street 
Mountain  View,  CA  94041-1194 
(415)  961-3300 

Telex  171407  Fax  (415)  961-3966 
New  York 

959  Route  46  East,  Suite  201 
Parsippany,  NJ  07054 
(201)  299-6999 

Telex  134630  Fax  (201)  263-8341 

Washington,  D.C. 

1953  Gallows  Road,  Suite  560 

Vienna,  VA  22182 

(703)  847-6870  Fax  (703)  847-6872 


International 

Europe 

Piccadilly  House 
33/37  Regent  Street 
London  SWIY  4NF,  England 
(01)  493-9335 

Telex  27113  Fax  (01)  629-0179 
Paris 

52,  boulevard  de  Sebastopol 
75003  Paris,  France 

(33-1)  42  77  42  77  Fax  (33-1)  42  77  85  82 
Tokyo 

Saida  Building 
4-6,  Kanda  Sakuma-cho 
Chiyoda-ku,  Tokyo  101,  Japan 
(03)864-0531  Fax  (03)  864-4114 


Route; 


INPUT 

Service 

Update 


© INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — International 

May  1990 


IN 

THIS 

ISSUE: 


1 ....Bell  Atlantic  Business  Systems  Services® 
5....  Unisys  Announces  New  Services 
7 ....Snippets 


Bell  Atlantic  Business  Systems  Services®, 
the  Supplier  of  Sorbus®  Services 


“We’re  More  Than 
Just  Talk” 

Bell  Atlantic  Corporation,  com- 
munications giant  and  parent  of 
Sorbus®  since  1985,  lives  up  to 
this  motto  through  its  diverse 
set  of  business  units.  The  ex- 
pansion of  its  unregulated  com- 
panies has  been  a high  priority 
of  Bell  Atlantic  in  the  1980s,  and 
under  the  Communications  and 
Related  Services  segment  of  its 
operations.  Bell  Atlantic 
Customer  Services  has  taken  a 
priority  role  in  this  growth.  The 
operations  under  Customer 
Services  include  a number  of 
independently  operating  com- 
panies, such  as  Camex-CPX, 
Inc.,  Electronic  Service 
Specialists,  and,  by  far  the 


largest  service  unit  among  them. 
Bell  Atlantic  Business  Systems 
Services®  (formerly  Sorbus®  Inc). 

Bell  Atlantic  Business 
Systems  Services® — 
The  Company 

The  purchase  of  Sorbus®  by  Bell 
Atlantic  five  years  ago  started  a 
chain  of  significant  events  in 
Sorbus'*  development.  Since 
the  acquisition,  Sorbus®  has 
moved  to  the  forefront  of  the 
TPM  market-place,  surpassing 
the  long-time  third-party  leader 
TRW  soon  after  its  acquisition 
by  Bell  Atlantic.  Sorbus®  has 
been  a significant  driver  of  the 
market  consolidation  that  has 
changed  the  face  of  third-party 
competition  over  the  past 


decade.  Bell  Atlantic's  recent 
purchase  of  Control  Data 
Corporation's  Third-Party 
Maintenance  Division  for  its 
Sorbus  subsidiary  has  been  its 
most  significant  acquisition  yet. 

In  January  1990,  Bell  Atlantic 
announc^  the  completion  of 
the  purchase  of  the  third-party 
operations  of  Control  Data 
Corporation.  CDC's  Third- 
Party  Maintenance  Division, 
having  estimated  revenues  of 
over  $100  million  in  1989,  was 
melded  into  Sorbus®  operation 
during  the  first  quarter  of  1990. 
INPUT  estimates  that  the  reve- 
nue of  the  former  Sorbus® 
portion  of  the  new  Business 
Systems  Services  operation  was 
about  $180  million  in  1989.  I’he 
merger  of  the  two  former 

Continued  on  next  pu^e 


Service  Update 


2 


Bell.  . .from  page  1 


Service  at  a Glance 


competitors  has  created  the 
largest  TPM  organisation  in  the 
marketplace  to  date. 

In  April  1990,  Bell  Atlantic 
announced  the  name  change 
from  Sorbus®,  Inc.  to  Bell 
Atlantic  Business  Systems 
Services®.  This  name  change 
reflects  the  expanded  coverage 
that  has  evolved  through 


Fxhibit  A 

Pell  Atlantic  Business  Systems  Serviced 


Major  Brands  Supported  Include 


IBM 

Diablo 

Northstar 

Texas  Instruments 

AT&T 

Epson 

Okidata 

Toshiba 

CDC 

Hayes 

Princeton 

Visual 

Citizen 

Hazeltine 

Quadram 

Wang 

C.  Itoh 

Iomega 

Rodime 

DG 

Compaq 

Kaypro 

Seagate 

Data  Products 

DataSouth 

Mountain 

Tallgrass 

Zenith 

DEC 

NEX 

Televideo 

Novell 

Emulex 

expansion  of  services  and  the 
acquisition  of  other  service 
providers.  Business  Systems 
Services'  mission  is  to  become 
the  most  comprehensive  re- 
source for  business  systems 
service.  With  more  than  30 
years  of  experience  in  the  com- 
puter industry,  the  company 
maintains  more  IBM  and  DEC 
systems  than  any  other  third- 
party  maintainer  and  services 
over  500  other  brands  of 
computer  hardware. 


Service  Demographics 
and  Delivery 

Business  Systems  Services  pro- 
vides service  from  more  than 
200  key  locations  in  the  U.S., 
with  additional  offices  in 
Canada  and  Western  Europe. 
The  company's  3,200  employees 
include  nearly  1,700  field 
engineers  and  technical  support 
personnel. 

There  are  over  60,000  client  sites 
in  the  U.S.  and  Canada,  repre- 
senting more  than  600,000  units. 
Through  offices  in  Western 
Europe,  the  company  supports 
an  additional  20,000  customer 
sites. 

Comprehensive  hardware 
service  capabilities  include  IBM 
mainframe  and  minicomputer 
service,  DEC  system  service,  a 
variety  of  microcomputer 
service  options  on  a growing 
number  of  products,  and  remote 
diagnostics  on  IBM  and  DEC 
systems.  Business  Systems 
Services  can  retrieve  system 
data  remotely  and  receive 
automatic  notification  of  system 
problems  on  IBM  308X,  IBM 
4300  and  selected  DEC  systems. 
The  company  has  also  devel- 
oped unique  capability  based  on 
the  IBM  "call  home"  feature  of 
the  IBM  3090. 

Business  Systems  Services  has 
developed  several  unique 
service  programmes  based  on 
growing  customer  demands. 
These  programmes  include 
Direct  Access  Customer  Service 
(DACS),  midrange  support 
programmes  (3Xtra  Support^*^ 
and  DEXtra^^),  and  disaster 
recovery  services,  available 
through  SunGard®  Recovery 
Services,  Inc.  The  DACS 


C 1990  by  INPUT.  Reproduction  prohibited. 


May  1990 


INPUT 


Service  Update 


programme  provides  customers 
with  access  to  Business  Systems 
Services'  central  dispatch  sys- 
ten^  from  the  customer's 
in-house  help  desk  via  a private 
telecommunications  data  link, 
allowing  customers  to  open 
their  own  service  calls  and 
monitor  their  progress.  High- 
lighting the  3Xtra®'^  and 
DEXtra^'^  support  programs  is 
toll-free  telephone  assistance 
which  offers  software  support, 
configuration  assistance,  per- 
formance consulting,  and 
internal  networking  recommen- 
dations. Other  services  include 
site  planning,  installation 
services,  relocation  assistance, 
and  access  to  seven  cold-site 
facilities  around  the  country. 

Related  operations  in  Europe, 
headquartered  in  Brussels, 
provide  computer  maintenance 
and  services  in  Austria,  France, 
Italy,  West  Germany, 
Switzerland,  and  the  United 
Kingdom.  Services  are  pro- 
vided by  nearly  650  employees 
in  over  40  branch  offices 
throughout  Europe.  European 
service  capabilities,  which  vary 
by  country,  include  computer 
and  communications  equipment 
from  over  500  manufacturers, 
including  Amstrad,  3Com,  Data 
General,  Dell,  DEC,  and  IBM. 

Strategic  Focus 

As  one  of  the  Bell  Atlantic 
family  of  companies.  Bell 
Atlantic  Business  Systems 
Services®  has  been  able  to 
weather  the  poor  TPM  market 
conditions  of  the  late  1980s.  The 
healthy  acquisition  strategy  of 
Bell  Atlantic  has  increased 
Business  Systems  Services' 
expansion  into  new  markets  and 
penetration  into  current 
markets. 


3 

The  addition  of  CDC's  TPM 
resources  to  Bell  Atlantic 
Business  Systems  Services®  has 
created  a formidable  competitor 
in  the  third-party  maintenance 
market-place.  The  resulting 
organization  rivals  the  resources 
of  some  of  the  leading  equip- 
ment vendors.  Bell  Atlantic 
Business  Systems  Services'® 
focus  on  the  development  of 


Exhibit  B 

Bell  Atlantic  Business  Systems  Serviced 

Products  Maintained 

• Mainframes 

• Minicomputers 

• Superminis 

• Microcomputers 

• Peripherals 

• Workstations 

• Telecommunications 
- Modems 


extended  services  and  compre- 
hensive training  programs  for 
service  employees  places  it  in 
close  competition  with  some  of 
the  most  comprehensive  offer- 
ings in  the  OEM  as  well  as  the 
TPM  arenas.  All  of  these  efforts 
support  the  current  mission  of 
the  company — to  become  the 
single  most  comprehensive 
resource  for  business  systems 
service.  ■ 


Continued  on  next  pa^c 


May  1990 


C 1990  by  INPUT.  Reproditdlon  ptohlblted. 


INPUT 


Service  Update 


4 


Bell.  . .from  page  3 


Exhibit  C 

Bell  Atlantic  Business  Systems  Serviced 

Service  Provided 


• Manufacturer  warranty  work 

• Maintenance 

• Preventive  maintenance 

• ECO/FCO  (change  orders) 

• Consulting 

• Installation/relocation 

• Fourth-party  maintenance 

* Refurbishment 

• Conversion/upgrade 

• Disaster  recovery 

• Software  support 

; Exhibit  D 

i Bell  Atlantic  Business  Systems  Sen/ice^ 


Industries  Targeted  Include 


• Manufacturing 

• Transportation 

• Utilities 

• Medical 

• Distribution 

• Banking/finance 

• Insurance 

• Education 

• Services 

• Federal  government 

• State/local  government 

• Other 

INPUT 


e 1990  by  INPUT.  ReprexJudion  prohibited. 


May  1990 


Service  Update 


5 


Unisys  Announces  New  Services  in  Europe 


Exhibit  E 

Unisys  USP  Service  Strategy 


Unisys  Service 
Programme — USP 

At  the  end  of  March  this  year, 
Unisys  announced  the  Unisys 
Service  Programme — USP — in 
Europe.  USP  is  a marketing 
strategy  whose  objective  is  to 
make  the  previously  announced 
"A  La  Carte"  service  offering 
available  to  users  who  purchase 
equipment  through  third-party 
channels  or  VARs,  as  well  as 
those  who  purchase  directly. 
Exhibit  E illustrates  the  user 
links  involved.  In  implement- 
ing this  strategy,  Unisys  is 
ensuring  that  all  users  of  its 
equipment  receive  the  highest 
quality  of  service  available,  and 
makes  available  the  option  for 
the  VAR  to  deal  with  the  user  or 
for  Unisys  to  provide  service 
directly. 

When  discussing  this  new 
service  strategy  with  INPUT, 
Unisys  said  that  "USP  is  a 
strategy  developed  by  customer 
services  to  support  indirect 
distribution  channels  in  such  a 
way  as  to  meet  the  demands  of 
a growing  market."  A further 
objective  of  the  USP  is  to  attract 
large  multinational  VARs  by 
providing  UNIX  equipment  and 
Unisys  product  lines. 

The  USP  has  four  modules 
which  define  the  relationship 
between  Unisys  and  the  VAR. 
Although  the  four  modules 
have  close  similarities  to  the 
normal  A La  Carte  range  of 
services,  the  differences  need  to 
be  clarified.  The  USP  defines 
four  levels  of  VAR  relation- 
ship— levels  2000,  3000,  6000 


and  7000 — whereas  A La  Carte 
defines  four  levels  of  service — 
levels  200,  300,  600  and  700. 


The  differences  between  these 
four  levels  of  relationship  with 
the  VAR  are  illustrated  in 
Exhibit  F. 


Exhibit  F 

USP-VAR  Involvement  Levels 

USP  Module 

Applicability 

Service/Product 

2000 

Servicing 

VARs 

VAR  cannot  use  A La  Carte  name 

3000 

VAR  becomes  a franchiser 

VAR  provides  own 
label  A La  Carte  service 

6000 

Nonservicing 

VARs 

Unisys  provides  full  A La  Carte 
services  to  end  user 

User  takes  first  call 

7000 

Unisys  provides  full  A La  Carte 
services  to  end  user 

Continued  on  next  page 


May  1990 


C 1990  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 


6 

Unisys.  . .from  page  5 

Four  Levels  of 
Relationship 

Details  of  the  composition  of 
each  of  the  four  levels  of  USP 
are  provided  in  Exhibit  G. 
These  levels  may  be 
summarised  as  follows: 

• USP  2000  is  designed  to 
supplement  the  VAR's  exist- 
ing service  capability  by 
providing  expert  hotline 
support  plus  a time  and  ma- 
terials backup  service.  The 
VAR  invoices  the  user. 

• USP  3000  is  designed  for 
VARs  who  prefer  to  provide 


service  to  the  user  through 
their  own  service  organisa- 
tion. At  this  level,  the  VAR, 
acting  as  a franchise,  is  per- 
mitt^  to  sell  and  deliver 
Unisys  A La  Carte  contracts 
under  its  own  name.  Unisys 
provides  additional  backup 
support  to  ensure  that  service 
meets  Unisys  standards.  The 
VAR  invoices  the  users. 

• USP  6000  is  designed  for 
VARs  who  want  to  improve 
and  develop  after-sales  serv- 
ice quickly,  without  heavy 
investment.  At  this  level, 
direct  access  to  Unisys 
on-line  support  systems  is 
provided.  However,  the 
VAR  is  required  to  provide 
the  first  point  of  contact  for 


users.  After  transfer  of  the 
first  call,  Unisys  provides  full 
service  for  all  products  except 
for  the  VAR's  value-added 
application  software.  All 
customer  and  equipment 
data  and  customer  invoicing 
is  handled  by  the  Unisys 
Service  II  call  management 
and  information  system. 

• USP  7000  is  designed  to  free 
the  VAR  from  the  investment 
needed  to  provide  a quality 
service.  At  this  level,  the 
VAR  is  able  to  offer  Unisys  A 
La  Carte  service  contracts 
providing  complete  system 
support  for  all  hardware  and 
software.  Unisys  becomes 
the  recommended  service 
supplier.  The  VAR  has 


Exhibit  G 

Services  USP  Allows  the  VAR  to  Provide 


USP  2000 

USP  3000 

USP  6000 

USP  7000 

• Own  service  product 
to  users 

• Own  label  A La  Carte 
service 

• Unisys  A La  Carte 
service  to  users 

• Full  Unisys  A La  Carte 
services  to  users 

• Own  centralised  help 
desk/telephone 
service 

• Own  centralised  help 
desk/telephone 
service 

• Own  centralised  help 
desk/telephone 
service 

• Unisys  centralised 
telephone  and  help 
desk  service 

• Own  warranty 
programme 

• Own  warranty 
programme 

• Unisys  warranty 

• Unisys  warranty 

• Own  system  software 
update/distribution 

• VAR  invoices  user 

• Comprehensive  range 
of  Unisys  services 
including: 

- On-site  diagnostics 

- On-line  support 

- Call  management 

- Software  updates 

- Service  parts  and 
logistics 

• Comprehensive  range 
of  Unisys  services 
including: 

- On-site  diagnostics 

- On-line  support 

- Full  call  management 

- Software  updates 

- Service  parts  and 
logistics 

• Unisys  invoices  user 

• Unisys  invoices  user 

INPUT 


0 1990  by  INPUT.  Reproduction  prohibited. 


May  1990 


Service  Update 


access  to  real-time,  on-line 
records  of  all  end-user 
service  information. 

At  all  levels  of  the  USP,  the  VAR 
has  the  opportunity  to  gain 
extra  revenue  through  the  sale 
of: 

• Unisys/own  label  computer 
supplies 

• Unisys  environmental 
services 

• Unisys  network  services 

• Unisys  installation  services 


Unisys  als  provides  training 
for  the  VAP  the  level  of  which 
is  dependenc  on  the  level  of  USP 
chosen.  Unisys  is  committed  to 
ensuring  that  the  VAR  achieves 
the  degree  of  competence  com- 
mensurate with  the  level  of  USP 
chosen. 

Likely  Developments  of 
the  USP  Strategy 

Following  the  initial  launch  of 
the  Unisys  Service  Programme, 
Unisys  visualizes  probable 
future  developments  of  the 
strategy  in  one  or  more  of  the 
following  areas: 


7 

• Productized  services 

• Continuation  and  enhance- 
ment of  added-value  services 
such  as  environmental  and 
network  services 

• Extended  software  support 
services 

• Direct  marketing  of  service, 
for  example  telesales  and 
aftercare 

• Enhanced  service  marketing 
techniques  ■ 


Snippets 


*1*  Focalpoint  Engineering,  the  hardware 
maintenance  contract  services  division  of 
Tetra,  has  been  acquired  by  Logitek. 

♦t*  Synapse  Computer  Services  pic  has  made  a 
pretax  loss  for  the  six  months  to  31  January 
1990,  despite  increasing  its  turnover  to  £4.7 
million.  The  chairman.  Bill  Williams,  has 
resigned  and  the  business  is  now  under 
tighter  control  from  the  board.  Mr.  Williams 
blamed  adverse  trading  conditions  in  the  U.S. 
The  board  believes  that  Synapse  will 
overcome  its  problems,  although  1990  is  likely 
to  be  a difficult  year. 

❖ A £2  million  contract  has  been  awarded  by  the 
Department  of  Trade  and  Industry  to  Trend 
Datalink  Ltd,  the  network  management 
business  of  Telemetrix  pic.  Trend,  with  two 
other  consortium  members  Dowty 
Information  Systems  and  Camtec,  is 
completing  the  installation  of  an  X.25  data 
communications  network  to  link  all  mainland 
U.K.  job  centres. 


❖ Ferrari  Holdings  pic  is  now  in  a position  to 
acquire  Pericom  pic.  Ferrari  is  primarily 
interested  in  Pericom's  maintenance  business 
(turnover  £7  million),  which,  when  combined 
with  Ferrari's,  should  give  revenues  of  £20 
million  this  year.  Ferrari  will  sell  the  rest  of  the 
business  back  to  Pericom's  chairman,  Ron 
Cragg,  and  it  will  trade  under  Pericom 
Technology  Ltd.  Under  a three-year 
agreement,  Pericom  Technology  will 
recommend  that  Ferrari  Holdings  maintain  all 
its  products  sold  in  the  U.K. 

❖ British  Olivetti  has  won  a £3.4  million  contract 
from  Boots  the  Chemist  in  the  U.K.,  and  has 
taken  over  from  IBM.  Olivetti  is  said  to  have 
won  the  contract  on  costs  and  manufacturer 
independence.  The  Customer  Service  Support 
Group  will  maintain  a range  of  PS/2  store 
controllers  and  IBM's  electronic  point-of-sale 
tills. 


May  1990 


O 1990  by  INPUT.  Repfodudlon  pfohibited. 


INPUT 


About  INPUT 


ESTPUT  provides  planning  information,  analysis,  and  recommendations  to 
managers  and  executives  in  the  information  processing  industries. 
Through  market  research,  technology  forecasting,  and  competitive 
analysis,  INPUT  supports  client  management  in  making  informed 
decisions. 

Continuous-information  advisory  services,  proprietary  research/ 
consulting,  merger/acquisition  assistance,  and  multiclient  studies  are 
provided  to  users  and  vendors  of  information  systems  and  services 
(software,  processing  services,  turnkey  systems,  systems  integration, 
professional  services,  communications,  and  systems /software 
maintenance  and  support). 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior 
management  positions  in  operations,  marketing,  or  planning.  This 
expertise  enables  INPUT  to  supply  practical  solutions  to  complex  business 
problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a 
leading  international  research  and  consulting  firm.  Clients  include  more 
than  100  of  the  world's  largest  and  most  technically  advanced  companies. 


INPUT  OFFICES 


North  America 

Headquarters 
1280  Villa  Street 
Mountain  View,  CA  94041-1194 
(415)  961-3300 

Telex  171407  Fax  (415)  961-3966 
New  York 

959  Route  46  East,  Suite  201 
Parsippany,  NJ  07054 
(201)  299-6999 

Telex  134630  Fax  (201)  263-8341 

Washington,  D.C. 

1953  Gallows  Road,  Suite  560 

Vienna,  VA  22182 

(703)  847-6870  Fax  (703)  847-6872 


International 

London 

Piccadilly  House 
33/37  Regent  Street 
London  SWl  Y 4NF,  England 
(071)493-9335  Fax  (071)  629-0179 

Paris 

52,  boulevard  de  Sebastopol 
75003  Paris,  France 

(33-1)  42  77  42  77  Fax  (33-1)  42  77  85  82 

Tokyo 

Saida  Building 
4-6,  Kanda  Sakuma-cho 
Chiyoda-ku,  Tokyo  101,  Japan 
(03)864-0531  Fax  (03)  864-4114 


Route: 


INPUT 

Service 

Update 


© INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — international 

June  1990 


IN 

THIS 

ISSUE: 


1 ....CONNECT — Network  Services  from  Unisys 

6 ....  Questions  from  the  U.S.A. 

7 ....Snippets 


Unisys  Launches  CONNECT 
New  Network  Services 


At  the  end  of  April  1990, 
Unisys  announced 
CONNECT  in  Western  Europe. 
Unisys  describes  CONNECT  as 
a new  and  comprehensive  range 
of  network  products  and 
services,  designed  to  cover 
every  type  of  specialist  network 
service  the  user  could  require. 
The  CONNECT  product  is 
based  on  Novell  Netware™,  a 
software  platform  which  will  be 
sold  by  Unisys  in  the  LAN 
market. 

Prior  to  the  launch,  network 
services  had  been  embedded  in 
the  Environmental  Services 
operation  of  Unisys'  Customer 
Services  division.  As  part  of 
Environmental  Services,  Unisys 
claims  that  its  network  service 
activities  had  been  successful  to 
the  point  of  contributing  about 
50%  of  the  total  revenues  of 


Environmental  Services.  As  a 
result  of  this  success,  Unisys 
decided  to  establish  network 
services  as  a separate  business 
unit  within  Customer  Services — 
hence  CONNECT. 


The  major  strategy  and  product 
of  CONNECT  is  the  provision  of 
open  systems  cabling  based  on 
the  concept  of  twist^  pairs. 

The  key  to  CONNECT  lies  in  an 
alignment  between 
Environmental  Services, 
intelligent  buildings,  cabling 
and  networks  within  Unisys. 


CONNECT  provides  bridging 
between  the  network  products 
of  all  major  manufacturers  and 
heralds  a move  by  Unisys  into 
the  provision  of  full  network 
services.  Exhibit  A provides  a 


model  of  the  CONNECT 
concept. 

Unisys  claims  that  CONNECT 
provides  single  solution  service 
to  satisfy  user  needs  ranging 
from  planning  to  installation, 
including  ongoing  support, 
monitoring  and  upgrading; 

CorUinued  on  next  page 


" CONNECT— Total  Solution 
Network  Service" 


2 


CONNECT...  from  page  1 


from  single  products  to  high- 
level  management  and 
integrated  turnkey  solutions. 

CONNECT  is  intended  to 
complement  the  specialist 
consultancy  skills  of  the  Unisys 
Professional  Services  Division 
and  Complex  Systems 
Organisation.  The  services 
available  are  illustrated  in 
Exhibit  B and  are  summarised 
in  the  following  descriptions: 

1.  Physical  Design 

This  service  is  intended  to  assist 
the  user  in  achieving  optimum 
design  of  the  network  by 
providing  consultants  to  work 
alongside  the  user.  The  concept 
is  to  assist  the  user  in  the  paper 


Exhibit  B 

Unisys  CONNECT — Six  Key  Services 


Physical  Design 


Service 


INPUT 


© 1990  by  INPUT.  Reproduction  prohibited. 


June  1990 


Service  Update 


3 


planning  stage  to  arrive  at  a 
preferred  solution  which  takes 
into  account  the  latest 
technology,  structure  and 
location  of  buildings, 
optimisation  of  links  between 
computers  and  future  user 
business  plans.  Exhibit  C lists 
the  services  and  technologies 
involved  in  the  physical  design 
phase. 

In  addition,  Unisys  works  with 
the  user  on  a consultancy  basis 
to  design  infomiation  systems 
that  support  the  user's  business 
needs  and  objectives.  The  aim  is 
to  provide  a complete  network 
blueprint  for  the  necessary 
cabling  and  building  work, 
which  can  then  be  carried  out 
by  the  Unisys  Network 
Installation  Service. 

2.  Network  Installation 

Unisys  provides  full  expertise 
on  site  for  complete  project 
management  and  quality 
control  at  every  stage  of 
installation.  Unisys  consultants 
analyse  the  correct  methods  of 
trunking,  taking  into  account 
the  structure  of  different  parts 
of  the  user's  building.  In  the 
case  of  a WAN  installation, 
Unisys  provides  expertise  at 
each  site,  to  effect  smooth  and 
coordinated  installation  across 
the  whole  network.  This 
includes  monitoring  for 
environmental  protection  and 
cosmetically  acceptable 
installation.  Exhibit  D lists  the 
services  and  technologies 
involved  at  the  installation 
phase. 


Exhibit  C 

Physical  Design  Stage 

• LANA/VAN/broadband 

• Data/voice  PABX/ISDN/FDDI 

• Consultancy 

-Advise  on  topology 

-Connection  methodology 

-Tariffs 

-Procurement  management 

Exhibit  D 

Installation  Phase 

• Unisys  open  cabling  system 

• LANA/VAN/broadband 

• ISDN/PABX/FDDI 

• Project  management 

June  1990 


e 1990  b/  INPUT.  Reproduction  probibHed. 


Continued  on  next  page 

INPUT 


4 


CONNECT.  . .from  page  3 

3.  Network 
Commissioning 

At  the  commissioning  phase, 
Unisys  will  accept  full 
responsibility  for  project 
management,  while  the  user 


Exhibit  E 

Commissioning  Phase 

• Project  management 

• Testing  units 

• Stage  proving  products 

• Certified  network  engineers 

• User  training 

retains  management  control. 
Unisys  consultants  will  monitor 
and  test  each  step  of  the 
commissioning,  and  all 
experienced  Unisys  network 
engineers  are  fully  trained  and 
certified  by  Novell™  to  work 
with  the  Netware™  product. 
Unisys  will  deal  with  the 
subcontractors  on  behalf  of  the 
user,  checking  and  guaranteeing 


the  work  they  do  stage  by  stage, 
testing  for  faults  and  overseeing 
each  aspect  of  the  total 
commissioning  phase.  This 
includes  the  handling  of  any 
problems  in  interfacing  with  the 
PTT.  The  services  and 
technologies  involved  in  the 
commissioning  phase  are  listed 
in  Exhibit  E. 


4.  A La  Carte  Network 
Service 


As  part  of  the  strategy  to 
provide  total  solution  networks, 
Unisys  offers  A La  Carte 
Network  Services,  which  it 
describes  as  a complete  solution 
for  network  maintenance  and 
support.  A La  Carte  is  designed 
so  that  one  simple  contract  can 
be  used  to  cover  the  whole 
system  by  providing  a complete 
menu  of  network  services.  From 
this  menu,  the  user  can  select 
the  exact  level  of  support 
required  to  suit  the  needs  of  the 
user's  business.  The  type  of 
service  available  under  A La 
Carte  ranges  from  telephone 
support  to  full  on-site  support, 
tailored  to  match  the  criticality 
of  the  user's  system. 

5.  Network  Change 

The  concept  of  the  Network 
Change  service  is  to  ensure 
sufficient  flexibility  of  the 
network,  so  as  to  keep  pace  with 
the  changing  needs  of  the  user's 
business  and  organisation. 
Unisys  personnel  will  oversee 
and  organise  any  changes  or 


INPUT 


e 1990  by  INPUT.  Reproduction  prohibKed. 


June  1990 


Service  Update 


expansion  required  by  the 
network.  This  service  ranges 
from  one  project  to  constant 
reviews,  and  from  specific 
redesign  to  full  forward 
planning.  Unisys  claims  that 
this  service  can  protect  the  user 
from  the  high  cost  of 
uncontrolled  proliferation  of 
cabling  and  equipment  by 
keeping  the  network  under 
review  to  ensure  optimum 
efficiency.  The  services  and 
technologies  involved  in  this 
service  are  listed  in  Exhibit  F. 

6.  Network  Enhanced 
Management 

The  objective  of  these  services, 
available  as  part  of  the  Unisys 
total  network  solution  concept, 
is  to  enable  optimisation  of  the 
network  and  maximisation  of 
the  user's  computer  resources. 

In  the  application  of  these 
services,  Unisys  claims  that  the 
user  can  improve  the  cost- 
effectiveness  of  the  network 
through:  usage  monitoring, 
identification  of  areas  of  system 
redundancy,  and  checking  the 
uncontrolled  proliferation  of 
duplicated  resources.  The 
elements  of  these  services  can  be 
summarised  as  follows: 

• Network  Audit:  regular 
analysis  and  review  to  check 
the  costs  of  redundancy  or 
proliferation. 

• Network  Optimisation: 
measuring  and  monitoring  to 
identify  and  improve 
underperformance  or 
sections  under  strain. 


5 


Exhibit  F 

Network  Change 

• Moving  people 

• Moving  locations 

• Additional  people 

• Additional  locations 

• Cable  management 

• Unisys  open  cabling  system 

• Network  integration 


• Network  Streamlining: 
cutting  costs  by  removing 
unnecessary  equipment  or 
inefficient  cabling. 

• Network  Integration: 
developing  links  with  other 
systems. 

• Network  Software 
Management:  keeping  the 
user's  software  up  to  date 
and  in  step  with  other 
software  in  the  user's 
organisation. 

• Network  Security:  protecting 
the  user's  network  from 
physical  damage  or 
unauthorised  use  through 
cabling  or  PTT  lines. 

• Network  Expansion:  major 
review  to  meet  new  capacity 
requirements.  ■ 


June  1990 


e 1990  by  INPUT.  Reproduction  prohibned. 


INPUT 


Service  Update 


6 


The  following  are  some  of 
the  questions  posed  to  the 
U.S.  hotline  over  the  last  month. 
The  questions  and  their  answers 
may  be  of  general  interest  to  all 
INPUT  Customer  Service 
clients. 


Question:  Does  DEC  offer 
disaster  recovery  services?  If  so, 
what  do  they  cover? 

Answer:  DEC  offers  three 
components  to  their  disaster 
recovery  services.  These 
components  are: 

Restart:  this  service  provides 
access  to  a "hot  site"  within 
hours  of  disaster  notification. 
The  site  is  fully  equipped  with 
equipment  to  resume  processing 
and  personnel  to  assist  up  to  24 
hours  per  day,  seven  days  per 
week.  Periodic  testing  of  the 
recovery  of  critical  applications 
is  also  available  with  technical 
staff  to  assist. 

Recover-All:  this  supplement  to 
the  DEC  Field  Service 
agreement  guarantees  the 
restoration  of  computer 


operations  after  damages 
caused  by  environmental  or 
accidental  occurrences.  This 
component  takes  over  where  the 
on-site  Field  Service  agreement 
leaves  off,  after  mechanical  and 
component  failures. 

Recovery  Planning  Services: 
this  set  of  services  offers  a 
comprehensive  planning 
methodology  designed  to  help 
companies  develop  a disaster 
recovery  contingency  plan. 
Consultants  with  recovery 
planning  experience  assist  the 
company  in  planning  for  the 
event  of  the  computer  facility 
being  inoperative  for  an 
extended  period  of  time. 

Question:  Can  a customer 
purchase  DEC  Direct  Access 
Advisory  Services  if  they  have 
only  DEC  personal  computers 
installed,  or  must  it  be  a 
multivendor  environment? 

Answer:  The  DEC  Direct  Access 
Advisory  Service  does  not  apply 
to  installations  of  only  personal 
computers.  It  does  not  matter  if 
the  installation  is  DEC  only,  or 
multivendor. 

Question:  Is  the  Surety  program 
the  only  program  Unisys  has 
that  covers  software? 

Answer:  Software  Excel  Basic 
does  not  cover  minicomputer 
software.  Coverage  is  available 
under  the  program  "System 
Extra,"  which  is  similar  to  Excel 
Basic,  but  not  as  comprehensive. 


INPUT 


0 1990  by  INPUT.  Reproduction  prohibited. 


June  1990 


Service  Update 


7 

Snippets 


❖ It  was  recently  announced  that  TRW,  Inc.  has 
placed  its  Customer  Service  Division, 
headquartered  in  Fairfield,  NJ  up  for  sale.  This 
move  is  a result  of  the  company's 
strengthening  focus  on  its  main  lines  of 
business.  TRW  is  still  actively  involved  in  the 
provision  of  customer  service  support  and  is 
continuing  to  increase  its  business. 

❖ Granada  Computer  Services  International  Ltd. 
has  recently  acquired  a New  Jersey  company, 
Essex  Computer  Service  Inc.,  a specialist  in 
Data  General  machines.  Granada  now  has  16 
sites  in  the  U.S. 

❖ In  contrast  to  the  recent  spate  of  mergers  and 
acquisitions.  Advance  Technology 
Maintenance  has  preferred  to  remain  small 
and  stable.  ATM  has  no  immediate  plans  for 
expansion,  preferring  instead  to  direct  its 
efforts  towards  the  changes  in  the  marketplace. 
ATM  has  around  100  employees  and  a 
turnover  of  about  $11  million.  Its  size  does  not 
mean  that  it  cannot  take  on  corporate  clients, 
however;  one  of  its  clients  is  British  Petroleum. 

ATM  has  also  recently  been  signed  up  by  NEC 
as  its  approved  maintenance  supplier. 

❖ ICL  is  now  in  a position  to  offer  disaster 
recovery  services  for  ICL  mainframe  users. 
There  are  already  around  8 companies  offering 
ICL  disaster  recovery  services,  such  as 
Sherwood  Computers  and  NMW  Computers, 
but  ICL  claims  to  be  able  to  offer  the  full  range 
of  services  from  consultancy  to  restart  services. 
ICL  is  offering  two  portfolios:  contingency 
management  and  recovery  management. 

There  are  plans  to  extend  the  service  to  cover 
its  UNIX  machines  by  the  end  of  the  year. 

❖ Tesco  Foodstores  Ltd,  a British  supermarket 
chain,  has  upgraded  its  computer  to  an 
Amdahl  5990-1400  mainframe.  This  is  to 
provide  additional  computing  facility  and  to 
handle  its  disaster  recovery  programme.  The 


machine  handles  warehousing  applications, 
financial  programming  and  on-line  stock 
control. 

MBS  has  acquired  the  Exchange  Telegraph 
Company  Ltd.,  which  has  contracted  annual 
maintenance  revenues  of  $9.5  million.  MBS  is 
also  merging  its  engineering  operation  with 
that  of  Extel  Information  Technology.  This  will 
lead  to  job  losses  and  closure  of  six  Extel  and 
MBS  locations.  Nearly  all  the  service  engineers 
will  be  retained,  however. 

*1*  Synapse  Computer  Services  pic  has  won  a 
contract  to  convert  Reuters  European  Data 
Centre  from  DOS/VSE  to  MVS.  The  contract  is 
worth  $480,000  and  is  due  to  be  completed  by 
September  this  year. 

❖ AT&T  Istel  Computer  Systems  is  a new 
company  formea  to  market  UNIX  systems, 
workstations  and  servers.  It  will  sell  through 
direct  and  indirect  channels. 

❖ Olivetti's  Customer  Support  Group  has  been 
awarded  a further  independent  maintenance 
contract  from  Barclay's  Bank,  worth  $4.7 
million.  The  total  value  of  Barclay's  account 
with  Olivetti  is  now  around  $27  million  a year. 
This  new  contract  includes  responsibility  for 
over  2,000  cash  dispensers,  installation  of  more 
workstations,  and  provision  of  a team  to 
address  network  faults. 

♦J*  Getronic  Service,  a Dutch  independent 
maintenance  company,  has  a five-year 
agreement  to  take  on  the  repairs  of  the  Mita 
Europe. 

❖ Sorbus  has  beaten  IBM  to  win  a contract  to 
maintain  Sun  Alliances's  IBM  equipment. 


June  1990 


O 1 990  by  INPUT.  Reproduction  prohibited. 


INPUT 


About  INPUT 


ESTPUT  provides  planning  information,  analysis,  and  recommendations  to 
managers  and  executives  in  the  information  processing  industries. 
Through  market  research,  technology  forecasting,  and  competitive 
analysis,  ESIPUT  supports  client  management  in  making  informed 
decisions. 


Continuous-information  advisory  services,  proprietary  research/ 
consulting,  merger/ acquisition  assistance,  and  multiclient  studies  are 
provided  to  users  and  vendors  of  information  systems  and  services 
Software,  processing  services,  turnkey  systems,  systems  integration, 
professional  services,  communications,  and  systems /software 
maintenance  and  support). 

Many  of  ESlPUT's  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior 
management  positions  in  operations,  marketing,  or  planning.  This 
expertise  enables  IMPUT  to  supply  practical  solutions  to  complex  business 
problems. 


Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a 
leading  international  research  and  consulting  firm.  Clients  include  more 
than  100  of  the  world's  largest  and  most  technically  advanced  companies. 


INPUT  OFFICES 


North  America 

Headquarters 
1280  Villa  Street 
Mountain  View,  CA  94041-1194 
(415)  961-3300 

Telex  171407  Fax  (415)  961-3966 
New  York 

959  Route  46  East,  Suite  201 
Parsippany,  NJ  07054 
(201)  299-6999 

Telex  134630  Fax  (201)  263-8341 

Washington,  D.C. 

1953  Gallows  Road,  Suite  560 

Vienna,  VA  22182 

(703)  847-6870  Fax  (703)  847-6872 


International 

London 

Piccadilly  House 
33/37  Regent  Street 
London  SWl  Y 4NF,  England 
(071)493-9335  Fax  (071)  629-0179 

Paris 

52,  boulevard  de  Sebastopol 
75003  Paris,  France 

(33-1)  42  77  42  77  Fax  (33-1)  42  77  85  82 
Tokyo 

Saida  Building 
4-6,  Kanda  Sakuma-cho 
Chiyoda-ku,  Tokyo  101,  Japan 
(03)864-0531  Fax  (03)  864-4114 


Route: 


INPUT 

Service 

Update 


©INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — International 

July  1990 


IN 

THIS 

1 ... 

..Philips  Information  and  Communication  Systems 

8... 

..Telub  Is  for  Sale 

ISSUE: 

News  from  the  U.S.: 

9 ... 

..Digital  Announces  Single-Source  Disaster  Recovery  Solution 

9... 

..Question  from  U.S.  Clients 

10. 

..IBM  Redefines  Focus  of  Customer  Service 

11  . 

..Snippets 

Philips  Information  and  Communication 
Systems  (ICS) 


NV  Philips  is  a 

multinational  company 
with  national  organisations  in 
over  60  countries,  which  are 
generally  wholly  owned 
subsidiaries.  It  employs  some 
300,000  people  worldwide  and 
its  revenues  approach  $30 
billion.  Among  NV  Philips' 
major  businesses  are: 

• Consumer  electronics 
• Professional  products  and 
systems 
• Components 
• Lighting 

• Domestic  appliances 


Over  60%  of  NV  Philips' 
revenues  come  from  Europe  and 
22%  come  from  North  America. 
In  1989,  Philips  reported  sales  of 
over  57  billion  Dutch  guilders. 

In  1988,  it  ranked  fifth  among 
the  top  fifteen  electronics 
companies  in  the  world. 

Philips  Group  policy  decisions 
are  made  by  the  Group 
Management  Committee,  which 
is  made  up  of  the  board  of 
management  of  NV  Philips  and 
a number  of  executives  from 
product  divisions  and  corporate 
staff  departments. 


Philips  Customer 
Service  Business 
Group 

Philips  Information  and 
Communication  Systems  (ICS)  is 
part  of  the  Professional  Products 
and  Systenis  Division,  with 
product  lines  such  as  PABXs, 
modems,  telephony  equipment 
and  PCs.  The  Customer  Service 
Business  Group  is  part  of  the 
Information  Systems  Group  and 
is  responsible  for  providing 
service  for  8 different  product 
groups: 


Continued  on  next  page 


Service  Update 


2 


Phil ipS . . .from  page  1 

• Data  systems 

• PCs 

• Business  communications 

• Radio  communications 

• Data  communications 

• Optical  storage 

• Public  and  rural  telephony 

• Dictation  systems 

The  breakdown  of  ICS'  revenues 
is  provided  in  Exhibit  A. 


Exhibit  A 


Philips  Information  and 
Communications  Systems 


Total  revenues  (worldwide) 

$ 3,160  million 

Customer  services  revenues 
(worldwide) 

$ 520  million 

Customer  services  personnel 

5,700 

Service  productivity 

$91 ,000/person 

Around  70%  of  ICS'  revenues 
are  generated  in  Europe.  The 
remaining  30%  come  mainly 
from  the  U.S.,  Canada,  the  Far 
East/Pacific  and  the  Middle 
East. 

Exhibit  B gives  a breakdown  of 
Philips'  European  Customer 
Services  revenues  for  1989. 

Exhibit  C:  Philips  Customer 
Services  - ICS  Organisation 


Expertise 

The  focus  of  the  customer 
service  groups  is  very  much  on 
open  systems,  with  skills  in 
UNIX,  MS-DOS,  and  PS2.  The 
customer  services  organisation 
is  part  of  X-Open.  Philips 
Customer  Services  believes  that 
a major  strength  of  the 
organisation  is  its  ability  to 
provide  an  integrated  service, 
whether  the  customer  is 
operating  on  voice  or  data. 

Philips  has  expertise  on  a wide 
range  of  equipment  as  part  of  its 
standard  portfolio.  Philips  will 
normally  service  other 
manufacturers'  equipment  if 
asked  to  do  so  by  a client.  This 
type  of  support  includes  the 
network,  systems  software, 
cabling,  voice  and  data  cabling. 
Philips  would  also  consider 
servicing  the  equipment  of  a 
potential  client  in  one  of  Philips' 
target  industries  (finance,  travel, 
transport  and  insurance),  using 
service  to  leverage  hardware 
sales. 

Philips'  Customer  Service 
Business  Group  offers  a range  of 
other  services  such  as  network 
management,  including 
management  of  cross-border 
networks.  Philips  is 
investigating  the  systems 
integration  market,  but  would 
only  consider  entering  selective 
markets  as  a member  of  a 
partnership. 

In  the  finance  market.  Philips 
offers  disaster  recovery  services, 
and  claims  to  be  able  to  provide 
mobile  vans  within  24  hours  to 
any  location  in  Europe. 


© 1990  by  INPUT.  Reproduction  prohibited. 


July  1990 


INPUT 


Service  Update 


3 


Service  is  sold  to  Philips'  clients 
partly  by  a team  dedicated  to 
service  sales,  and  partly  by  the 
product  sales  force.  The 
dedicated  team  sells  added 
value  to  the  client,  such  as  life 
cycle  management  and  other 
additional  services.  The  product 
sales  team  must  sell  service  as 
part  of  their  quotas. 

Exhibit  E shows  a typical  set-up 
of  a national  customer  service 
organisation. 

Philips’  Engineers 

Philips  views  the  customer 
engineer  very  much  as  the 
ambassador  of  the  customer 
service  organisation, 
representing  Philips  in  regular 
contacts  with  the  customer.  To  a 
large  extent,  the  engineer 
determines  the  degree  of 
satisfaction  of  the  customer 
base. 

When  recruiting  engineers,  the 
Customer  Service  Business 
Group  is  looking  for  two  groups 
of  people.  Firstly,  people  who 
can  communicate  well.  Service 
engineering  is  becoming  far  less 
skill-dependent  as  emphasis 
shifts  towards  replacing  parts 
rather  than  repairing  them. 
However,  Philips  also 
recognises  the  need  for  highly 
skilled  specialists  at  its  national 
support  centres.  In  general, 
excellent  customer  liaison  skills 
are  regarded  as  the  most 
important  criteria.  Engineers 
have  successfully  been  recruited 
from  sales  forces  and  banks,  for 
example,  and  retrained  in 
engineering  skills. 


Service-Related 

Products 

The  Integrated  Services 
Information  System  (ISIS)  has 


Exhibit  B 

Philips  Customer  Services 
1989  European  Revenue  Split 


been  implemented  in  a large 
number  of  customer  service 
organisations.  It  helps  the 
customer  service  group  control 
the  daily  operation  and  provides 
valuable  infonnation  on 
performance  management.  This 
product  was  developed 
internally  in  the  late  1970s  in 
Philips'  Corporate  Centre.  It 
was  then  packaged  and  sold 
commercially  to  clients  such  as 
Philips'  distributors.  A new 
product  developed  by  Philips  is 
Ambassador,  an  interactive 
video  on  customer  care  training. 


Continued  on  next  page 


July  1990 


© 1990  by  INPUT.  Reproduclion  prohibited. 


INPUT 


Service  Update 
4 


Exhibit  C 


Philips  Customer  Services 
ICS  Organisation 


Director 
(Worldwide) 
Customer  ServicesI 


Far 

East/Pacific 
North  America 
Rest  of  World 


Support 

Policy 

Implementation 


Development 

Service 

Strategies 

Marketing  Plans 

Marketing 

Communications 


Product 

Engineering 

Documentation 
and  Training 

Automation 

Systems 


INPUT 


O 1990  try  INPUT.  Reproduction  prohibited. 


July  1990 


Service  Update 


Philips’  Customers 

Philips  has  such  a wide  range  of 
products,  ranging  from  dictation 
machines  to  minis  and  PABXs, 
that  different  groups  of  clients 
have  different  requirements. 

The  three  client  groups  defined 
by  Philips  are  shown  in  Exhibit 
F. 

For  the  first  group — major 
accounts — the  main  customer 
requirement  is  for  100%  systems 
availability,  with  fast  response 
times,  performance 
management  and  no 
breakdowns.  These  clients  are 
less  inclined  to  require  total 
support,  as  they  want  to  retain 
control  of  the  system  and  they 
often  have  the  necessary  skills 
in-house. 

Clients  in  the  second  group  are 
very  often  highly  dependent  on 
their  systems,  using  them  to  run 
their  businesses.  Typically,  such 
clients  have  their  own 
operations  staff,  but  no  experts 
in-house  to  cope  with  failures. 
These  clients  need  a generalised 
support  package,  with  good 
telephone  support.  One 
hundred  percent  systems 
availability  and  fast  response 
times  are  not  such  important 
issues. 

At  the  personal  level,  quality  of 
service  is  more  important  in 
distinguishing  one  dealer  from 
another. 

Philips  aims  to  give  a fast 
response — within  2 hours, 
anywhere  in  Europe.  This 
means  that  its  engineers  must  be 
capable  of  servicing  a range  of 
products. 


5 

Competition  is  increasing  for 
these  large  accounts.  David 
Stubbs,  Customer  Services 
International  Marketing 
Director,  believes  that  when  the 
Single  European  Act  comes  into 
force,  pricing  will  be  forced 


Exhibit  D 

Philips’  Customer  Service  Mission: 
"Establish  market  leadership  with 
integrated  quality  support  services  in 
information  technology  and 
communications  to  meet 
the  needs  of  Philips  customers,  creating 
a long-term  business  relationship." 


down  and  competition  will 
increase  even  further.  David 
Stubbs  believes  that  service 
organisations  will  have  to 
change  their  emphasis  away 
from  hardware  support  to 
professional  services  in  order  to 
maintain  their  revenues. 

However,  Philips  believes  that 
the  single  European  market  will 
create  new  opportunities;  for 
example,  deregulation  in  the 
communications  environment 
will  open  up  opportunities  in  an 
area  previously  dominated  by 
the  PTTs. 


July  1990 


© 1990  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 


Philips.  . .from  page  5 
Exhibit  E 


National  Customer  Service  Organisation 

Basic  Setup 


Customer  Services 
Manager 


Controller 


Human 
Resources 


Quality 
Controller  | 


Central 
Engineering 
Support 


Logistics 

-Spares 

-Repairs 

Product 
Technical 
Management 


-Installation 

Services 
Branches 

National 
Support 
Centre 


Technical 

Training 

•Customer 

Training 


INPUT 


© 1990  by  INPUT.  Reprodudion  prohibited. 


July  1990 


Service  Update 


Philips’  View  of  1992 

Philips  believes  that  any 
changes  brought  about  by  the 
Single  European  Act  will 
probably  be  relatively  slow  to 
develop.  Full  implementation  of 
all  the  initiatives  could  take  until 
the  next  generation. 

Philips  also  believes  that  more 
European  companies  will  merge 
to  form  larger  and  stronger 
entities.  From  a customer 
service  viewpoint.  Philips  sees 
that  there  will  be  a move  to  offer 
uniform  service  pricing  across 
country  borders.  However, 
there  are  great  differences  in  the 
costs  involved  in  each  country; 
for  example  it  can  cost  four 
times  as  much  for  a field 
engineer  in  Sweden  than  for  one 
in  Portugal. 

The  1990s 

NV  Philips'  customer  service 
organisation  sees  the  coming 
decade  as  a challenging  one.  It 
believes  that  it  is  under  threat 
from  the  trend  towards  lower 
maintenance  pricing  and 
declining  revenues,  and  also 
from  the  major  equipment 
manufacturers  who  are  now 
providing  multivendor  services. 
NV  Philips  sees  a further 
potential  difficulty  in  converting 
customers,  who  are  currently 
accustomed  to  relatively  long 
warranties,  to  an  ongoing  fee- 
based  service  relationship. 


also  believes  that  there  is  an 
opportunity  to  enter  the 
multivendor  service  business  to 
handle  non-Philips  service 
requirements  for  major 
accounts.  Another  possible  way 
forward  is  to  offer  more  fee- 
based  training  programmes  for 
dealers  and  other  independent 
sales  organisations. 

Exhibit  G shows  the  anticipated 
changes  that  will  ocair  in 
Philips'  support  revenue  mix.  ■ 


Exhibit  F 


Philips  Account  Definition 


• Major  accounts — 1000+  employees 

• Medium  accounts — 100  - 500  employees 

• Personal-level  equipment  user 
- Sold  via  channels 


However,  Philips  believes  that 
there  are  also  plenty  of 
opportunities  for  expansion, 
such  as  increasing  its  software 
support  portfolio  and 
developing  a professional 
services  portfolio.  NV  Philips 


7 


July  1990 


«D  1990  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 


8 


Exhibit  G 

Change  in  Mix  in  Philips 
ICS  Support  Revenues 


SW  Support 


SW  Support 


Telub  Is  for 
Sale 

FFV  is  in  the  process  of 
restructuring  and  plans  to 

sell  off  its  Telub  Data/ 
Datagallerian  computer 
operations.  This  will  affect 
some  715  employees  in  around 
10  wholly  owned  and  associate 
companies,  with  a turnover 
close  to  SK  800  ($125m). 

The  president  and  CEO  Bo 
Sodersten  explained  that  as  the 
nature  of  computer  operatioiis  is 
different  from  the  company's 
other  activities,  it  is  seeking 
buyers  who  will  be  able  to  make 
the  appropriate  investments. 

Negotiations  are  currently 
underway  with  a consortium  led 
by  AB  Swedia  Corporate 
Finance. 

Telub  Data  comprises 
companies  active  in  consultancy, 
product  sales,  technical  service 
and  independent  maintenance. 
The  president  of  Telub  Data/ 
Datagallerian,  Giindor  Rentsch, 
believes  that  the  planned  change 
of  ownership  will  increase  the 
company's  opportunities  play 
an  active  role  in  the  current 
restructuring  of  the  computer 
market.  ■ 


INPUT 


© 1990  by  INPUT.  Reproduction  prohibited. 


July  1990 


Service  Update 


9 


Digital  Equipment 
Corporation  Announces 
Single-Source  Disaster 
Recovery  Solution 

On  June  25,  Digital  Equipment 
announced  enhancements  to  its 
disaster  recovery  services,  which 
will  provide  customers  with  a 
single-source  total  solution  for 
anticipating,  managing,  and 
recovering  from  disasters.  The 
new  service  enhancements 
include: 

• Eleven  Business  Recovery 
Centers  (BRCs)  across  the 
U.S.  providing  round-the- 
clock  access  to  backup  office 
space. 

• A new  Chicago  area  hot  site, 
providing  a backup  computer 
facility  in  addition  to  the 
facility  in  Parsippany,  NJ. 

• Total  Recovery  Planning 
System  (TRPS),  a PC-based 
software  package  to  assist 
customers  in  the 
development  and 
maintenance  of  disaster 
recovery  plans. 

The  eleven  BRCs  are  networked 
with  each  other  as  well  as  to  the 
hot  sites,  to  allow  aistomers  to 
work  from  local  BRCs  in  the 
event  of  a disaster  rather  than 
having  to  travel  to  the  hot  site. 
The  BRCs  are  equipped  with 
terminals,  workstations, 
printers,  and  telephones. 

The  Total  Recovery  Planning 
System  software  offers  a 
comprehensive  plan  to  develop 
custom  disaster  recovery  plans 
or  use  the  pre-forma  tted  reports 
included.  Key  features  of  the 


software  include  a detailed 
action  plan,  recovery  teams  and 
call  lists,  vendor  information, 
equipment  inventories  and 
damage  assessment  lists,  system 
software  infonnation,  and 
company  and  personnel 
information.  The  detailed 
methodology  addresses  the 
complete  disaster  recovery 
planning  process,  including  the 
topics  of  organizing  the 
planning  process,  establishing 
ground  rules  and  assumptions, 
conducting  disaster  recovery 
scenarios,  maintaining  the  plan, 
testing  the  plan,  and  assessing 
the  impact  of  loss. 

These  new  features  are  an 
addition  to  the  existing  Digital 
portfolio  of  disaster  recovery 
services  which  include 
RESTART  hot  site  access. 
Recover-all  on-site  maintenance 
supplement,  a complete  line  of 
environmental  products,  and 
security  and  training  services. 

Question  from  U.S. 
Clients 

On  the  subject  of  disaster 
recovery,  the  following  question 
was  asked  by  one  of  INPUT'S 
U.S.  clients: 

Q.  Who  is  XL/Datacomp  and 
what  disaster  recovery  services 
are  available? 

A.  XL/Datacomp,  Inc.  was 
established  in  1979  and 
currently  has  offices  throughout 
the  U.S.  It  has  been  a public 
company  since  1985.  It  is  one  of 
the  largest  third-party  IBM  sales 
and  service  companies  for 
midrange  systenis. 
XL/Datacomp  offers  three  types 
of  disaster  recovery  sites: 


© 1990  by  INPUT.  Reproduction  prohibited. 


July  1990 


INPUT 


Service  Update 


• Hot  sites  located  in  Anaheim 
(CA),  Irving  (TX),  Kansas 
City,  Chicago,  Atlanta,  and 
Springfield  (NJ).  Sites  at 
Menlo  Park  and  Philadelphia 
offer  AS/400s  only.  Sites  in 
Kansas  City  and  Atlanta  offer 
System  38s  only. 

• Warm  sites  in  Detroit, 
Charlotte  (NC),  Tampa  (FL), 
Columbia  (MD),  and 
Columbus  (OH)  offer  data 
entry,  printers,  and 
communication  facilities. 

• Cold  sites  in  Anaheim, 
Chicago,  Irving,  and 


Springfield  provide  power 
and  space  for  additional 
systems. 

IBM  Announcement 
Redefines  Focus  of 
Customer  Service 
Today 

On  June  20,  IBM  announced 
changes  in  the  internal  reporting 
structure  of  its  customer  service 
function.  The  area  customer 
service  managers  now  report 
directly  to  the  Marketing  and 
Services  General  Managers  in 
the  geographic  locations  rather 


than  to  National  Service 
Division  (NSD)  headquarters. 
This  change  places 
responsibility  for  the  delivery 
and  management  of  customer 
service  in  the  hands  of  the 
geographic  organisations.  The 
move  further  positions  and 
emphasizes  the  responsibility  of 
the  IBM  field  staff  to  more 
effectively  respond  to  new 
demands  for  service  and 
capitalizes  on  the  demand  for  an 
expanded  full  range  of  customer 
service  offerings. 

Exhibit  H illustrates  the  new 
structure.  ■ 


INPUT 


© 1990  by  INPUT.  Reprodudion  prohibKed. 


July  1990 


Service  Update 


11 


Snippets 


♦t*  MBS  Engineering,  a British  independent 
maintenance  company,  has  changed  its 
name  to  Firstpoint. 

♦t*  Sixty-seven  percent  of  Paris-based  CPG  SA 
and  Conseil  Assistance  Electronique  SA  has 
been  bought  by  Systems  Reliability  pic. 

CPG  offers  transportation  and  storage 
services  for  mainframes. 

♦t*  Texas  Instruments  Incorporated  has 

opened  an  office  in  Budapest,  Hungary,  to 
serve  parts  of  Central  and  Eastern  Europe. 
Its  role  will  be  as  an  information  and 
technical  liaison  centre. 

*1*  Bell  Atlantic  Business  Systems  Services 
(formally  Sorbus)  has  won  a contract  from 
Sun  Microsystems  Inc.  to  provide  hardware 
maintenance  for  Sun's  Eastern  U.S.  custom- 
ers. 

♦♦♦  An  agreement  has  been  made  between 
Thom  EMI  Computeraid  and  Apple  Com- 
puter to  enable  Computeraid  to  become  a 
supplier  of  third  party  maintenance  for 
Apple  products.  Support  will  be  provided 
from  11  service  centres  across  the  U.K. 

❖ Thom  EMI  Computeraid  has  acquired  the 
rental  assets  of  CCA  Microrentals,  which 
went  into  receivership  in  Febmary. 
Microrentals  deals  in  the  short-temi  rental 
of  IBM,  Compaq  and  Apple  computers. 

♦t*  CE-Tech  pic,  based  in  Hounslow, 

Middlesex,  has  been  taken  into  receivership 
and  is  now  for  sale.  CE-Tech  is  a computer 
sales  and  services  company  with  a turnover 
of  around  £5  million  per  annum. 


<♦  IBM  Gennany  has  launched  a recycling 
programme  whereby  it  will  take  back  old 
unwanted  IBM  computers  and  electronic 
calculators.  IBM  believes  that  85%  of  the 
parts  are  recyclable.  Customers  are  charged 
for  the  service. 

Anistrad  UK  is  reorganising  its  spare  parts 
operation.  A new  facility  is  being  set  up  at 
Anistrad's  Stafford  location  and  will  be 
known  as  Amstrad  Spares. 

*1*  A new  division  of  Bell  Atlantic  Computer 
Services  Inc.  has  been  created:  Bell  Atlantic 
Computer  Technology  Services  Inc.  (CTS). 
This  new  division  is  an  amalgamation  of 
Bell's  three  repair,  refurbishment  and  logistic 
support  services.  It  now  claims  to  be  the 
largest  such  company  in  the  U.S. 

*t*  In  the  U.S.  on  19  June,  IBM  announced  both 
increased  and  decreased  prices  to  customers 
for  maintenance  agreement  service  and 
warranty  option  charges.  These  changes 
apply  to  machines,  models  and  features  of 
selected  IBM  and  non-IBM  products.  Price 
decreases  that  apply  range  from  3%  to  20%, 
and  price  increases  range  from  5%  to  25%. 
The  changes  become  effective  for  billing 
periods  starting  on  or  after  October  1,  1990. 

K*  McDonnell  Douglas  Field  Service  Company 
(MDFSCO)  announced  the  new  Business 
Partnering  service  option  at  DEXPO  East  90, 
offering  more  flexible  services  and  a value- 
added  service  solution.  Through  this  option, 
MDFSCO  provides  service  to  customers  on 
behalf  of  OEMs  and  resellers,  freeing  them  to 
concentrate  on  the  manufacture  and  distribu- 
tion of  products. 


July  1990 


© 1990  by  INPUT.  Reproduction  prohiblled. 


INPUT 


About  INPUT  I 

ESTPUT  provides  planning  information,  analysis,  and  recommendations 
to  managers  and  executives  in  the  information  processing  industries. 
Through  market  research,  technology  forecasting,  and  competitive 
analysis,  INPUT  supports  client  management  in  making  informed 
decisions. 

Continuous-information  advisory  services,  proprietary  research/ 
consulting,  merger/acquisition  assistance,  and  multiclient  studies  are 
provided  to  users  and  vendors  of  information  systems  and  services 
(software,  processing  services,  turnkey  systems,  systems  integration, 
professional  services,  communications,  systems /software 
maintenance  and  support). 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialization.  Most  have  held  senior 
management  positions  in  operations,  marketing,  or  planning.  This 
expertise  enables  INPUT  to  supply  practical  solutions  to  complex 
business  problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a 
leading  international  research  and  consulting  firm.  Clients  include  more 
than  100  of  the  world's  largest  and  most  technically  advanced 
companies. 


North  America 

San  Francisco  Bay  Area 
1280  Villa  Street 
Mountain  View,  CA  94041-1194 
Telephone  (415)  961-3300 
Fax  (415)  961-3966 

New  York 

959  Route  46  East,  Suite  201 
Parsippany,  NJ  07054 
Telephone  (201)  299-6999 
Fax  (201)  263-8341 

Washington,  D.C. 

1953  Gallows  Road,  Suite  560 
Vienna,  VA  22182 
Telephone  (703)  847-6870 
Fax  (703)  847-6872 


INPUT  OFFICES 

International 

London 

Piccadilly  House 

33/37  Regent  Street 

London  SWIY  4NF,  England 

Telephone  (071)  493-9335  Fax  (071)  629-0179 

Paris 

52,  boulevard  de  Sebastopol 
75003  Paris,  France 
Telephone  (33-1)  42  77  42  77 
Fax  (33-1)  42  77  85  82 

Frankfurt 
Sudetenstrasse  9 
D-6306  Langgons-Niederkleen 
West  Germany 

Tokyo 

Saida  Building 
4-6,  Kanda  Sakuma-cho 
Chiyoda-ku,  Tokyo  101,  Japan 
Telephone  (03)  864-0531  Fax  (03)  864-41 1 4 


INPUT 

Service 

Update 


Route: 


INPUT  L 


©INPUT 


received  AUG  2 8 


1990 


A Publication  from  INPUT'S  Customer  Service  Programme — International 

August  1990 


IN 

THIS 

ISSUE: 


I  cue — Offering  Clients  Continuity  In  Their  Business  Operations 

7 The  Amdahl  Executive  Institute — Amdahl  Highlights  Disaster  Recovery 

9 Laserforce — New  Printer  Maintenance  Company  Launched 

I I ...Snippets 


cue — Offering  Clients  Continuity  in  Their 
Business  Operations 


Cue  (Computer  Uitwijk 
Centrum  BV)  is  a disaster 
recovery  company,  based  in 
Lelystad  in  the  Netherlands, 
cue  was  founded  in  1981  and  is 
part  of  Adia  with  Meridian 
International,  which  owns  a 
majority  shareholding.  Adia  is 
the  world's  second  largest 
business  services  group.  Other 
shareholders  are  KLM  (Royal 
Dutch  Airlines)  and 
Nederlandsche  Middenstands 
Postbank. 

The  company's  mission  is  "to 
deliver  quality  computer  conti- 
nuity services  and  facilities."  In 
the  event  of  a disaster,  CUC's 
clients  can  switch  over  to  CUC's 
facilities,  which  are  available  24 
hours  a day  all  year  round. 


cue  has  had  experience  in 
handling  real-life  disasters — ^so 
far  over  ten,  of  varying 
serverity,  have  been  dealt  with. 
In  CUC's  experience,  most 
disasters  are  caused  by  mechani- 
cal problems,  such  as  faulty  air- 
conditioning,  power  supplies  or 
other  building  problems. 

The  company  was  initially  set 
up  by  a consortium  of  users,  and 
its  first  contract  (for  an  IBM 
mainframe  configuration)  was 
awarded  in  1983.  Exhibit  A 
shows  how  cue  developed  its 
business  during  the  1980s. 

cue  Facilities 

The  disaster  recovery  facilities 
are  housed  in  a special  purpose- 
built  building  constructed  in 


Lelystad  after  an  in-depth 
analysis  was  carried  out  to 
assess  its  suitability.  As  part  of 
the  security  of  the  facility,  the 
building  is  not  in  any  flight 
paths,  is  situated  away  from  any 
potential  hazards  and  is  sur- 
rounded by  water,  making 
access  by  intruders  more  diffi- 
cult. It  is  constructed  on  re- 
claimed land,  but  in  an  area  in 
which  danger  from  flooding  is 
nonexistent.  In  the  event  of  an 
emergency,  CUC  has  an  ar- 
rangement with  the  local  police 
whereby  access  to  the  site  can  be 
cut  off  completely  within  20 
minutes. 

CUC  claims  to  be  the  only 
independent  professional 
disaster  recovery  company  in 
Europe  that  is  solely  dedicated 

Continued  on  next  page 


Service  Update 


2 


cue.  . .from  page 


to  that  one  service.  All  other 
competitors  are  involved  in 
other  services,  such  as  mainte- 
nance, equipment  manufacture 
and  professional  services.  CUC 
believes  that  this  specialisation 
gives  it  a competitive  advan- 
tage— all  its  resources  are 
devoted  to  providing  compre- 
hensive disaster  recovery  ser- 
vices for  its  clients.  CUC  is  also 
independent  of  any  supplier. 


Exhibit  A 


CUC  Development 


1983  CUC  wins  first  IBM  mainframe  contract 

1 984  Support  for  IBM  midrange  systems 

1 987  1 00  Customers,  40  staff,  CUC  breaks  even 

1 988  Support  for  DEC  and  HP  equipment  + DG 

1989  Investment  in  IBM  3090-600E  and  AS/400 

1990  Ministry  of  Defence  becomes  180th  customer 


CUC  now  has  around  200 
clients — mainly  in  the  Nether- 
lands, but  also  some  in  Belgium 
and  Germany — and  plans  to 
extend  its  client  base  to  the  rest 
of  Europe.  CUC's  facilities  are 
extensive — CUC  will  provide 
clients  with  the  necessary 
hardware  configuration,  includ- 
ing printers  and  other  periph- 
eral devices,  to  enable  the  client 
to  continue  its  day-to-day 
business  operations.  Interest- 
ingly, CUC  uses  25%  of  the 
power  supplied  to  the  city  of 
Lelystad. 

The  capability  available  to 
clients  in  terms  of  computing 
power,  storage  and  communica- 
tions is  listed  in  Exhibit  B. 


Sales  Cycle 

The  sales  cycle  obviously  varies 
from  customer  to  customer,  but 
broadly,  CUC  creates  awareness 
of  its  services  and  then  identifies 
the  executive  decision  makers  in 
the  client  company.  There  is 
usually  more  than  one  decision 
maker  and  now  there  is  a grow- 
ing tendency  for  this  type  of 
decision  to  be  made  at  board 
level,  not  just  in  the  DP  depart- 
ment. 

Time  is  spent  understanding  the 
clients'  criteria,  priorities  and 
requirements,  and  then  CUC 
presents  a disaster  recovery 
solution.  The  disaster  recovery 
proposal  is  always  developed 
with  the  client,  and  the  client 
always  makes  an  appointment 
to  view  CUC's  facilities. 

All  CUC's  clients  have  to  pass  a 
security  audit  to  ensure  that  the 
risk  of  a disaster  occurring  is 
minimised.  Eor  example,  cli- 
ents' backup  procedures  are 
reviewed,  air  conditioning  is 
checked,  the  building  is  assessed 
with  regard  to  danger  from  local 
hazards  (flight  paths,  factory 
emissions,  roads)  and  fire- 
proofing and  fire-fighting 
equipment  is  checked.  If  the 
client  fails  this  audit  and  the 
problem  cannot  be  resolved, 
CUC  will  decline  to  accept  the 
client,  as  would  an  insurer. 

Price  varies  greatly  from  client 
to  client,  so  it  is  difficult  to  give 
guidelines.  CUC  believes  that 
many  clients  are  surprised  by 
the  costs — they  are  lower  than 
expected.  Price  is  negotiated 
individually  with  each  client 
company  and  varies  with  a 
number  of  factors,  such  as  speed 
of  recovery  time,  amount  and 
frequency  of  data  recovered. 


© 1990  by  INPUT.  Reproduction  prohibited. 


August  1990 


INPUT 


Service  Update 


amount  of  testing  required  and 
any  enhanced  services  required. 
Clients  often  judge  the  price  by 
expressing  it  as  a percentage  of 
their  annual  turnover;  accept- 
able limits  vary  from  company 
to  company.  CUC  believes  that 
its  service  is  competitive  and 
offers  good  value  for  money — 
clients  are  taking  advantage  of  a 
shared  resource  facility. 

The  plans  are  then  acceptance- 
tested  with  the  customer.  The 
plan  includes  manuals  with  set 
validated  procedures  and 
named  individuals  responsible 
for  carrying  out  the  plan.  The 
plans,  once  accepted,  must  be 
tested  regularly  and  named 
individuals  updated  as  neces- 
sary. Some  clients  test  as  often 
as  every  ten  weeks,  some  test 
twice  a year.  Other  clients  test 
various  modules  of  the  plan 
frequently  and  perform  the 
complete  test  less  often. 

Range  of  Service 

The  service  that  CUC  offers  is 
always  tailored  to  each  cus- 
tomer. CUC  has  a range  of 
options  available,  and  customers 
normally  take  a mixture.  Typi- 
cally, in  the  event  of  a disaster, 
the  customers'  configuration  can 
be  reproduced  within  the  speci- 
fied time  frame  at  CUC.  For 
some  clients,  this  time  is  two 
hours;  for  others  the  next  day 
may  suffice.  In  addition  to  the 
system,  CUC  also  makes  avail- 
able office  space,  with  furniture, 
telephone  and  fax  machines,  and 
a catering  service.  There  are 
also  print  rooms  with  equip- 
ment available  for  carrying  out 
mailings  and  invoicing. 


Clients  can  use  the  disaster 
recovery  centre  in  a number  of 
ways.  In  the  event  of  a disaster, 
the  client's  business  can  be 
operational  in  the  centre  within 
the  time  frame  specified  in  the 
contract.  If  the  disaster  is  such 
that  the  company  cannot  move 
its  operations  back  to  its  own 
premises  within  the  specified 
time  frame,  then  a company  can 
move  into  an  'empty  shell'.  This 
is  where  CUC  provides  an 
empty  computer  room  and  the 
company  provides  its  own 
hardware.  This  room  can  be 
available  for  up  to  18  months. 

Clients  can  also  use  CUC's 
facilities  when  they  need  to  use 
equipment  for  testing  pur- 
poses— for  example,  to  try  out  a 
new  software  package.  Also,  if 


CUC 

Capability 


Computing  Power 

- 80  MIPS 

Storage 

- 400  Gigabytes 

Communications 

- > 7,000  terminals 

can  be  supported 

the  client  has  an  urgent  task  that 
would  run  more  efficiently 
away  from  the  overloaded 
company  computer,  employees 
can  arrange  to  use  CUC's  facili- 
ties. 

CUC  offers  a mobile  disaster 
recovery  solution  as  well,  where 
a disaster  recovery  system  can 
be  relocated  anywhere  in  Eu- 
rope within  24  hours. 


Continued  on  next  page 


August  1990 


© 1990  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 


4 


cue.  . .from  page  3 


It  is  obviously  important  for  a 
disaster  recovery  company  to 
have  plans  in  the  event  of 
multiple  disasters.  Although 
cue  believes  that  the  risk  of  a 
multiple  disaster  is  very  low,  in 
the  event  of  a conflict  there  are 
allocation  algorithms  which 
apply.  These  are  negotiated  at 
the  time  of  contract,  and  each 
company  is  aware  of  what 
procedures  are  put  into  place  in 
the  event  of  such  a conflict. 


Directors 


• Henk  Geerdink-  responsible  for  technical 
support,  communications  operations  and 
customer  services 

• Bert  Jaspers  - responsible  for  product 
development  and  management,  marketing, 
sales  and  public  relations 

• Tim  McGinn  - has  executive  powers  from  the 
cue  supervisory  Board  to  manage  the 
business.  He  is  also  deputy  Managing 
Director  of  Meridian  International. 

• Joop  van  den  Pangaart  - responsible  for 
finance  and  administration,  security  and  site 
services 


cue  has  sophisticated  commu- 
nications links  and  has  found 
the  Dutch  PTT  very  helpful.  By 
using  identification  codes,  CUC 
believes  that  its  computers  are 
hacker-proof  over  the  remote 
lines.  Clients  dial  in,  are  veri- 
fied, and  then  are  asked  to  dial 
back  on  a given  number  which 
will  allow  them  to  access  the 
computer. 


CUC  aims  to  attract  clients  from 
elsewhere  in  Europe,  but  needs 
co-operation  from  the  various 
PTTs  so  that  communications 
links  can  be  set  up. 

CUC  believes  that  the  security  in 
its  buildings  gives  it  a competi- 
tive advantage.  It  is  essential  to 
be  able  to  demonstrate  to  its 
clients  that  their  data  is  safe — 
particularly  the  banks.  Access 
to  the  building  is  strictly  con- 
trolled by  security  guards. 
Visitors  must  show  identifica- 
tion and  visitors  must  be  ex- 
pected by  prior  arrangement. 
Once  inside  the  building,  the 
various  computer  rooms  are 
protected  by  double  sets  of 
doors,  controlled  by  a 
Honeywell  card  system.  Video 
cameras  are  situated  throughout 
the  building  and  outside  it.  The 
site  is  guarded  twenty-four 
hours  a day,  all  year. 

Company  Organisation 

cue  has  four  directors,  as 
shown  in  Exhibit  C.  Exhibit  D 
shows  the  structure  of  the  rest  of 
the  company. 

The  Future 

The  directors  at  CUC  believe 
that  the  market  for  disaster 
recovery  is  increasing.  Aware- 
ness is  growing,  and  companies 
are  beginning  to  believe  that 
disasters  could  happen  to  them, 
especially  in  the  wake  of  inci- 
dents such  as  the  California 
earthquake,  gales  in  the  U.K. 
and  the  flooding  of  the  Seine  in 
Paris.  In  the  Netherlands  there 
is  also  pressure  from  third 
parties  stimulating  the  market. 
Next  year,  it  is  likely  that  com- 
panies dependent  on  informa- 
tion systems  for  their  business 


INPUT 


© 1990  by  INPUT.  Reproduction  prohibited. 


August  1990 


Service  Update 


Exhibit  D 


cue  Company  Organisation — 70  Staff 


cue  Catering 
Services 


B 


cue  Assistance  et 
Secours  Informatique 
S.A.,  Bruxelles 


cue  Maintenance  I 

I 


I 


GB 

cue  Computer  Backup 
Centre  Ltd. 
London 


August  1990 


© 1990  by  INPUT.  Reproduaion  prohibKed. 


INPUT 


Service  Update 


6 


cue.  . .from  page  5 


will  have  to  be  audited  every 
year  to  prove  that  they  have 
proper  plans  in  the  event  of  a 
disaster.  This  audit  is  likely  to 
become  a standard  part  of  a 
company's  annual  report.  Also, 
insurance  companies  are  more 
likely  to  offer  competitive 


Exhibit  E cue 

Escrow  Service 


Adequate  storage 
Legal  support 
Technical  support 
Practical  approach 
Continuity 

International  coverage 


premiums  if  comprehensive 
contingency  plans  can  be  dem- 
onstrated. The  insurance  com- 
panies are  scrutinising  plans 
with  increasing  care.  The 
directors  also  believe  that  more 
companies  will  enter  the  market, 
but  that  many  of  these  will  not 
make  adequate  investment  and 
commitment. 

Escrow  Services 

cue's  escrow  service  was 
launched  in  October  1989.  This 
a service  for  users  and  vendors 
of  software,  whereby  source 
code  can  be  deposited  with  CUC 
for  safe-keeping.  CUC  believes 
that  this  service  is  a natural 


extension  of  its  disaster  recovery 
services,  and  is  consistent  with 
cue's  aim  of  providing  conti- 
nuity of  service.  CUC  believes 
that  its  service  is  unique.  CUC 
believes  that  in  the  United 
States,  most  escrow  services  are 
offered  by  lawyers  and  they  do 
not  have  the  right  conditions  for 
storing  tapes,  nor  do  they 
necessarily  ensure  that  the 
source  code  is  kept  up-to-date 
and  regularly  tested. 

CUC  believes  that  it  can  offer 
six  important  features  which  are 
listed  in  Exhibit  E. 

Storage 

Security  at  CUC  is  very  high 
and  the  building  already  has  the 
correct  conditions  for  data 
storage,  such  as  antistatic  car- 
pets. Each  client  is  given  a box, 
which  is  uniquely  sealed.  CUC 
has  strict  procedures  for  allow- 
ing access  to  the  data  once  it  is 
stored.  Each  client  has  to  supply 
two  authorised  names  and  these 
are  checked  regularly  to  protect 
against  unauthorised  withdraw- 
als and  deposits. 

The  Agreement 

The  agreement  itself  has  under- 
gone several  revisions  by  vari- 
ous lawyers  and  is  now  said  to 
be  accepted  by  U.S.  lawyers  and 
to  have  been  tested.  The  agree- 
ment is  flexible  in  structure  to 
allow  for  clients'  different 
needs — for  example,  different 
MTTRs  (Mean  Time  To  Release) 
can  be  applied.  A condition  of 
the  licence  agreement  is  that  the 
source  code  must  be  returned  to 
CUC  after  any  withdrawal — the 
client  only  needs  the  sources  for 
continuity  purposes. 


INPUT 


© 1990  by  INPUT.  Reproduaion  prohibited. 


August  1990 


Service  Update 


Verification  and  Testing 

cue  offers  a verification  service 
as  a standard  part  of  the  escrow 
service.  Verification  of  the 
source  code  is  seen  as  an  essen- 
tial part  of  the  service.  CUC 
asks  the  supplier  how  the  data 
was  put  into  the  storage  media, 
which  language  it  is  written  in, 
how  many  blocks  there  are  and 
how  it  is  labelled.  This  is  to 
ensure  that  the  data  is  copyable 
and  readable  at  CUC.  CUC  also 
specifies  that  the  associated 
documentation  and  any  devel- 
opment tools  are  also  there.  All 
of  these  conditions  are  written 
into  the  escrow  agreement.  In 
cue's  experience,  eight  times 
out  of  ten  there  is  a problem 
when  copying  the  data,  usually 
as  a result  of  human  error.  The 
rigourous  checks  applied  ensure 
that  the  data  that  is  stored  is 
correct. 

A further  stage  offered  by  CUC 
is  testing.  Verification  guaran- 
tees that  the  sources  can  be 
released  in  the  same  state  as 
they  went  into  escrow,  but  does 
not  guarantee  that  the  object 
code  will  be  the  same.  CUC, 
using  Coopers  and  Lybrand  as  a 
DP  auditor,  will  compile  the 
sources  and  compare  the  object 
code. 

CUC  ensures  that  the  suppliers 
update  the  sources  whenever 
changes  are  made.  At  the  end  of 
a year,  CUC  writes  to  the  users 
and  suppliers  and  lists  the 
updates  that  have  been  made  for 
that  year.  Every  two  years,  the 
total  deposit  must  be  updated  to 
enable  the  storage  media  to  be 
renewed. 


The  escrow  service  is  applicable 
to  any  user  or  supplier,  no 
matter  where  they  are  located. 
The  benefit  of  escrow  for  users  is 
that  they  get  protection  from 
suppliers  going  out  of  busi- 


The  Amdahl  Executive 

Institute  was  established  by 
Amdahl  Europe  in  response  to 
the  growing  need  for  Imowledge 
and  understanding  about  the 
management  of  information 
technology. 

The  published  objectives  of  the 
institute  are: 

• To  assist  senior  executives  of 
large  European  corporations 
to  appreciate  the  potential 
and  scope  of  information 
technology  and  to  under- 
stand the  management  issues 
involved  in  applying  it 
effectively. 

• To  help  those  responsible  for 
managing  information  sys- 
tems to  do  so  as  successfully 
as  possible. 

In  order  to  achieve  these  aims 
the  Amdahl  Executive  Institute 
adopts  two  main  approaches. 
One  approach  is  to  organise 
conferences  at  which  selected 
audiences  are  addressed  by 
leading  world  authorities  on  key 
management  topics.  Examples 
of  notable  speakers  at  these 
conferences  include  Sir  John 
Harvey-Jones,  a leading  indus- 
trialist, and  Professor  Michael  E. 
Porter  of  the  Harvard  Business 


ness — they  will  still  have  access 
to  source  code  of  their  systems. 
It  also  assists  continuity  so  that 
their  business  can  continue  in 
the  event  of  disaster.  ■ 


School.  The  second  approach 
involves  conducting  applied 
research  into  the  application  and 
management  of  information 
technology,  the  results  of  which 
are  made  available  through 
seminars,  executive  briefings 
and  published  reports. 

The  Director  of  the  Amdahl 
Executive  Institute  is  Alan  Bell, 
who  is  also  Marketing  Director 
of  Amdahl  Europe.  Previous 
reports  published  by  the  Insti- 
tute include: 

• "Business  Success  and  Infor- 
mation Technology  - Strate- 
gies for  the  1990's" 

• "Innovation  Through  Infor- 
mation Technology  - Manag- 
ing Change" 

Both  of  these  studies  were  the 
basis  of  Amdahl  Executive 
Institute  conferences. 

The  most  recent  report  issued  by 
the  institute  is  titled  "Computer 
Disasters  and  Contingency 
Planning"  and  contains  the 
results  of  research  commis- 
sioned by  the  Amdahl  Executive 
Institute.  The  report  was 
launched  at  a press  conference 
held  at  the  Inn  On  The  Park 
Hotel  in  London  on  July  4th  this 


The  Amdahl  Executive 
Institute 


August  1990 


© 1990  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 


8 

Amdahl.  .from  page  7 

year,  which  was  attended  by 
members  of  the  press  from 
throughout  Europe.  Represen- 
tatives of  E^JPUT  were  invited  to 
attend  this  press  conference. 

Amdahl  Highlights 
Disaster  Recovery 

The  most  recent  report  pub- 
lished by  the  Amdahl  Executive 
Institute  highlights  various 
aspects  of  disaster  and  contin- 
gency planning,  and  stresses 
that: 

• There  is  increasing  awareness 
of  the  importance  of  disaster 
recovery  and  contingency 
planning  among  senior 
managers. 

• There  is  a growing  awareness 
among  senior  managers  of 
the  need  for  commitment  to 
effective  planning  to  cover 
disaster  situations. 

• Many  companies,  however, 
still  adopt  a "head  in  the 
sand"  attitude  believing  (or 
hoping)  that  disasters  will  not 
happen  to  them. 

• If  the  top  executives  in  a 
company  do  not  ensure  that 
the  integrity  of  their 
company's  computer  systems 
is  protected,  they  are  failing 
in  their  responsibility. 

Recommendations  made  by 
Amdahl  in  its  report,  aimed  at 
establishing  effective  disaster 
recovery  and  contingency  plans, 
cover  three  aspects.  Firstly,  a 
company  should  identify  pri- 


mary threats  to  its  computer 
systems  and  establish  what 
actions  are  needed  to  protect 
against  these  threats.  Secondly, 
companies  should  develop 
procedures  that  can  be  imple- 
mented in  the  event  of  a disas- 
ter, procedures  that  will  ensure 
adequate  backup  of  data  and 
permit  recovery  from  a disaster. 
Once  procedures  have  been 
established  they  should  be 
tested  during  regular  full  re- 
hearsals, and  should  be  re- 
viewed and  upxiated  as  neces- 
sary. 

The  press  conference  also 
stressed  the  need  for  companies 
to  understand  the  relationship 
between  the  cost  of  protection 
against  disasters  and  the  likely 
cost  of  a disaster  occurring.  A 
real-life  example  of  this  relation- 
ship was  provided  during  the 
press  conference  by  the  case  of 
Tesco  PLC,  a major  U.K.  super- 
market group.  The  example 
compared  Tesco's  investment  in 
disaster  recovery  of  £15  million 
(approximately  $24  million), 
against  a potential  loss  of  3 
months'  growth  equalling  £24 
million  (approximately  $38 
million)  in  lost  profit,  if  its 
computer  system  was  put  out  of 
action  for  more  than  2 days. 

This  example  highlights  the 
potential  risk  of  even  a short- 
term disaster. 

To  highlight  the  potential  causes 
of  disaster  to  a company's 
computer  operations,  the  report 
indicates  that  disasters  usually 
occur  as  a result  of  the 
following: 

• 30%  of  disasters  are  due  to 
natural  phenomena  such  as 
flood,  fire,  earthquake,  etc. 


• 70%  of  disasters  are  the  result 
of  human  intervention.  This 
percentage  is  subdivided  into 
25%  caused  by  human  error 
and  45%  due  to  deliberate 
sabotage  or  hacking. 

Following  the  press  conference 
INPUT  was  fortunate  to  have 
the  opportunity  to  discuss 
disaster  recovery  briefly  with 
Alan  Bell,  EHrector  of  the 
Amdahl  Executive  Institute. 
Ehjring  this  discussion  Alan  Bell 
offered  the  opinion  that  provi- 
sion of  hardware  only  as  a 
disaster  recovery  service  was 
insufficient  protection,  and  that 
contingency  plans  covering  the 
total  computer  operation  were 
more  important.  Contingency 
plans,  including  services  aimed 
at  consultancy  and  data  secu- 
rity/backup, are  much  more 
critical  to  successful  recovery. 

To  underline  this  view,  Alan 
Bell  quoted  an  example  where 
alternative  hardware  was 
provided  by  Amdahl — very 
quickly — in  a recent  disaster 
situation,  and  concluded  that 
"providing  alternative  hardware 
is  the  easy  bit." 

INPUT'S  own  research  indicates 
that  only  about  50%  of  computer 
users  throughout  Europe  claim 
to  have  access  to  a disaster 
recovery  service.  Further, 
discussions  with  service  vendors 
suggest  that  a relatively  high 
percentage  of  users,  relaxing  in 
the  security  of  disaster  recovery 
protection,  may  in  fact  be  inad- 
equately protected.  Therefore 
INPUT  concurs  that  a high 
proportion  of  computer  users  is 
exposed  to  risk  in  the  event  of  a 
computer  disaster.  ■ 


INPUT 


© 1990  by  INPUT.  Reproduction  prohibited. 


August  1990 


Service  Update 


9 


Laserforce — New  Printer  Maintenance 
Company  Launched 


A profile  of  Laserforce  is  pro- 
vided in  Exhibit  F. 


those  where  service  capability  is 
dependent  on  build  standard. 


Exhibit  F 


Laserforce  Profile 


• Revenue  forecast 
-£1.1  million  in  1990 
-£2.0  million  in  1991 

• Total  staff  - 20 

• Strengths 
-Existing  base 
-Home  counties 
-Medium-speed  printers 


On  July  4th  this  year,  a new 
company  specialising  in  the 
repair  and  maintenance  of  laser 
printers  was  launched  in  the 
U.K.  The  new  company, 
Laserforce,  timed  announcement 
of  its  own  independence  to 
coincide  with  Independence 
Day  celebrations  in  the  U.S.  As 
part  of  the  launch,  the  publicity 
brochure  circulated  by 
Laserforce  included  an  introduc- 
tory offer  in  the  form  of  a 
voucher  valued  at  £100  (ap- 
proximately $169),  which  could 
be  used  as  part  payment  for  a 
customer's  first  maintenance 
contract. 

Laserforce,  as  a new  company,  is 
the  result  of  a decision  by  Rental 
Research  to  establish  its  existing 
maintenance  operations  as  a 
separate  company.  As  the  sole 
owner  of  Laserforce,  Rental 
Research  markets  a range  of 
laser  printers  and  controllers, 
and  can  provide  the  new  com- 
pany with  access  to  an  existing 
installed  base  from  which  the 
business  can  expand.  Rental 
Research  owns  ATI,  a United 
States-based  company,  which 
also  markets  laser  printers  and  a 
range  of  in-house-developed 
controllers.  The  controller 
product  range  developed  by  ATI 
is  sold  in  the  U.K.  by  Rental 
Research  under  its  own  name. 
The  General  Manager  of 
Laserforce  is  Brian  Wright,  who 
was  previously  with  Erskine 
Support  Services,  and  the 
company's  registered  address  is 
in  the  centre  of  London. 


The  company  currently  employs 
a staff  of  20,  which  includes  1 6 
field  engineers,  2 base  workshop 
engineers  and  2 administrative 
staff.  Revenues  are  forecast  at 
£1.1  million  (approximately 
$1.75  million)  for  1990,  of  which 
about  90%  has  been  inherited 
from  the  parent  company. 

Rental  Research.  Laserforce 
claims  to  have  established 
agreements  with  a number  of 
OEMs  and  VARs  and  to  be 
already  supporting  over  one 
thousand  users  throughout  the 
U.K.  Exhibit  G lists  some  of  the 
products  that  can  be  serviced  by 
Laserforce.  Preferred  products 
are  manufacturers'  products 
that  fit  within  current  capabili- 
ties, and  alternative  products  are 


Currently,  the  company  is 
focusing  its  business  activities 
towards  the  servicing  of  me- 
dium-speed laser  printers  in  the 
range  of  15-50  pages  per  minute. 
In  the  future,  however, 
Laserforce  plans  to  include  the 
servicing  of  high-speed  laser 
printers  in  the  range  of  90-125 
pages  per  minute  and,  where 
necessary,  those  that  fit  within 
the  PC  range. 

Laserforce  is  forecasting  a 
growth  rate  that  will  almost 
double  its  revenues  in  1991  to 
about  £2  million  (approximately 
$3.2  million).  This  revenue 
growth  is  to  be  achieved  by 
expanding  the  range  of  custom- 
ers outside  the  base  that  was 


Conlinued  on  next  page 


August  1990 


© 1990  by  INPUT.  Reproduction  pfohibited. 


INPUT 


Service  Update 


10 


Exhibit  G 


Laserforce  Product  Directory 


• Preferred  Products 

- Canon 

- Rental  Research 

- Epson 

- Dataproducts 

- Hewlett-Packard 

- Fujitsu 

- Kyocera 

- Mannesmann  Tally 

- Ricoh 

-3M 

- IBM 

- Toshiba 

• Alternative  Products 

- Apollo 

- Sony 

- Apple 

- Tandy 

- Centronics 

- Triumph  Adler 

- Data  General 

- Unisys 

- Decision  Data 

- Zenith 

-ICL 

- Apricot 

- Nokia 

- Compaq 

-OKI 

- Commodore 

- Datapoint 

- Facit 

-Bull 

-NEC 

- Siemens 

- Tulip 

- DEC 

- Genicom 

- Kienzie 

- Memorex 

- NCR 

- Olivetti 

- Philips 

- Sun 

- T I (Omnilaser) 

- Wang 

Laserforce.  . .from  page  9 

inherited  from  the  parent 
company. 

Working  mainly  with  OEMs  and 
VARs,  Laserforce  offers  on-site 
contractual  services  that  can  be 
customised  to  match  specific 
customer  needs.  Call  placement 
can  be  either  via  the  OEM/VAR 
response  centre  or  direct  from 
the  user.  A repair  centre  pro- 
vides a "retum-to-base"  service, 
should  this  be  required. 

Based  on  INPUT  definitions,  the 
revenue  stream  of  Laserforce  is 
categorised  as  fourth-party 
maintenance  revenue,  as  the 
source  is  primarily  non-end 
user. 

In  the  press  release  issued  at  the 
time  Laserforce  was  launched. 
Chairman  John  Knight  predicted 
a growing  requirement  for 
specialist  maintenance  services, 
particularly  in  the  area  of  me- 
dium- and  high-speed  laser 
printers.  "In  the  United  States 
we  have  witnessed  strong 
competition  to  the  larger  TPMs 
(independent  maintenance 
companies  - INPUT)  from  the 
major  manufacturers'  forming 
strategic  alliances  with  specialist 
maintainers.  There  are  already 
signs  that  a similar  pattern  is 
developing  in  the  U.K." 

Data  published  in  a 1989  INPUT 
report,  Fourth-Party  Maintenance 
Opportunities  In  Western  Europe 
1989  to  1994,  indicated  that  the 
U.K.  market  for  fourth-party 
maintenance  services  was  the 
most  developed  in  Western 
Europe.  Growth  of  fourth  party 
maintenance  services  in  the  U.K. 
was  forecast  at  about  25%  over 
the  period  1989  to  1994.  ■ 


INPUT 


© 1990  by  INPUT.  Reproduction  prohibited. 


August  1990 


11 


Snippets 


<♦  Fastback,  the  British  Petroleum  Intema- 
tional-owned  disaster  recovery  operation, 
has  been  sold  to  Datasolve,  part  of  Thom 
EMI.  The  company  is  locat^  in 
Peterborough  and  has  IBM  3080  and  4300 
processors,  and  has  now  upgraded  to  IBM 
3090  380J  mainframes. 

❖ GECO,  the  seismic  survey  subsidiary  of  the 
Schlumberger  oil  group,  has  ended  a ser- 
vice agreement  with  its  main  supplier, 
Amdahl.  It  now  intends  to  train  its  own 
staff  to  look  after  a 5870  mainframe  and 
other  Digital  and  Sun  equipment. 

❖ Kode  Computers  Ltd  is  relaunching  as  a 
service  company,  focusing  on  maintenance, 
project  management,  data  recovery,  sys- 
tems integration,  rental  and  leasing  and 
training.  Kode  forecasts  that  around  30%  of 
its  revenues  will  come  from  service  activi- 
ties other  than  maintenance  by  the  end  of 
the  year. 

❖ Granada  Computer  Services  Inc.  in  the 
United  States  has  acquired  a privately  held 
California  maintenance  company.  React 
Corp.  React  has  95  employees  and  gener- 
ated around  $10  million  in  maintenance 
revenues  last  year. 


❖ Twisted  Pair  Technology  Ltd  (TPT)  is  a new 
London-based  company  entering  the  market 
for  structured  cabling.  It  offers  planning, 
development  and  installation  of  cable  sys- 
tems. TPT  will  market  its  products  and 
services  directly  and  through  value-added 
resellers. 

❖ Office  Automation  Services,  a subsidiary  of 
Olivetti  Systems  and  Networks,  has  bought 
the  assets  of  Oakley  Computers  Ltd.  Oakley 
Computers  is  a third-party  maintenance 
company  and  had  a turnover  of  $5.2  million 
in  1989.  The  activities  of  Oakley  Computers 
were  previously  directed  towards  the  Wang 
market. 

❖ ICL  has  opened  a new  distribution  centre  at 
its  Stevenage  site.  It  claims  that  its  despatch 
cycle  has  been  reduced  from  nine  days  to 
three  days  and  has  saved  on  operating  costs. 


August  1990 


© 1990  by  INPUT.  Reproduaion  prohibited. 


INPUT 


About  INPUT 


INPUT  provides  planning  information,  analysis,  and  recommendations 
to  managers  and  executives  in  the  information  processing  industries. 
Through  market  research,  technology  forecasting,  and  competitive 
analysis,  INPUT  supports  client  management  in  making  informed 
decisions. 


Continuous-information  advisory  services,  proprietary  research/ 
consulting,  merger/ acquisition  assistance,  and  multiclient  studies  are 
provided  to  users  and  vendors  of  information  systems  and  services 
(software,  processing  services,  turnkey  systems,  systems  integration, 
professional  services,  communications,  systems /software 
maintenance  and  support). 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior 
management  positions  in  operations,  marketing,  or  planning.  This 
expertise  enables  INPUT  to  supply  practical  solutions  to  complex 
business  problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a 
leading  international  research  and  consulting  firm.  Clients  include  more 
than  100  of  the  world's  largest  and  most  technically  advanced 
companies. 


INPUT  OFFICES 


North  America 


San  Francisco 

1280  Villa  Street 

Mountain  View,  CA  94041-1194 

Tel.  (415)  961-3300 

Fax  (415)  961-3966 

New  York 

959  Route  46  East,  Suite  201 
Parsippany,  NJ  07054 
Tel  (201)299-6999 
Fax  (201)  263-8341 

Washington,  D.C. 

1953  Gallows  Road,  Suite  560 
Vienna,  V A 22182 
Tel.  (703)  847-6870 
Fax  (703)  847-6872 


International 

London 

Piccadilly  House 

33/37  Regent  Street 

London  SWIY  4NF,  England 

Tel.  (44)  (71)  493-9335  Fax  (44)  (71)  629-0179 

Paris 

52,  boulevard  de  Sebastopol 
75003  Paris,  France 

Tel.  (33-1)  42  77  42  77  Fax  (33-1)  42  77  85  82 

Frankfurt 
Sudetenstrasse  9 
D-6306  Langgons-Niederkleen 
West  Germany 

Tel.  (0)  6447-7229  Fax  (0)  6447-7327 
Tokyo 

Saida  Building 
4-6,  Kanda  Sakuma-cho 
Chiyoda-ku,  Tokyo  101,  Japan 
Tel.  (03)  864-0531  Fax  (03)  864-4114 


Route: 


INPUT 


Service 

Update 


© INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — international 

September  1990 


IN 

1 ... 

...ICL  Technical  Services  (ICTS) — An  Environmental  Services  Supplier 

THIS 

7... 

...News  from  the  U.S.A. 

ISSUE: 

9... 

...Questions  from  the  U.S.A. 

10... 

...Getronics  Continues  Internal  Growth  and  Makes  a New  Acquisition 

11  ... 

...Snippets 

ICL  Technical  Services  (ICTS) — 

An  Environmental  Services  Supplier 


Background 

Intenrational  Computers 
Limited  (ICL)  is  the  largest 
computer  equipment  manufac- 
turer in  Britain,  best  known  for 
its  desktop  office  computer 
equipment  and  mainframes. 
ICL's  results  for  1989  showed 
revenues  of  £1.6  billion  ($2.5 
billion)  and  profits  of  £140 
million  ($220  million)  up  from 
£1.36  billion  ($2.15  billion)  and 
£128.8  million  ($101  million) 
respectively  in  1988.  ICL 
Technical  Services  (ICTS), 
organised  under  the  Customer 
Services  Division,  provides  key 
support  to  ICL's  client  base  by 
setting  up  the  necessary  infra- 
1 structure  for  the  installation  of 
ICL  equipment.  ICTS'  activities 
currently  generate  10%  of  the 
customer  services  division's 


revenue  which,  in  INPUT'S 
estimate,  is  approaching  £250 
million  ($400  million)  in  the  U.K. 
and  it  reports  a growth  of  over 
20%  per  annum. 

Exhibit  A illustrates  ICTS'  role 
within  the  ICL  customer  services 
structure. 

Initially  set  up  over  8 years  ago 
to  service  ICL's  customers,  ICTS 
is  rapidly  establishing  a name  in 
its  own  right  by  winning  con- 
tracts outside  of  ICL's  client 
base. 

Recent  announcements  indicat- 
ing an  agreement  for  Fujitsu  to 
acquire  an  80%  share  in  ICL  are 
likely  to  result  in  long-term 
changes  in  the  activities  of  ICL. 
The  impact  of  this  acquisition 
remains  a subject  for  future 


discussion,  however;  for  the 
purpose  of  this  discussion, 
INPUT  considers  that  it  should 
not  affect  ICTS'  day-to-day 
activities  in  the  short  term. 

ICTS  has  its  headquarters  in 
Stevenage,  Hertfordshire  and 
twelve  regional  offices  in  the 
U.K.  Its  resources  include  a 
permanent  staff  of  60  and  over 
150  experts  and  consultants  who 
provide  a range  of  infomTation 
technology-related 
environmental  services. 

ICTS's  development  of  its  own 
market  reflects  its  mission 
statement: 

"To  be  the  preferred  supplier  to 
ICL's  clients  of  building  and 

Continued  on  next  page 


SIM 


Service  Update 


2 


environmental  services  while 
providing  targeted  levels  of 
revenue  growth  and  profit  from 
ICL  and  non  ICL  customers." 

IC^TS’s  Services 

ICTS  manages,  on  behalf  of  its 
clients,  every  stage  of  the  site 
preparation  for  IT  installations. 
These  processes  range  from 


initial  planning  permission, 
construction  and  installation  of 
data  networks  to  environmental 
control,  space  planning  and 
security.  The  result  of  this 
comprehensive  service  is  the 
hand-over  of  a completely 
validated  computer  environ- 
ment. Exhibit  B lists  ICTS'  range 
of  services. 

ICTS  estimates  that  its  activities 
are  equally  divided  between 
networking,  structured  wiring 


t 

(Northern  Telecom's  Integrated 
Building  Network — IBDN) 
packaging  and  other  services 
such  as  power  generation,  UPS 
(uninterruptible  power  supplies) 
and  environmental  control. 

ICTS  has  announced  that  its 
structured  wiring  operation, 
officially  launch^  in  April  1990, 
represents  20%  of  its  total 
business  and  is  its  fastest  grow- 
ing service.  Exhibit  C shows  the 
analysis  of  ICTS'  business 
activities. 


Exhibit  A 


ICL  Customer  Service  Division 


c 


INPUT 


© 1990  by  INPUT.  Reproduction  prohibited. 


September  1990 


ICTS’s  Market 


3 


At  the  present  time,  ICTS's 
market  closely  mirrors  the 
pattern  of  ICL's  installed  base. 
The  majority  of  its  contracts  are 
for  defence  and  government, 
and  the  balance  is  spread  be- 
tween the  banking,  retail  and 
manufacturing  sectors.  Exhibit 
D shows  an  analysis  of  ICTS' 
client  base. 

Relationship  with 
Clients 

ICTS  prides  itself  on  providing 
an  integrated  service.  This 
means  that  it  must  manage  a 
multidisciplinary  team  of  archi- 
tects, quantity  surveyors, 
structural  engineers,  civil  engi- 
neers, mechanical  and  electrical 
engineers,  plumbers,  etc.,  while 
ensuring  that  the  environment 
meets  the  client's  business, 
logical  and  technical  needs  as 
well  as  budget.  To  that  end 
ICTS  describes  the  entities 
involved  in  each  project  as  "a 
team  of  partners."  Exhibit  E is  a 
diagram  of  the  ICTS-client- 
supplier  relationship. 

ICTS  estimates  that  for  each 
computer  installation,  an 
amount  equivalent  to  10%  of  the 
value  of  the  computer  equip- 
ment will  be  spent  on 
environmental  services.  Total 
installations  can  result  in  consid- 
erable investments.  For 
example,  installing  communica- 
tion cabling  in  a three-story 
building  can  cost  upward  of 
£500,000  ($795,000).  ICTS 
therefore  recommends  that 
clients  go  through  the  following 
12  steps  when  specifying  an 
installation: 


Exhibit  B 

ICL 

ICTS  Range  of  Services 

ICTS  can  design,  supply  and  install  the  following 
services: 

• Air  conditioning 

• Electrical  installations 

• Communications  and  data  cabling 

• Environmental  control  and  building  management 
systems 

• UPS  and  generator  sets 

• Construction  and  building 

• Modular  floors  and  suspended  ceilings 

• Space  planning  and  office  furniture 

• Fire  detection  and  prevention 

• Security  systems 

• Specialist  cleaning  services 


Exhibit  C 

ICTS'  Business  Activities 


Activities 

Percent 

Local-Area  Networks  (LANs) 

30 

Structured  wiring  (ISDN) 

20 

Packages 

30 

Services  (power  generation, 

20 

UPS,  etc.) 

September  1990 


© 1990  by  INPUT.  Reproduction  prohibited. 


Continued  on  next  page 

INPUT 


Service  Update 


4 


ICL.  . .from  page  3 


1)  Inception  - The  client  estab- 
lishes the  basic  requirements 
for  the  installation,  e.g., 
budgets,  deadlines,  etc. 


4)  Scheme  design  - The  fulfill- 
ment of  the  brief  is 
completed.  Specifications 
and  required  services  are  all 
integrated.  The  client  is  sent 
a report  for  feedback. 


Exhibit  D 

ICL — ICTS's  Client  Base  Analysis 


2)  Feasibility  - The  brief  is 
developed.  Alternative 
methods  are  considered.  The 
project's  feasibility  is  as- 
sessed in  terms  of  finance, 
functionality,  etc. 


5)  Detailed  design  - Costs  are 
drawn  up  and  all  component 
parts  are  specified.  Client 
approval  is  obtained  for  the 
detail  and  the  costs  incurred. 

6)  Production  information  - 
Specifications  are  drawn  up, 
as  are  schedules  and  work- 
ing drawings.  The  method 
of  carrying  out  the  project  is 
agreed  upon. 

7)  Bills  of  quantities  - Bills  oi 
quantities  are  prepared. 
Arrangements  for  getting 
tenders  are  finalised. 

8)  Tender  action  - Tendering 
procedures  are  begun  and  a 
suitable  tender  is  chosen. 

9)  Project  planning  - The  con- 
tractor is  provided  with 
necessary  information  to 
plan  the  job.  All  roles  are 
defined.  The  site  is  prepared 
for  work. 

10)  Operation  on  site  - Quality 
and  progress  are  monitored. 


" ...quality  is  the  key  driver  of 
ICTS's  operation." 


3)  Outline  of  proposals  - The 
design  is  drafted,  the  con- 
struction methodology  is 
assessed,  layouts  are  drawn 
up,  and  a plan  of  costs  is 
established. 


Controls  are  implemented  to 
ensure  fulfillment  of  obliga- 
tion, and  regular  progress 
meetings  are  held  with  the 
client. 


INPUT 


© 1990  by  INPUT.  Reproduction  prohibited. 


September  1990 


Service  Update 


11)  Completion  - The  completed 
project  is  handed  over. 
Problems  are  rectified  and  a 
final  certificate  is  issued. 

12)  Feedback  - The  design  of  the 
building  and  how  it  copes 
with  its  role  is  analysed 
based  on  the  client's 
experience. 

ICTS  stresses  that  "Quality  is  the 
key  driver  of  (its)  operation."  It 


September  1990 


is  BS  5750  accredited,  which 
means  that  it  conforms  to  the 
ISO  9000  standards  of  quality, 
and  requires  all  its  suppliers  and 
associates  to  apply  these 
standards. 

The  Future: 

EXie  to  legislative  changes  and 
the  increasing  trend  for 
companies  to  look  outside  their 


e 1990  by  INPUT.  ReproduOion  prohibiled. 


organisation  for  specialist 
services  such  as  relocation 
assistance  and  environmental 
consultancy,  ICTS  sees  major 
opportunities  in  the  1990s  in  the 
following  areas: 

• Management  of  change 

ICTS  sees  a need  for  the 
creation  of  ergonomically 
sound  environments  allowing 

Continued  on  next  page 

INPUT 


Service  Update 


6 


maximum  efficiency  from  IT 
investments. 

IT  represents  a dynamic  part 
of  the  office  design.  For 
companies  to  be  able  to 
implement  their  future 
strategies,  "tomorrow's  IT 


"...  tomorrow's  IT  requirements 
must  be  able  to  be  added 
to  today's  office  environment." 


retenanted  every  two  years; 
people  move  within  the 
building  every  8 months;  and 
every  5 years  there  is  likely  to 
be  a major  refurbishment. 
ICTS  believes  that  incorporat- 
ing expansion  capability  at 
the  design  stage  of  a building 
allows  for  much  greater 
flexibility  and  means  that 
changes  are  easier  to  manage. 

• The  creation  of  "intelligent 
buildings" 

ICTS  foresees  that  by  1993, 
50%  of  all  buildings  will  have 
to  be  "intelligent."  This 
means  that  the  IT  impact  on 
power  requirements,  office 
space,  lighting  and  cooling 
must  be  understood.  IT  now 
plays  a fundamental  role  in 
building  design  and  thinking. 
Architects  will  have  to  be 
aware  of  the  flexibility  re- 
quirements of  their  clients 
and  allow  easy  expansion. 
ICTS  considers  itself  well 
positioned  to  meet  these 
challenges.  Intelligent  build- 
ings have  a single  network 
enabling  all  IT  to  be  con- 
trolled by  one  building 


require- 
ments must 
be  able  to  be 
added  to 
today's 
office 
environ- 
ment." 
Typically,  a 
building  is 


ICL  . .from  page  5 


management  system.  Light- 
ing, heating,  temperature 
control,  energy  consumption, 
and  access  to  buildings  can 
all  be  controlled  by 
management. 

• Structured  wiring  (IBDN) 

Northern  Telecom's 
Integrated  Building 
Distribution  Network  (IBDN) 
is  an  in-building  communica- 
tion wiring  and  connecting 
system  that  networks  a 
variety  of  existing  and  future 
communications  equipment. 
These  networks  are  designed 
to  address  current  and  future 
integrated  voice  data  (IVD), 
LAN,  image  transmission  and 
connectivity  needs. 

Businesses  are  using  increasing 
amounts  of  IT.  This  creates 
more  demands  for  cable  and 
wire  space.  Structured  wiring 
systems  are  starting  to  be 
"...considered  as  a 4th  utility, 
alongside  gas,  water  and 
electricity." 

ICTS’  chosen  market  segments 
are  a mixture  of  large  building 
package  systems  and  extensive 
speech  and  data  cabling  under- 
takings. In  order  to  address  the 
growth  of  Open  Systems  and  the 
implications  of  increased  con- 
nectivity, together  with  its 
impact  on  office/building 
environments,  ICTS  sees  the 
need  and  has  the  capability  and 
resources  to  provide  the  truly 
multi-disciplined  approach 
required.  ICTS'  future  growth 
plans  involve  breaking  away 
from  its  classic  ICL  business 
profile  and  firmly  establishing 
itself  in  the  design  and 
building  construction 
management  arena.  ■ 


INPUT 


© 1990  by  INPUT.  Reproduction  prohibited. 


September  1990 


7 


Wang  Laboratories,  the  troubled  office 
automation  equipment  manufacturer 
secured  its  largest  order  ever  in  August. 

The  company  has  won  a five-year  contact  to 
supply  computer  systems  and  services  valued  at 
$841.3  million,  to  the  U.S.  Department  of  State. 
The  contract  covers  the  provision  of  office 
automation  and  distributed  information 
processing  computer  systems  for  the 
Department  of  State,  the  U.S.  Agency  for 
International  Development,  the  U.S.  Information 
Agency,  the  Foreign  Agricultural  Service  of  the 
U.S.  Department  of  Agriculture  and  the  Foreign 
Commercial  Service  of  the  US  Department  of 
Commerce. 

Wang's  stock  price  rose  from  $3  3/8  to  $4  1/4 
when  news  of  the  order  came  out.  This  is 
welcome  news  for  a company  which  has  recently 
announced  significant  reductions  in  headcount. 

IBM  Announces 
Auto-Ma 

IBM  recently  announced  the  availability  of 
Automatic  Maintenance  Authorization, 
providing  customers  with  the  automatic  addition 


of  future  equipment  to  their  IBM  Maintenance 
Agreement.  Customers  signing  on  for  this  option 
will  have  all  future  equipment  purchased 
automatically  added  to  the  maintenance 
agreement  when  the  warranty  expires,  with  no 
interruption  in  service  coverage.  As  an  added 
feature,  customers  may  designate  the  specific 
equipment  types  and/ or  locations  that  they  want 
the  AUTO-MA  option  to  cover. 

IBM  Introduces  New  Support 
Service 

IBM  expanded  its  software  support  service  in  the 
U.S.  on  August  23d  with  the  launch  of 
FastService,  a facility  designed  to  enable  large 
systems  customers  to  automate  trouble-shooting 
and  problem  resolution  in  their  software 
applications.  FastService  uses  proprietary 
software  to  assist  and  notify  customers  of 
problems  in  application  software  and  to  propose 
solutions.  IBM  believes  that  in  certain  cases 
FastService  can  shorten  the  time  taken  to  detect 
and  correct  applications  problems  by  40%.  The 
new  service  will  be  available  in  the  first  quarter  of 
1991  and  will  support  users  of  COBOL,  Pl/1  or 
Assembler  applications  under  MVS/XA  or  MVS/ 
ESA. 


September  1990 


© 1990  by  INPUT.  Reproduction  prohibited. 


Continued  on  next  page 

INPUT 


8 


hJcZVS . . .from  page  7 


Hewlett-Packard  Announces 
Strategy  Changes  in  Engineering 
Software  Division 

Palo  Alto,  California,  August  31, 1990.  Hewlett- 
Packard  Company,  the  international 
manufacturer  of  computation  and  measurement 
products,  announced  a change  in  strategy  within 
its  Engineering  Applications  Group — to  focus 
software  development  on  the  mechanical 
engineering  and  data  management  markets  and 
phase  out  HP's  proprietary  electronic  design 
automation  software. 

The  Mechanical  Design  Division  (MDD),  which 
creates  application  programmes  for  mechanical 
CAD  and  product  information  management,  will 
operate  as  an  independent  software  division, 
effective  immediately.  It  will  have  a dedicated 
sales  force  and  will  be  free  to  make  its  products 
available  on  any  hardware.  The  division's 
software  is  available  today  in  Intel  386-  and  486- 
based  computers  and  uses  the  MS-EX3S  operating 
system  in  addition  to  the  HP  workstation  family. 

The  Electronic  Design  Division  (EDD),  following 
a new  release  of  EDA  software  planned  for  the 
fall  of  1990,  'vill  undergo  a two-year  transition 
away  from  eveloping  its  proprietary  EDA 
software  in  favour  of  strengthening  relationships 
with  third-party  companies. 

This  enhancement  is  designed  to  improve 
customers'  productivity  by  providing  added 
capabilities  and  increased  compliance  with 


industry  standards  such  as  the  X-window  System 
and  Electronic  Design  Interchange  Format. 

HP  also  said  it  will  continue  supporting  the  CAD 
framework  initiative,  a committee  of 
workstations  and  EDA  vendors  and  users  whose 
charter  is  to  define  standards  that  will  help  EDA 
users  integrate  a variety  of  suppliers'  products 
into  their  design  systems. 

The  EDD  products  will  continue  to  be  available 
during  the  transition  period  and  will  be 
supported  by  HP  for  5 years  thereafter.  In 
addition,  the  changes  in  EAG  have  no  effect  on 
HP's  microwave  design  and  CASE  products. 

During  the  phase-out,  there  will  be  gradual 
changes  in  employment  levels  at  the  165-person 
EDD  facility,  which  is  based  in  Fort  Collins  and 
has  operations  in  Colorado  Springs,  CO.  As  the 
transition  continues,  employees  will  receive 
company  assistance  in  finding  jobs  elsewhere  in 
HP. 

HP  said  today's  announcement  reflects  the 
momentum  of  the  open  systems  movement.  In 
addition,  the  changes  within  EAG  allow  the 
company  to  compete  more  effectively  in  the 
workstation  and  mechanical  CAD  market. 

MDD,  based  in  Boeblingen,  West  Germany,  with 
operations  in  Fort  Collins,  CO  will  continue 
focussing  on  ME-CAD  and  product  information 
management  software.  ■ 


INPUT 


C 1990  by  INPUT.  Reproduction  prohibited. 


September  1990 


Service  Update 


Q;  How  many  "hot  sites"  does  Sundata 
Disaster  Recovery  Service  have  at  this 
time  and  what  are  the  capabilities  of 
each? 

A:  Sundata  currently  has  three  hot  sites 
located  in  King  of  Prussia  (PA),  Atlanta 
(GA),  and  Irvine  (CA).  Each  site  is 
equipped  with  a System/36,  System/38, 
and  AS/400  up  to  a B70.  There  are  also 
three  mobile  data  centres  at  the  same  hot 
site  locations. 

Sundata  recently  reviewed  23  different 
pacicages  for  planning,  using  cost,  flex- 
ibility, and  midrange  system  capabilities 
as  their  criteria.  Recovery  Pak  II  was 
chosen  as  the  most  cost  justifiable  and  has 
been  marketed  for  approximately  six 
months. 

Q;  What  is  the  "48-hour  Express 

Maintenance"  service  available  on  the 
IBM  PS/1? 

A:  With  the  48-hour  Express  service,  the 
customer  calls  an  800  number  to  discuss 
problems  with  the  equipment  over  the 


phone.  If  replacement  parts  are  required, 
they  are  sent  out  by  courier  to  arrive  within 
48  hours  of  the  call.  The  system  comes  with  a 
one-year  warranty  and  is  geared  to  the 
customer  market. 

Q:  IS  "HEAT",  a PC-based  help  desk  product 
jointly  developed  by  the  Help  Desk  Institute 
and  Bendata  Management  Systems,  directly 
interfaceable  to  a host?  Is  it  compatible  with 
a Token  Ring  network? 

A:  HEAT  connects  directly  to  Newman, 

Infoman,  and  PNMS,  and  is  priced  according 
to  the  number  of  workstations  connected  to 
the  help  desk.  HEAT  is  compatible  with 
Token  Ring  NET  BIOS. 

Q:  What  is  WANG's  replacement  policy  in  the 
event  of  disaster? 

A:  WANG  has  a service  in  which  for  1 % of  list 
price  per  year,  in  case  of  disaster  it  will  send 
out  a temporary  replacement,  configured 
exactly  like  the  damaged  equipment.  The 
temporary  equipment  will  arrive  within  24 
hours,  with  the  permanent  replacement 
arriving  within  48  hours. 


September  1990 


© 1990  by  INPUT.  Reprodudion  prohibited. 


INPUT 


Service  Update 


10 


( 


Getronics  Continues  Internal  Growth  and 
Makes  a New  Acquisition 


Exhibit  F 

Getronics  NV  Half-Year  Results 
1990 


Year 

6 Months 

Ended  June  30 

Year  Ended 
December  31 
1989 

($  Millions) 

1990 

($  Millions) 

1989 

($  Millions) 

Sales 

180.62 

153.5 

334.1 

Operating  Profit 

17.3 

14.6 

31.8 

Net  Profit  (1) 

12.2 

9.9 

22.5 

Getronics  NV,  the  software 
services  company  based  in 
Amsterdam,  reports  that  rev- 
enue grew  by  18%  in  1989  and 
net  profits  grew  by  23%  to  Dfl 
21.8  million  ($12.25  million)  in 
the  first  six  months  of  1990. 
Exhibit  F shows  comparative 
half-year  financial  results  for 
1989  and  1990. 

These  results  in  the  Netherlands 
and  in  other  countries  can  be 
totally  attributed  to  organic 
growth. 

The  largest  contribution  to  the 
improved  financial  performance 
was  made  by  the  Maintenance 
and  Installations  sector.  Electric 
Engineering,  the  Telematics 
installation  company  of  the 
Getronics  Group,  showed 
progress  and  was  boosted  by 
market  growth. 

Datex,  in  spite  of  the  loss  of 
large  training  contracts,  man- 
age to  maintain  its  position 
over  the  last  year. 

Diode  in  the  Netherlands  and 
Belgium  performed  below 
expectation  as  a consequence  of 
the  difficult  market  for  active 
and  passive  components.  The 
Diode  companies  in  Spain  and 
Portugal  achieved  good  results. 

The  companies  Geveke 
Electronics  and  XTEC  expanded 
in  the  areas  of  PC  integration 
within  network  configurations. 
The  LAN  group  of  Geveke 
Electronics  managed  to  secure  a 
number  of  large  contracts 
which,  Getronics  predicts,  wall 


increase  the  Group  results  for 
the  remainder  of  1990. 

Another  event  that,  in  INPUT'S 
opinion,  will  contribute  to 
Getronics'  future  results  is  the 
proposed  acquisition  of 
Synergie,  the  information 
technology  consultancy 
company. 

Getronics  announced  on  August 
24th,  1990  that  the  management 
of  both  companies  had  reached 
agreement  on  the  terms  of  the 
take-over  of  all  outstanding 
shares  in  Synergie  Holding  BV 
by  Getronics  NV. 

Synergie  has  branch  offices  in 
Amsterdam,  The  Hague  and 
Brussels,  and  according  to 
Getronics  it  ranks  among  the 
largest  specialised  consultancies 
in  the  IT  industry.  Synergie's 


staff  of  100  consultants 
specialises  in  information 
auditing,  information 
organisation  and  software 
consultancy  for  medium  and 
large  organisations. 

Getronics  hopes  this  acquisition 
will  allow  it  to  broaden  its 
activities  in  the  software  ser- 
vices and  consultancy  sectors. 
Existing  Getronics  companies  in 
these  sectors  are  Datex  (500 
employees)  and  Bruggeling 
Automatisering. 

Grouped  within  Getronics,  these 
companies  expect  to  able  to 
meet  the  growing  demand  for 
larger  and  more  complex  infor- 
mation structures  more  easily; 
consequently  Synergie  will 
contribute  to  the  growth  of  I 

Getronics  NV  in  1990.  ■ 


INPUT 


September  1990 


e 1990  by  INPUT.  Roprodudlon  prohIbKed. 


Snippets 


❖ BULL  HN  Information  Systems  Ltd  in  the 
U.K.,  has  been  awarded  a £9.6  million  ($15.2 
million)  contract  to  computerise  administra- 
tion at  42  Royal  Air  Force  stations  over  the 
next  two  years.  The  contract  includes  £7.4 
million  ($11.7  million)  for  42  DPS  6000 
minicomputers  and  £2,2  million  ($3.5 
million)  for  1,700  terminals  and  printers. 

❖ CITIZEN  WATCH  CO.  has  established  a 
West  German  subsidiary — Citizen 
Computer  Peripherals  GmbH  in  Neufahm, 
Bavaria.  The  new  company  will  market  its 
low-end  printers,  floppy  disk  drives  and 
liquid  crystal  diode  displays  starting  next 
month. 

BIS,  the  British  software  house  owned  by 
Nynex,  will  spend  £10  million  on  a stake  in 
its  rival,  Hamburg  based  GMO.  This  will 
make  BIS  the  first  British  software  house  to 
have  a significant  presence  in  Germany.  BIS 
will  acquire  an  initial  32%  of  GMO  and 
wants  to  acquire  a substantial  majority 
shareholding  within  the  next  three  years. 

❖ IBM  is  once  again  reorganizing  and  divest- 
ing itself  of  portions  of  its  business  that  do 
not  match  its  strategic  objective.  It  has 
recently  agreed  to  sell  certain  portions  of 
the  National  Service  Division  (NSD),  in- 
cluding ATM  service  agreements  and  parts, 
to  Diebold.  IBM  also  announced  the  forma- 
tion of  a wholly  owned  subsidiary 
consolidation  its  typev/riter,  keyboard, 
intermediate  and  personal  printer  and 
supplies  business. 


❖ KODE  International  returned  to  profit  in  the 
first  half  of  1990.  Turnover  fell  from  £15.87 
million  ($25.2  million)  to  £9.16  million  ($14.5 
million)  as  a result  of  disposals  made  in  1989, 
but  there  was  a pre-tax  profit  of  £381,000 
($605,000)  against  a loss  of  £227,000 
($360300)  in  the  corresponding  6-month 
period  in  1989.  After  selling  its  distribution 
business,  Kode  has  concentrated  on  a range 
of  professional  services  including  mainte- 
nance, engineering  support  and  training. 
Directors  forecast  that  it  will  still  take  longer 
for  Kode  to  produce  the  level  of  return  it  is 
capable  of. 

❖ Specialist  Computer  Centres  (SCC),  the 
Birmingham-based  IBM  agent,  has  acquired 
Asystel  UK  from  the  administrative  receivers. 
Asystel  UK  was  established  4 years  ago  as  an 
IBM  systems  centre.  Although  its  turnover 
reached  £23  million  ($36.5  million)  it  never 
showed  any  profits  and  went  into  deeper 
trouble  when  the  French  parent  Asystel  SA 
experienced  financial  difficulties  in  1989  and 
withdrew  support.  Asystel  Spartex,  the 
dealership  subsidiary,  will  assume  the 
Specialist  Computer  name,  and  Wordability, 
the  training  subsidiary,  will  be  known  as 
Specialist  Computer  Education  (SCE). 


September  1990 


© 1990  by  INPUT.  Reprodudion  pfohibiled. 


INPUT 


About  INPUT  I 

( 

INPUT  provides  planning  information,  analysis,  and  recommendations 
to  managers  and  executives  in  the  information  processing  industries. 
Through  market  research,  technology  forecasting,  and  competitive 
analysis,  INPUT  supports  client  management  in  making  informed 
decisions. 


Continuous-information  advisory  services,  proprietary  research/ 
consulting,  merger /acquisition  assistance,  and  multiclient  studies  are 
provided  to  users  and  vendors  of  information  systems  and  services 
(software,  processing  services,  turnkey  systems,  systems  integration, 
professional  services,  communications,  systems /software 
maintenance  and  support). 


Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior 
management  positions  in  operations,  marketing,  or  planning.  This 
expertise  enables  INPUT  to  supply  practical  solutions  to  complex 
businc<:s  problems. 


Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a 
leading  international  research  and  consulting  firm.  Clients  include  more 
than  100  of  the  world's  largest  and  most  technically  advanced 
companies. 


INPUT  OFFICES 


i 


North  America 

San  Francisco 

1280  Villa  Street 

Mountain  View,  CA  94041-1194 

Tel.  (415)  961-3300 

Fax  (415)  961-3966 

New  York 

959  Route  46  East,  Suite  201 
Parsippany,  NJ  07054 
Tel.  (201)  299-6999 
Fax  (201)  263-8341 

Washington,  D.C. 

1953  Gallows  Road,  Suite  560 
Vienna,  VA  22182 
Tel.  (703)  847-6870 
Fax  (703)  847-6872 


International 

London 

Piccadilly  House 

33/37  Regent  Street 

London  SWIY  4NF,  England 

Tel.  (44)  (71)  493-9335  Fax  (44)  (71)  629-0179 

Paris 

52,  boulevard  de  Sebastopol 
75003  Paris,  France 

Tel.  (33-1)  42  77  42  77  Fax  (33-1)  42  77  85  82 

Frankfurt 
Sudetenstrasse  9 
D-6306  Langgons-Niederkleen 
West  Germany 

Tel.  (0)  6447-7229  Fax  (0)  6447-7327 
Tokyo 

Saida  Building 
4-6,  Kanda  Sakuma-cho 
Chiyoda-ku,  Tokyo  101,  Japan 
Tel.  (03)  864-0531  Fax  (03)  864-41 1 4 


Route: 


INPUT 

Service 

Update 


© INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — International 

October  1990 


CONCEPT — A Growing  Service  Company 


ROUP  CONCEPT  was 
founded  in  1971  by  Olivier 
Spire,  Sydney  Bendahan  and 
Michel  Lavigne.  Between  1985 
and  1989  its  revenues  have 
increased  over  a hundredfold, 
from  FF  21  million  ($4  million) 
to  FF  2.3  billion  ($437  million), 
which  places  it  in  third  position 
among  what  it  describes  as 
'computer  services  groups'  in 
France.  Its  areas  of  activity  are: 
software  services,  professional 
services,  including  consulting 
services,  processing  services, 
turnkey  systems  and 
independent  maintenance. 
Exhibits  A and  B provide  an 
analysis  of  GROUP  CONCEPT'S 


revenues.  GROUP  CONCEPT 
has  four  distinct  companies 
within  its  structure:  CCMC, 
Technic  Informatique,  SCE  and 
SCBF.  Exhibit  C illustrates 
GROUP  CONCEPT'S  company 
structure. 

Interest  in  CONCEPT  for  INPUT 
Customer  Service  Programme 
clients  mainly  relates  to 
CONCEPT'S  independent 
maintenance  activities  through 
the  acquisition  of  Spectral  and 
MIS  in  France.  However,  as 
CONCEPT  approaches  being 
able  to  provide  total  solution 
services,  an  overall  profile  of  the 


company  should  be  of  general 
interest. 

CCMC 

The  company  (with  1989 
revenues  of  $223  million)  is 
quoted  on  the  "Marche  a 
Reglement  Mensuel"  on  the 
Lyon  Stock  Exchange.  CCMS 
has  five  divisions: 

Data  Systems  - This  division 
performs  processing  services, 
payroll  management  and 
accounting  functions  for  the 
accounting  profession  and  its 
clients.  These  services  are 


Continued  on  next  page 


Service  Update 


CONCE PT. . .from  page  1 


Exhibit  A 


GROUP  CONCEPT  Revenues,  1989-1990 


1988 
($  M) 

1989 
($  M) 

Growth 

(Percent) 

Revenue 

from 

Acquisitions 
($  M) 

Real 

Growth 

(Percent) 

CCMC 

199.6 

223.0 

11.7 

11.1 

6 

Technic  Informatique  (1) 

23.1 

133.0 

474.0 

97.9^^^ 

50 

SCE 

18.9 

30.5 

61.8 

.8 

58 

SCBF 

50.0 

70.4 

41.0 

8.4 

24 

Other 

3.6 

6.6 

84.0 

2.3 

21 

GROUP  CONCEPT 

307.3 

433.3 

41.0 

88.0 

13 

(1)  Including  Spectral  MIS 

444.0 

262.0 

30.9 

13 

(2)  Including  Spectral  MIS  for  $45.1  M and  CIS  $29.8  M (Intra  Group) 
Currency  conversion  by  INPUT  ($1  = 5.27  FF) 


Exhibit  B 

Analysis  of  Concept  Revenues  by  Delivery  Mode 


. Delivery 
s^Mode 
Company^V. 

Software 
Products 
($  M) 

Professional 
Services 
($  M) 

Turnkey 
Systems 
($  M) 

Processing 
Services 
($  M) 

Independent 
Maintenance 
($  M) 

Office 
Automation 
($  M) 

Other 
{$  M) 

Totals 
($  M) 

CCMC 

33.8 

3.8 

36.2 

98.7 

38.9 

1.7 

213.1 

Technic  (1) 
Informatique 

6.1 

19.7 

47.4 

44.4 

117.6 

SCE 

19.3 

5.1 

4.4 

28.8 

SCBF 

28.5 

9.5 

4.4 

42.4 

Other 

1.5 

4.7 

6.2 

Total 

87.7 

39.6 

92.4 

98.7 

44.4 

38.9 

6.4 

408.1 

Percent 

20.0 

9.1 

21.0 

29.2 

10.2 

9.0 

1.5 

100.0 

Currency  conversion  by  INPUT  ($1  = 5.27  FF) 


INPUT 


© 1990  by  INPUT.  Reproduction  prohibited. 


October  1990 


Service  Update 
3 


Exhibit  C 


Organisation  Chart — 1989 


70%* 


Central  Services 


Strategy 
Management 
Human  resources 
R & D 

Communications 

Marketing 

Purchasing 


57% 


100% 


Processing  of 
systems  for 
accounting 

Human  resources 
development 


Technic 
Informatique 

- Professional 
services 

- Turnkey  systems 

- Systems 
architecture 

- Maintenance 


100% 


Software  and 
turnkey  systems 
for  finance, 
accounting  and 
management 


- For  banks  and 
capital  market 

- Processing 


Other 

1.1% 


Independent 
maintenance  of 
computer 
equipment  and 
EFTPOS 


Currency  conversion  by 
INPUT  ($1  =5.27  FF) 

* Percentage  ownership 


CCMC 
$231  M 


Share  of  revenues  by  each 
group  company  (excluding 
intracompany  sales)  $ millions 


October  1990 


© 1990  by  INPUT,  fleproduclion  prohibited. 


Conlinued  on  next  page 

INPUT 


Service  Update 
4 


CONCEPT.  . .from  page  3 

performed  from  three  computer 
centres  in  Lyon,  Orleans  and 
Nancy.  Data  Systems  also 
develops  new  processing 
software  for  other  GROUP 
companies  and  provides 
consultancy  in  facilities 
management  and  banking 
applications. 

Management  Systems  - This 
division  provides  turnkey 
systems  running  on  mini  and 
microcomputers  to  accountants 
and  SMEs  (small  and  medium 
enterprises).  It  also  markets 
software  products  for  horizontal 
(accounting,  sales  management 
etc.)  and  vertical  (by  activity 
sector)  markets. 

Human  Resources  - This  division 
provides  human  resource 
management  and  payroll 
computer  systems  to  accounting 
firms,  SMEs  and  larger 
companies. 

Training  - This  division,  which 
will  be  split  off  from  CCMC  to 
operate  as  an  independent  unit 
in  1990,  is  designed  to  provide 
continuing  education  services  in 
management  and  accounting. 

SACI  - This  company  is  quoted 
on  the  "Second  Marche"  of  the 
Lyon  Stock  Exchange.  Its  main 
activities  are  printing,  graphic 
arts  and  distribution  of  FC/ 
office  automation  supplies. 


Technic  Informatique 
(Tl) 

TI,  with  1989  revenues  of  $133 
million,  is  quoted  on  the 
"Second  Marche"of  the  Paris 
Stock  Exchange.  Its  client  base 
is  mainly  large  companies  in  all 
bui^iicss  activities.  TI  provides 
professional  services 
(conception,  support  and 
implementation  of  industrial 
management  systems)  and 
turnkey  systems  running  on 
IBM  AS/400,  Digital  and  micro 
networks.  It  is  involved  in 
complex  systems  architecture 
projects.  TI  controls  Spectral 
MIS,  the  third-party 
maintenance  company  formed 
in  1989  as  a result  of  the  merger 
of  Spectral  and  MIS. 

SCE 

SCE,  with  1989  revenues  of 
$30.5,  offers  consultancy 
services  specifically  to  large 
groups  of  companies.  SCE 
develops  integrated  software 
products  and  turnkey  systems  to 
manage  treasury,  accounting 
and  financial  reporting 
functions. 

SCBF 

SCBF,  with  1989  revenues  of 
$70.4  million,  provides  services 
to  banks  and  financial 
institutions  in  three  areas: 


• Systems  to  manage  capital 
market  activities,  risk 
management,  portfolio 
management  and  interlink 
with  compensation  systems. 

• Turnkey  systems  for  the 
management  of  banking 
activities  and  dealing  rooms. 

• Processing  services  for  EFT 
and  facilities  management 
(also  called  systems 
operations  by  INPUT). 

Human  Resources 

Personnel  increased  by  63% 
from  2,270  to  3,707  in  1989.  This 
was  due  both  to  new 
acquisitions  and  intensive 
recruitment.  365  new  positions 
were  created  over  the  last  year. 
GROUP  CONCEPT'S  social 
policies  rest  on  maintaining  the 
cultural  environment  of  its 
acquisitions.  It  believes  in  staff 
option  schemes  and  profit 
participation  as  well  as 
continuing  education  and 
internal  communication. 

Exhibits  D and  E provide  figures 
of  staff  growth  and  productivity 
figures. 


INPUT 


e 1990  by  INPUT.  Reproduction  prohibited. 


October  1990 


Service  Update 


1989  Productivity  Figures  for  Concept 


Revenues  per 
Employee 
($  K) 

Added  Value 
per  Employee 
{$  K) 

CCMC 

139.3 

69.1 

Technic  Informatique  (1) 

136.1 

68.5 

SCE 

124.7 

95.4 

SCBF 

158.8 

104.9 

GROUP  CONCEPT 

127.5 

72.1 

Spectral  MIS  (1) 
included  since  1989 

93.0 

54.8 

Exhibit  E 

Staff  Growth  Figures 
1988-1990 


FYE 

1988 

FYE 

1989 

Professionals 

(Percent) 

Increase 

New 

Positions 

1989 

1989 

Average 

Staff 

CCMC 

1,407 

1,628 

54 

221 

18 

1,600 

Technic  Informatique 

108 

1,087(1) 

46 

919 

170 

980 

SCE 

225 

290 

68 

65 

80 

245 

SCBF 

338 

538 

75 

200 

110 

443 

Other 

33 

60 

79 

27 

5 

45 

Head  Office 

99 

104 

82 

5 

12 

105 

GROUP  CONCEPT 

2,270 

3,707 

57 

1,437 

365 

341 

(1)  Including  Spectral 
MIS 

503 

9 

338 

29 

48 

October  1990 


e 1990  by  INPUT.  Raprodudion  prohibited. 


Continued  on  next  poge 

INPUT 


Service  Update 


6 

C ON CEPT..  .from  page  5 

GROUP  CONCEPT 
Client  Base 

Through  diversifying  its  services 
and  developing  business 
throughout  Europe,  GROUP 
CONCEPT  has  acquired  a client 
base  of  4,000  large  companies, 
500  banks,  5,000  accounting 
firms  and  250,000  SMEs.  It 
claims  to  have  a 5%  share  of  the 
French  computer  services 
market.  Exhibit  F provides  an 
analysis  of  GROUP  CONCEPT'S 
client  base. 

Geographic  Coverage 

CONCEPT  has  offices  in  70 
cities  in  France  and  in  eight 


countries  in  Europe;  Belgium, 
Germany,  the  Netherlands, 

Italy,  Portugal,  Spain, 
Switzerland  and  the  U.K. 
Revenues  outside  France 
represent  13.1%  of  the  total,  or 
$57  million.  Italy  represents  the 
largest  portion  of  these 
revenues,  at  over  $48  million. 
Exhibit  G provides  an  analysis 
of  non-French  revenues. 

Growth  Strategy  for 
1990 

GROUP  concept's  revenues 
grew  by  41  % between  1988  and 
1989.  Thirty-five  percent  of  the 
growth  in  revenues  was  due  to 
merger  and  acquisition  activity, 
and  the  internal  growth  was  6%, 
The  internal  growth  is  mainly 
due  to  a shift  from  processing 


Exhibit  F 


GROUP  CONCEPT  Client  Base 


services  for  the  accounting 
profession,  which  decreased  by 
17%  in  1989,  to  providing 
independent  systems,  which 
increased  by  37%  within  CCMC. 
CONCEPT  predicts  that  growth 
in  revenues  for  1990  will  exceed 
$570  million.  This  forecast  is 
based  on  continuing  internal 
growth  of  20%  and  CONCEPT'S 
forecasted  acquisition 
programme.  See  Exhibit  H for 
1990  forecast  figures. 

GROUP  CONCEPT  sees  two 
main  changes  occurring 
regarding  achievement  of  its 
objectives: 

• The  following  activities  from 
CCMC  will  branch  off  into 
independent  subsidiaries: 
processing  services, 
independent  systems,  pay- 
roll and  personnel 
management.  These  will  all 
be  set  up  as  independent 
business  units. 

• The  branching  off  of  some  of 
CONCEPT  SA's  activities  and 
the  merger  of  Group  SCE, 
CONCEPT  Conseil  and 
Technic  Infomiatique  to  cater 
specifically  for  the  needs  of 
large  companies. 

GROUP  CONCEPT  believes 
that  its  success  is  mainly  due  to 
structural  consolidation  and 
good  management  of  its 
acquisitions  since  1987.  GROUP 
CONCEPT  makes  available  to 
every  newly  formed  or  acquired 
company  its  internally 
generated  language  for  software 
development  called  SDL, 
claiming  that  SDL  ensures  an 


INPUT 


© 1990  by  INPUT.  Reproduction  prohibited. 


October  1990 


Exhibit  G 


GROUP  CONCEPT  Revenue  Analysis  by  Geographic  Area 
(Excluding  Intercompany  Sales  and  France) 

($  Millions) 


% 

Portugal 

Spain 

Italy 

Germany 

Belgium 

I'Jetherlands 

U.K. 

Total 

CCMC 

0 

Technic 

Informatique 

9.0 

0.95 

2.66 

1.52 

5.13 

SCE 

12.7 

0.95 

0.7o 

4.36 

1.14 

7.21 

SCBF 

78.3 

0.57 

44.02 

44.59 

Total 

100.0 

0.95 

1.33 

48.38 

0.95 

1.14 

2.66 

1.52 

56.93 

Percent 

1.7 

2.3 

85.0 

1.7 

2.0 

4.6 

2.7 

Currency  conversion  by  INPUT  ($1  = 5.27  FF) 


GROUP  CONCEPT  Forecast 
1990 


Revenue 

Growth 
from  1989 
(Percent) 

Net 

Profit 

Profit 

(Percent) 

Group  CCMC 

247 

10 

15.0 

6.1 

Group  Technic 
Informatique  (1) 

159 

20 

9.5 

6.0 

Group  SCE 

40 

30 

2.6 

6.2 

Group  SCBF 

95 

35 

7.6 

8.0 

GROUP  CONCEPT 

541 

20 

34.7 

6.5 

(1)  Including  Spectral 
MIS 

153 

17 

5.1 

9.5 

Currency  conversion  by  INPUT  ($1  = 5.27  FF) 


October  1990 


e 1990  by  INPUT.  Reproduction  prohibited. 


CorUinued  on  next  page 

INPUT 


Service  Update 
8 


C ON CEPT..  .from  page  7 

exceptional  level  of  productivity 
and  reliability  in  the 
development  and  evolution  of 
software  products.  The 
flexibility  and  portability  of  SDL 
allows  the  group  to  maintain 
technological  independence  and 
gives  it  a competitive  advantage 
in  the  rapidly  changing  financial 
environment  which 
characterises  its  client  base. 

Spectral  MIS 

Background 

Spectral  MIS  is  the  third-party 
maintenance  company  now 
operating  under  Technic 
Informatique  (1989  revenue: 

$133  million).  It  was  formed 
following  the  acquisition  of 


Spectral  and  MIS  in  early  1989 
and  is  the  result  of  the  merger  of 
these  two  companies.  The 
company  is  quoted  on  the 
"Second  Marche"  of  the  Paris 
Stock  Exchange  and  had 
revenues  of  $44.4  million  in 
1989.  It  has  a total  staff  of  485. 
Exhibit  I provides  details  on 
Spectral  MIS'  structure. 

Spectral  MIS  owns  Aramis,  a 
bench  repair  workshop  with  20 
employees;  TMIS,  an 
independent  maintenance 
company  specialising  in 
servicing  IBM  computers,  which 
has  16  employees;  and  MMC, 
which  has  eight  employees. 

Sales  Organisation  and  Clients 

Spectral  MIS  sells  its  services 
through  a dedicated  sales  force 
and  its  VARs,  backed  up  by  a 


direct  mail  programme  and  a 
telesales  team. 

Spectral  MIS  niaintains 
approximately  70%  of  CCMC's 
PC  installed  base.  It  has  a client 
base  of  12,000  and  estimates  that 
80%  of  its  revenues  and  profit 
before  taxes  are  derived  from  1 / 
1000th  of  its  clients. 

Product  Offering 

Spectral  MIS  offers  its 
maintenance  services  in  three 
formats: 

MAE  (Maintenance  Forfetaire 
Annuelle),  which  is  the 
traditional  one-year 
maintenance  contract. 


INPUT 


O 1990  by  INPUT.  Reproduction  prohibited. 


October  1990 


Service  Update 


CRP  (Contrat  a Risque 
ParticiparliO,  in  which  the  client 
shares  the  liability  and  owns 
stock  and  spare  parts. 

MSG  (Maintenance  Specifique 
Globale),  a contract  designed 
for  companies  with  large  sites  or 
installed  bases. 

The  company  is  organised  into 
13  service  areas,  with  60 
maintenance  centres  staffed  by 
220  people  (field  service  and 
bench  repair  personnel).  Its 
standard  service  hours  are  from 
8AM  to  6PM  Monday  to  Friday, 
with  Saturday  optional.  Each 
customer  is  given  access  to  a 
national  phone  number  or  ''hot- 
line" service,  which  is  manned 
by  20  people. 

Its  pricing  structure  is  as 
follows:  For  'S-hour'  response 
contracts  (1  day),  the  client  pays 
100%  of  the  hourly  rate.  If  the 
contract  requires  a two-day 
response  time,  the  fee  is  reduced 
to  85%  of  the  hourly  rate;  for  a 4- 
hour  response  contract,  the  fee  is 
130%  of  the  hourly  rate.  If  the 
equipment  is  still  under 
warranty,  the  fees  charged  are 
40%  of  these  rates. 

Services  offered  by  Spectral  MIS 
include: 

• Data  backup  services 

• Disaster  recovery 

• Training 

• Cabling 

• Network  installation 

• Management  and  planning 

• Independent  maintenance 


Although  CONCEPT  has  the 
capability  to  provide  total 
solution  service.  Spectral  MIS 
believes  that  the  "Total  Service 
Solution"  (professional  services, 
software  services  and 
maintenance)  is  not  yet  a user 
requirement.  Although  it  is  an 
advantage  for  a company  to  be 
able  to  offer  a range  of  services 
but  Spectral  MIS  does  not 
systematically  offer  CONCEPT 
services  to  each  of  its 
prospective  clients. 

Analysis  of  Revenues 

Eighty  percent  of  Spectral  MIS's 
1989  revenues  were  derived 
from  external  maintenance 
contracts,  with  55%  of  revenues 
derived  from  servicing  PCs. 
Exhibits  J and  K provide  an 
analysis  of  Spectral  MIS's 
revenues. 


9 

Growth  Strategy 

Spectral  MIS  forecast  1990 
revenues  of  $57  million,  a 25% 
increase  over  1989.  It  plans  to 
grow  mainly  internally.  Its 
objective  is  to  enhance  the  range 
of  products  serviced  by  shifting 
emphasis  from  mainly  EFT/P(3S 
and  PCs  to  PCs,  minicomputers 
and  large  systenis.  It  believes 
that  future  growth  is  based  on: 

1)  Servicing  larger  systeii’is 

2)  Providing  quality  service 

3)  Concentrating  on  high 
technology  business 

According  to  Spectral  MIS,  there 
is  no  significant  future  growth 
in  small,  easy-to-maintain 
equipment. 


Exhibit  J 


Spectral  MIS  Analysis  of  Revenues 
by  Equipment  Type 


Equipment 

Revenue 
($  M) 

Percent 

PCs 

24.4 

55 

Minis 

15.5 

35 

Others 

4.5 

10 

Total 

44.4 

100 

Currency  conversion  by  INPUT  ($1=  5.27  FF) 


Continued  on  next  page 


October  1990 


© 1990  by  INPUT.  ReproduOion  prohibHed. 


INPUT 


Service  Update 


10 

CONCEPT.  .from  page  9 


In  an  interview  with  INPUT 
earlier  this  year,  Mr.  Villeminot 
shared  his  ideas  on  the  future  of 
independent  maintenance 
companies. 

According  to  Mr.  ViUeminot,  the 
main  issue  for  independent 
maintenance  companies  is  the 
quality  of  the  service  provided. 
They  need  high-performance, 
efficient  tools  to  insure  high 


quality.  There  is  airrently  a 
price  war  going  on  and  there  is  a 
great  need  for  RiSiD  in  order  to 
achieve  the  highest  level  of 
quality  at  the  lowest  cost  so  that 
clients  will  not  be  tempted  to 
return  to  manufacturers  for 
maintenance  services. 

Mr.  Villeminot  adds  that  in 
order  to  maintain  their  viability, 
independent  maintenance 
companies  have  to  reach  a 
critical  size.  They  need  to  be 
large  enough  to  justify  the 
necessary  investment  from  their 
controlling  groups.  Mr. 
Villeminot  believes  that  there 
will  be  significant  merger  and 
acquisition  activity  in  the  future. 

At  the  time  of  going  to  press, 
INPUT  received 
communications  from  GROUP 
CONCEPT  that  it  had  divested 
from  SACI  (previously  part  of 
CCMC)  and  SCBF.  These 
divestitures  are  part  of  a group 
restructure  which  will  affect  the 
forecast  figures  in  Exhibit  H. 
Further  details  will  be  given  in 
the  November  issue  once 
INPUT  will  have  received 
CONCEPT'S  updated  figures.  ■ 


Exhibit  K 


Spectral  MIS  Analysis  of 
Revenue  by  Service  Type 


Service 

Revenue 
{$  M) 

Percent 

Maintenance 

35.5 

80 

Other 

8.9 

20 

(bench, cabling, etc.) 

Total 

44.4 

100 

Currency  conversion  by  INPUT  ($1=  5.27  FF) 


INPUT 


C 1990  by  INPUT.  Reproduction  prohibited. 


October  1990 


Service  Update 


11 

HelpDesk — Providing  Support  to 
PC  Users 


HelpDesk  is  a U.K.  company 
formed  about  18  months 
ago  with  the  objective  of 
providing  support  to  PC  users. 
The  company  is  staffed  by  eight 
consultants  who  had  each  been 
providing  support  to  users  for 
over  eight  years  in  a variety  of 
companies  and  job  roles  prior  to 
forming  HelpDesk.  Between 
them,  the  eight  consultants 
claim  to  have  over  30  years  of 
user  support  experience. 

In  addition  to  providing  support 
to  PC  users,  at  present  on 
standard  PC  applications,  the 
company  has  also  developed  its 
own  sophisticated  call  logging 
system. 

HelpDesk  claims  a high  degree 
of  uniqueness  in  the  service 
market  and  lists  the  following 
factors  as  contributing  to  this 
uniqueness.  HelpDesk: 

• Does  not  sell  product 

• Does  not  maintain  hardware 

• Provides  only  support 

• Will  help  a user  to  restructure 
an  ailing  in-house  help  desk 

• Offers  user  training  on  help 
desk  implementation, 
operation  and  management 

• Uses  a sophisticated  call 
logging  system 


• Will  provide  second-line 
support  if  required 

Currently,  company  revenue  is 
between  £500,000  and  £1  million 
($0.9  million  - $1.8  million — they 
would  not  be  more  precise). 
Growth  is  currently  very  high 
and  likely  to  continue  at  about 
70%  per  annum  in  the  short 
term.  However,  long-term 
growth  is  planned  at  around 
25%  per  annum. 

Currently  HelpDesk  provides 
support  on  about  35  standard 
PC  applications,  which  include 
most  of  the  popular  packages 
(Lotus,  Dbase,  etc.).  Support  is 
also  available  on  DOS  and  OS/2 
operating  systems. 


The  company  claims  that 
success  to  date  has  been  due  to 
the  ability  and  experience  of  the 
staff  and  its  reputation  for 
providing  quality  service.  Alan 
Howard,  the  Managing  Director 
of  HelpDesk,  said: 

"Users  measure  performance  by 
the  quality  of  support  provided. 
Response  time  is  the  key." 

PC  support  services  available 
are  listed  in  Exhibit  L.  In 
providing  this  list  of  services, 
HelpDesk  claims  that  a major 
strength  of  the  company  is  that 
its  service  capability  addresses 
an  inadequacy  in  the  level  of 
support  provided  by  dealers 
and  software  houses  that 
operate  through  a dealer 
network. 


Exhibit  L 

HelpDesk 

PC  Software  Support  Services 

• Help  desk  consultancy 

• Remote  software  support 

• Problem  tracking  software 

• Measurable  service 


Continued  on  next  page 


October  1990 


INPUT 


Service  Update 
12 


Exhibit  M 

HelpDesk 
Support  Tools 

• Syntax+ 

-Call  logging  and  tracking  system 
-User  reports 
-Technical  information 


H€lp1D6SlC...from  page  11 

Interesting  Future 
Developments 

In  terms  of  future  growth  and 
development  of  the  company, 
HelpDesk  is  investigating  a 
number  of  potential 
opportunities. 

• HelpDesk  is  looking  to 
provide  links,  via 
independent  maintenance 
companies,  to  a systems 
operations  (facilities 
management)  service.  They 
recently  polled  nineteen 
companies  and  had  a 100% 
positive  response,  with  five 
or  six  of  these  being  taken  a 
stage  further. 

• HelpDesk  is  joining  forces 
with  the  Northumberland 
Water  Authority  and  Ernst  & 
Young  to  provide  one-day 
seminars.  The  programme 
for  these  seminars  includes 
support  issues,  cultures, 
procedures  and  the 
requirements  definition  for 
support  software. 

• HelpDesk  is  looking  at  the 
possibility  of  providing 
network  support  for  products 
such  as  3Com,  Novell  and 
other  industry  standards  such 
as  Ethernet  and  Token  Ring. 

• HelpDesk  is  considering 
extending  support  services  to 
include  virtually  all  systems 
and  equipment  platforms 


where  standard  applications 
software  packages  are  used. 

• HelpDesk  is  also  focussing  its 
call  logging  system  on  AS/ 
400,  Digital  VAX  equipment 
and  intends  to  provide 
support  on  those  platforms. 

• HelpDesk  plans  to  provide 
support  for  UNIX-based 
systems. 

The  call  logging  system  devel- 
oped by  HelpDesk  is  called 
Syntax+,  and  although  this  is 
primarily  intended  for  in-house 
use,  the  company  is  prepared  to 
negotiate  sales  with  interested 
parties.  Syntax  is  exclusively  a 
support  system,  but  HelpDesk  is 
considering  adding  a field 
service  management  module  at 
some  future  date. 


In  an  interview  with  INPUT, 
Alan  Howard  of  HelpDesk 
explained  that: 

• The  primary  focus  of 
HelpDesk  is  problem  solving. 

• A secondary  focus  is 
development  of  Syntax. 

HelpDesk  can  be  contacted  at 
the  following  address: 

HelpDesk  Ltd. 

51  Castle  Street 
Cirencester 
Gloucestershire 
GL7  IQD 

The  United  Kingdom 
Telephone:  (44)  285-641286  ■ 


INPUT 


© 1990  by  INPUT.  Reproduction  prohibited. 


October  1990 


Service  Update 


13 


FRS  Acquires  Premier  Computer 
Corporation 

On  October  2 1990,  FRS  of  Sacramento, 
California  announced  the  acquisition  of  Premier 
Computer  Corporation.  As  a result  of  this 
acquisition  FRS  now  claims  to  be  the  largest 
independent  repair  depot  in  the  U.S.  (By 
INPUT  definitions,  both  companies  are  fourth- 
party  maintenance). 

FRS  commented  that  this  most  recent 
acquisition,  along  with  its  recent  acquisition  of 
the  Priam  V-100  capability  from  Sequel,  is 
another  step  in  its  efforts  to  expand  offerings  to 
customers  and  strengthen  the  company's 
already  strong  position  in  the  continually 
growing  computer  repair  market. 

Premier,  which  has  approximately  150 
employees,  will  continue  to  operate.  By 
combining  Premier's  capabilities  with  those  of 
FRS,  FRS  claims  to  provide  the  broadest  product 
offering  by  a single  repair  vendor  in  the  USA. 

In  the  release  issued  at  the  time  of  the 
acquisition,  FRS  claimed  that  it  was  recognised 
two  years  running  as  one  of  the  fastest  growing 
businesses  in  the  Sacramento  area.  With 
revenues  for  FRS  up  47%  in  1989,  the  company's 


workforce  increased  from  120  to  160  employees 
and  an  additional  16,000  square  feet  of 
production  space  was  gained.  The  addition  of 
Premier  adds  approximately  150  employees  and 
42,500  square  feet. 

FRS  also  claims  that  by  emphasising  a quality- 
driven,  flexible  operation  with  an 
uncompromising  quality  control  programme, 
that  it  leads  the  market  in  the  USA  for  customer 
service.  FRS  repairs  more  than  2,000  computer 
peripherals  a month,  including  hard  and  floppy 
disks,  laser  printers  and  tape  drives.  The 
addition  of  Premier  will  nearly  double  this 
capacity. 

FRS  is  making  plans  to  expand  into  Europe  by 
1992,  when  the  European  Community  will 
become  a single  economic  market  of  more  than 
300  million  people.  Many  of  FRS'  customers  in 
the  USA  already  have  overseas  operations  to 
which  such  services  can  be  expanded.  FRS 
clients  include  Apple,  Microscience,  Hewlett- 
Packard,  Canon  USA  and  Texas  Instruments. 

Through  the  addition  of  Premier's  customer 
base,  which  has  been  focused  on  dealers,  VAl^ 
and  self  maintainers,  FRS  clainis  to  have  the 
largest  base  of  customers  among  all  repair 
depots  in  the  USA.  ■ 


October  1990 


© 1990  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 

14 


Questions  and 
Answers  from 
the  U.S.  Hotiine 


Question:  What  is  the  relationship  between 
Contel,  Telos  and  Eaton? 

Answer:  In  third  quarter  1988,  Contel 
completed  the  acquisition  of  Eaton's  Information 
Management  Systems  and  Data  Systems 
Services  divisions.  In  August  1990,  Contel 
announced  that  its  Federal  Systems  Sector  had  a 
definitive  agreement  to  acquire  Telos 
Corporation.  Telos,  a Santa  Monica  software 
developer,  specialises  in  ADA  programming  and 
consulting  to  space  and  defense  programs,  with 
some  business  in  the  commercial  sector. 

Question:  What  discounts  do  manufacturers 
supply  to  dealers  if  maintenance  is  passed  back 
to  the  manufacturer  and  not  done  by  the  dealer? 

Answer:  Unisys  offers  two  types  of  programs  to 
dealers.  If  the  dealer  refers  a lead  to  Unisys  for 
maintenance,  and  Unisys  writes  a contract,  the 
dealer  receives  a referral  fee  of  25%  of  the  first 
year's  maintenance  contract  price. 


Hewlett-Packard  offers  three  programs  to  its 
dealers  for  maintenance:  the  HP  Support 
Provider  option,  the  HP  Support  Subcontracting 
option,  and  the  HP  Support  Reseller  option. 

The  HP  Support  Provider  offers  assistance, 
parts,  documentation,  and  technical  support 
from  HP  to  the  dealers  to  help  the  dealer 
provide  the  service  support.  Under  the  HP 
Support  Subcontracting  option,  HP  provides  the 
actual  service  through  the  dealer,  allowing  the 
dealer  to  have  complete  account  control.  Under 
the  HP  Support  Reseller  option,  HP  handles  the 
support  and  service  account  control,  with  no 
investment  or  minimum  purchase  by  the  dealer. 

Question:  It  has  been  reported  that  Fujitsu  is  in 
the  process  of  acquiring  ICL.  How  much  truth 
is  there  to  these  reports? 

Answer:  ICL  and  Fujitsu  announced  in  August 
1990  that  Fujitsu  would  acquire  an  80%  stake  in 
ICL  from  STC.  ■ 


INPUT 


e 1990  by  INPUT.  Reprodudion  prohibited. 


October  1990 


Service  Update 
15 

Snippets 


❖ P-E  International  has  introduced  a service 
organisation  which  confers  BS5750-type 
standards  for  marketing  services.  It  is  called 
Marketing  Quality  Assurance  (MQA).  This  is 
the  first  company  of  its  type  in  the  marketing 
field.  MQA  is  the  result  of  a co-operative 
arrangement  between  the  British  Standards 
Association  and  P-E  International.  Companies 
which  successfully  pass  the  specification 
requirements  will  be  allowed  to  display  the 
MQA  logo  as  proof  of  their  meeting  the 
standard  of  quality  for  providing  marketing, 
sales  and  customer  services.  After  accredita- 
tion, a company  will  be  visited  every  6 months 
to  see  that  it  maintains  the  standards.  In  the 
event  that  it  does  not,  MQA  may  withdraw 
the  company's  right  to  use  the  MQA  logo. 

❖ The  Ministry  of  Defence  has  reinforced  its 
single-source  maintenance  policy  by  issuing 
tenders  from  two  of  its  largest  sites.  The 
Atomic  Weapons  Establishment  and  the 
Directorate  General  Supply  and  Transport 
(Naval)  have  put  out  separate  tenders  for 
single-source  maintenance.  Under  the  single- 
source maintenance,  the  supplier  with  the 
winning  bid  will  service  all  the  equipment 
under  a single  maintenance  contract.  The 
Directorate's  equipment  includes  ICL  2900 
mainframes  and  systems  from  McDonnell 
Douglas,  Ferranti  and  Bull.  Presently  this 
equipment  is  maintained  either  by  the  manu- 
facturer or  by  independent  maintenance 
companies.  The  MoD  said  that  before  it  intro- 
duced single  maintenance  at  the  end  of  1987,  it 
was  spending  about  £7.5  million  at  15  sites  for 
maintenance  contracts. 

❖ Systems  Reliability  has  sold  its  computer 
dealer  subsidiary.  Corporate  Computers,  for 
£13  million  to  VRG  Group,  the  Dutch  office 
equipment  supplier.  This  move  is  part  of  a 
decision  on  the  part  of  Systems  Reliability  to 
concentrate  its  activities  on  mainframe 
services,  software  and  maintenance. 


❖ Another  name  change  is  about  to  occur.  As  of 
October  1,  in  the  USA  the  merged  companies  of 
Siemens  and  Nixdorf  will  become  Siemens- 
Nixdorf  Information  Systems. 

❖ Siemens  will  have  91  % of  the  votes  and  78%  of 
the  capital  of  the  Siemens-Nixdorf  firm  which 
merg^  as  of  1 October,  1990. 

*>  Hewlett-Packard  has  launched  HP  Hardware 
Support  Service,  which  includes  on-site  main- 
tenance for  all  its  hardware  products,  and  HP 
Apollo  Support  Service,  which  brings  Apollo 
products  under  the  HP  service  banner.  Ac- 
cording to  HP,  this  offers  the  customer  flexibil- 
ity to  choose  the  coverage  that  meets  his  needs 
and  eliminates  the  distinction  between  service 
programmes  for  PCs. 

❖ Ferrari  Technical  Services  introduced  two  new 
services  in  August  1990:  a nonstop  mainte- 
nance service  and  a new  disaster  recovery 
service. 

❖ IBM  UK  notified  customers  in  August  that  all 
its  prices  were  going  up.  This  announcement 
follows  a 5%  price  increase  for  hardware  in 
March  1990.  Hardware  prices  are  rising  by 
another  5%,  making  an  overall  price  increase  of 
10.25%  for  the  year.  Software,  maintenance, 
engineering  and  education  are  also  going  up. 
Maintenance  on  all  items — apart  from  4381  and 
308X  mainframes — is  going  up  8%  as  of  Janu- 
ary 1 1991,  and  maintenance  on  all  AS/400 
processors  will  rise  by  15%.  On  the  software 
side,  IBM  announced  that  licences  would  be 
billed  quarterly,  in  advance.  Education  course 
fees  will  go  up  10%. 

❖ In  the  U.S.,  3Com  has  extended  the  three  year 
warranties  on  its  Etherlink  adapter  product 
line  to  limited  lifetime  policies.  The  policies 
apply  to  equipment  sold  by  original  equipment 
manufacturers,  VARs,  company  dealers  and 
distributors.  3Com  officials  claim  that 
Etherlink  adapters  average  70  years  between 
failures.  ■ 


October  1990 


e 1990  by  INPUT.  Reproduction  prohibited. 


INPUT 


INPUT  provides  planning  information,  analysis,  and  recommendations 
to  managers  and  executives  in  the  information  processing  industries. 
Through  market  research,  technology  forecasting,  and  competitive 
analysis,  INPUT  supports  client  management  in  making  informed 
decisions. 


Continuous-information  advisory  services,  proprietary  research/ 
consulting,  merger /acquisition  assistance,  and  multiclient  studies  are 
providef"*  to  users  and  vendors  of  information  systems  and  services 
(software,  processing  services,  turnkey  systems,  systems  integration, 
professional  services,  communications,  systems/software 
maintenance  and  support). 


Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior 
management  positions  in  operations,  marketing,  or  planning.  This 
expertise  enables  INPUT  to  supply  practical  solutions  to  complex 
business  problems. 


Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a 
leading  international  research  and  consulting  firm.  Clients  include  more 
than  100  of  the  world's  largest  and  most  technically  advanced 
companies. 


INPUT  OFFICES 


North  America 


San  Francisco 

1280  Villa  Street 

Mountain  View,  CA  94041-1194 

Tel.  (415)  961-3300 

Fax  (415)  961-3966 


New  York 

959  Route  46  East,  Suite  201 
Parsippany,  NJ  07054 
Tel.  (201)  299-6999 
Fax  (201)  263-8341 


Washington,  D.C. 

1953  Gallows  Road,  560 
Vienna,  VA  22182 
Tel.  (703)  847-6870 
Fax  (703)  847-6872 


International 


London 

Piccadilly  House 

33/37  Regent  Street 

London  SWIY  4NF,  England 

Tel.  (44)  (71)  493-9335  Fax  (44)  (71)  629-0179 


Paris 

52,  boulevard  de  Sebastopol 
75003  Paris,  France 

Tel.  (33-1 ) 42  77  42  77  Fax  (33-1 ) 42  77  85  82 


Frankfurt 

Sudetenstrasse  9 

D-6306  Langgbns-Niederkleen 

Germany 

Tel.  (0)  6447-7229  Fax  (0)  6447-7327 


Tokyo 

Saida  Building 
4-6,  Kanda  Sakuma-cho 
Chiyoda-ku,  Tokyo  101,  Japan 
Tel.  (03)  864-0531  Fax  (03)  864-41 1 4 


c 


Route: 


INPUT 

Service 

Update 


©INPUT 


A Publication  from  INPUT’S  Customer  Service  Programme — International 

November  1990 


IN  1 "HELP"  Enhanced  Maintenance  Protection  from  EMP 

THIS  7 Hewlett-Packard  Service  Offerings — A Review 

ISSUE:  13  ....Snippets 

14  ....Questions  from  the  U.S. 


Special  Insert  ....Concept  Update 


“HELP!”  Enhanced  Maintenance  Protection 
from  EMP 


HELP!  is  a new  service 

concept,  baclced  by  insur- 
ance, that  was  launched  into  the 
computer  services  market  in 
July  of  this  year  by  EMP  Ltd. 
and  underwritten  at  Lloyds  of 
London.  The  new  value-added 
maintenance  service  product, 
which  is  designed  to  operate  in 
conjunction  with  a maintenance 
contract,  indemnifies  the  service 
provider  against  all  the  costs 
involved  in  returning  a system 
to  its  original  operational  status, 
regardless  of  the  cause.  The 
product  integrates  the  aspects 
normally  offered  by  traditional 
maintenance  and  insurance  and 
provides  the  service  through  a 
response-based  value-added 
maintenance  contract.  By 
considerably  enhancing  and 
extending  the  facilities  offered 
by  the  standard  hardware 


maintenance  contract,  the 
company  believes  that  this 
product  is  able  to  provide  the 
user  with,  in  EMP's  own  words, 
"the  ultimate  peace  of  minJ"! 

However,  far  from  giving 
customer  services  providers  yet 
more  problems  in  the  fomi  of 
another  new  source  of  competi- 
tive pressure,  HELP!  works  in 
partnership  with  the  mainte- 
nance provider's  standard 
service  by  providing  a value- 
added  maintenance  contract  for 
the  end  user  which  also,  EMP 
claims,  significantly  benefits  the 
customer  services  vendor. 

The  Product 

The  letters  EMP  which  form  the 
company's  name  stand  for 
"Enhanced  Maintenance  Protec- 


tion," which  describes  the  key 
concept  behind  HELP!  The 
product  itself  aims  to  give  the 
maintenance  provider  the  ability 
to  offer  customers  a "complete 
recovery-from-disaster  service 
package."  It  replaces  users' 
traditional  insurance  with  a 
response-based  service,  includ- 
ing a replacement  system  when 
required,  from  the  sei'vice 
provider.  The  end  user  will 
always  receive  the  service  and 
the  service  provider  is  indemni- 
fied against  the  costs  involved  in 
providing  those  services.  Ex- 
hibit A lists  the  key  elements  of 
the  package  offered  to  the  users. 

Preventive  and  general  mainte- 
nance services  are  elements  of 
the  package  which  are  provided 
within  the  terms  of  the  existing 

Coruinued  on  next  page 


Service  Update 
2 


Exhibit  A 

HELP!  Provides  'All  Eventuality'  Cover 

Total 

Service 

Package 

Normal  Maintenance  Agreement 

• Preventative  maintenance 

• General  maintenance 

HELP! 

• Breakdown  insurance 

• General  insurance 

Exhibit  B 

Estimated  Level  of  Insurance  Coverage 
for  Computer  Installations  (Percent) 


No  coverage 

43 

Inadequate  coverage 

37 

Correctly  insured 

20 

Source:  EMP  Ltd. 


"HELP! . .from  page  1 

maintenance  agreement  and  do 
not  form  part  of  HELP!,  which  is 
concerned  with  breakdown  and 
general  insurance  provisions. 

Breakdown  insurance  is  of  key 
interest  to  the  maintenance 
provider.  Under  the  terms  of  a 
standard  maintenance  contract, 
the  service  organisation  carries 
the  cost  of  parts  and  labour  used 
in  repairing  failed  equipment. 
The  unpredictable  nature  of 
component  failure  implies  that 
such  costs  must  be  considered 
by  the  provider  as  variable, 
leading  to  difficulties  in  finan- 
cial planning.  The  breakdown 
insurance  element  of  HELP! 
allows  the  servicing 
organisation  to  recover  the  costs 
of  parts,  labour  and  travel 
incurred  in  attending  an  equip- 
ment breakdown  call.  The  cover 
therefore  gives  the  maintenance 
provider  the  option  to  account 
for  the  policy  charge  as  a fixed 
cost,  resulting  in  obvious  im- 
provements in  financial  control. 

The  general  insurance  compo- 
nent of  the  product  is  the  princi- 
pal means  by  which  the  user 
benefits  from  the  policy.  HELP! 
provides  the  servicing 
organisation  with  the  ability  to 
provide  a comprehensive  repair 
and  hardware  replacement 
service  in  response  to  problems 
caused  by  fire,  flood,  theft,  or 
accidental  or  malicious  damage. 
Currently,  users  have  to  include 
cover  for  such  contingencies 
within  their  contents  insurance 
policies.  Exhibit  B summarises 
the  results  of  research  conducted 
by  EMP  into  the  level  of  insur- 
ance taken  out  to  cover 
problems  of  this  nature. 


The  results  of  EMP's  research 
indicate  that  up  to  80%  of 
computer  installations  are,  at 
best,  inadequately  insured.  The 
general  insurance  element  of  the 
product  gives  the  maintenance 
provider  the  opportunity  to 
attack  the  potential  market 
indicated  by  these  figures  with  a 
service  which  significantly 
extends  the  scope  of  the  tradi- 
tional maintenance  contract. 


Exhibit  C lists  the  contingencies 
covered  by  the  general 
insurance  package. 

EMP  claims  that  HELP!  is  the 
most  comprehensive  disaster 
recovery  cover  package  on  the 
market.  By  offering  HELP!,  the 
maintenance  provider  is  able  to 
present  a single  service  package 
to  customers  offering  both 


INPUT 


C 1990  by  INPUT.  Hsproducllcin  protilbUod. 


November  1990 


3 


equipment  maintenance  and 
comprehensive  disaster  insur- 
ance. 

Marketing  the  Product 

Having  defined  the  key  aspects 
of  the  product,  it  is  worth  giving 
some  attention  to  some  of  the 
other  principal  elements  of  the 
marketing  mix  that  have  been 
developed  for  HELP! 

Price  - The  company  maintains 
that  the  cost  of  cover  is  ex- 
tremely competitive  in  relation 
to  comparable  products  offered 
by  standard  insurance  compa- 
nies. Exhibit  D details  the 
pricing  structure  and  current 
costs. 

The  prices  quoted  are  those  paid 
by  the  maintenance  provider  to 
EMP.  It  is  up  to  the  provider  to 
decide  how  much  of  the  pre- 
mium price  to  pass  on  to  the 
customer,  thereby  permitting 
the  utilisation  of  a number  of 
promotional  pricing  policies. 

Target  Systems  - The  company  is 
primarily  aiming  HELP!  at  the 
PC,  mid-range  and  communica- 
tions markets,  in  which  it  in- 
cludes all  equipment  that  will 
physically  function  in  a normal 
office  environment.  Such  a 
definition  includes  laptops  as  an 
agreed  proportion  of  total 
equipment  insured,  but  does  not 
include  any  hardware  for  which 
a controlled  environment  is 
specified  by  the  manufacturer. 
Large  mainframes  and 
supercomputers  would,  typi- 
cally, fall  outside  the  scope  of 
the  product,  but  cover  for  these 
machines  is  currently  being 
developed.  Equipment  operated 
on  a factory  floor  or  in  a ware- 
house environment  would  also 
be  excluded. 


Exhibit  C 

Coverage  Provided  by  the 
General  Insurance  Package 


• Accidental  damage 

• Malicious  damage 

• Loan  equipment/rental  charges 

• Reinstatement  and  data  conversion 

• Equipment  loss  or  damage 

• Immediate  repair  costs 

• Transit  cover 

• Consulting  engineers’  fees 

• Debris  removal/further  damage  protection 

• Automatic  reinstatement  of  sum  insured 

• Automatic  cover  for  replacement  items 


Exhibit  D 

Cover  Costs 


Percent 

Under  £10,000 

4.00 

£10,001  - £25,000 

3.25 

Over  £25,001 

2.50 

Costs  are  based  on  the  replacement  value  of  equipment 
for  the  end  user. 


Sales  Channels  - EMP  Ltd.  will 
only  supply  the  product  to 
maintenance  providers.  It  does 
not  deal  directly  with  end  users 
at  all.  The  easiest  analogy  to 
draw  when  explaining  the 
distribution  mechanism  of  the 
product  is  to  consider  EMP  as 
the  wholesaler  and  the  mainte- 
nance provider  as  the  retailer. 


Maintenance  Contracts  - A key 
condition  of  the  cover  is  that  all 
customers  who  wish  to  take 
advantage  of  HELP!  must  be  in 
possession  of  a valid  mainte- 
nance contract  for  the  equip- 
ment that  they  wish  to  insure. 

Continued  on  next  page 


November  1990 


e 1990  by  INPUT.  Heproducllon  pfohMod. 


INPUT 


Service  Update 


"HELP! . .front  page  3 

Geographic  Coverage  - Currently, 
the  product  is  only  available  in 
the  U.K.  However,  EMP  is 
planning  to  extend  the  geo- 
graphic coverage  of  HELP!  to 
mainland  Europe  very  shortly. 

Benefits  of  Help 

EMP  is  keen  to  stress  that  very 
considerable  benefits  can  be 
derived  from  HELP!  for  both  the 
maintenance  provider  and  the 
user. 

In  the  case  of  the  provider,  the 
advantages  of  operating  with 
HELP!  include,  but  are  not 
confined  to  the  following: 

• Unique  Selling  Proposition. 
The  ability  to  offer  HELP!  to 
their  customers  gives  mainte- 
nance providers  a significant 
unique  selling  proposition 
over  their  conrx  tition.  The 
comprehensive  nature  of  the 
service  offered  by  the  prod- 
uct, coupled  with  the  fact  that 
it  can  only  be  provided  by  the 
servicing  organisation,  can  be 
seen  as  a distinct  competitive 
advantage  in  competing  for 
or  retaining  business. 

• A Promotional  Tool.  HELP! 
offers  the  equipment  mainte- 
nance provider  a promotional 
tool  to  encourage  small 
systems  users  to  take  out 
maintenance  contract  on  their 
equipment.  The  increasing 
tendency  to  regard  PCs,  in 
particular,  as  reliable  com- 
modity products  has  led  to  a 
questioning  of  the  need  for 
fixed-price  maintenance 
contracts.  However,  the 
disposable  nature  of  a com- 


modity product  does  not  alter 
the  fact  that,  for  many  users, 
the  systems  run  on  their 
equipment  are  vitally  impor- 
tant to  the  functioning  of 
their  business.  By  combining 
the  standard  maintenance 
agreement  with  the  facilities 
offered  by  HELP!,  the  mainte- 
nance provider  is  able  to  offer 
a level  of  service  aimed  at 
sep/icing  the  business  as  a 
whole,  rather  than  the  ability 
to  repair,  under  defined 
circumstances,  a piece  of 
equipment  which  increas- 
ingly does  not  go  wrong.  An 
additional  benefit  of  EMP's 
product  to  the  maintenance 
provider  is  that  it  enhances 
thp  chance  of  contract  reten- 
tion at  the  end  of  the  contract 
term. 

• Improved  Financial  Plan- 
ning. The  breakdown  insur- 
ance element  of  the  product 
permits  the  servicing 
organisation  to  treat  the 
charges  of  HELP!  as  a fixed 
cost,  as  opposed  to  having  to 
manage  the  variable  costs  of 
parts  and  labour  inherent  in 
servicing  a breakdown.  The 
improved  financial  planning 
offered  by  HELP!  should  be 
considered  a significant 
benefit. 

• Pricing  Flexibility.  EMP 
stresses  that  the  proportion  of 
the  charge  passed  on  to  the 
user  is  left  entirely  to  the 
discretion  of  the  service 
provider.  It  should  be  noted 
that  the  provider  is  permitted 
to  charge  more  than  the  cost 
to  them.  This  level  of  flexibil- 
ity permits  the  introduction 
of  a range  of  promotional 
pricing  policies,  which  could 


be  utilised  in  marketing  the 
full  service  provided  by  the 
maintenance  vendor. 

Some  of  the  more  obvious 

benefits  to  the  user  are  as 

follows: 

• Security.  The  principal 
benefit  offered  is  the  greatly 
increased  level  of  security 
available  to  users  for  equip- 
ment, software  and  data  and, 
particularly,  the  business 
operation.  In  the  event  of  a 
disaster,  a user  would  be  able 
to  concentrate  more  resources 
on  continuing  to  run  the  core 
business. 

• Response  Times.  The  speed 
of  assistance  provided  to  the 
user  in  response  to  a disaster 
is  many  times  faster  than  that 
provided  by  an  insurance 
company.  No  assessors  are 
involved — the  customer 
simply  logs  a call  with  the 
maintenance  provider  in  the 
same  way  that  he  would  raise 
a standard  fault  call. 

• "One-stop"  cover.  By  sub- 
scribing to  HELP!,  the  cus- 
tomer arranges  for  complete 
computer  systems  protection 
and  maintenance  cover  with  a 
single  supplier — the  mainte- 
nance provider — thereby 
reducing  the  administrative 
overhead  involved  in  protect- 
ing assets  and  the  business. 

• Price.  EMP  stresses  that  the 
price  of  the  package  com- 
pares very  favourably  to 
standard  insurance  policies 
offering  a similar  level  of 
cover. 


INPUT 


C '990  by  INPUT.  Reproduction  prohibited. 


November  1990 


Service  Update 


Operational  Issues 

Having  described  the  essential 
elements  of  HELP!,  how  does 
the  scheme  operate  in  practice? 

The  first  point  to  stress  is  that 
there  is  no  direct  contact  be- 
tween EMP  and  the  end  user. 
The  maintenance  provider 
enters  into  a contract  with  EMP 
to  become  a supplier  of  the 
scheme,  which  is  combined  with 
the  standard  maintenance 
contract. 

On  becoming  a supplier  of 
HELP!,  the  maintenance  pro- 
vider will  receive  training  and 
product  marketing  materials 
and  assistance  from  EMP  to  help 
in  promoting  the  concept  to  the 
user. 

In  the  event  of  a problem  occur- 
ring to  the  insur^  equipment, 
the  user  raises  a fault  call  in  the 
normal  way.  Under  the  terms  of 
the  cover,  the  maintenance 
provider  commences  work 
without  the  need  to  gain  author- 
ity from  EMP.  The  maintenance 
provider  completes  the  neces- 
sary documentation  and  returns 
it  to  EMP.  EMP  has  the  capabil- 
ity to  process  the  claim  and  is 
aiming  to  be  able  to  settle  all 
claims  in  7 to  14  days.  The 
scheme  therefore  permits  action 
to  be  taken  on  a major  disaster 
in  the  same  timeframe  as  a 
standard  fault  call.  Speedy 
settlement  is  designed  to  ensure 
that  the  cash  flows  of  the  pro- 
vider are  not  adversely  affected. 

The  Company 

EMP  Ltd.  is  a new  company 
formed  specifically  to  develop 
and  market  the  idea  that 
evolved  into  HELP!.  Exhibit  E 


5 


lists  the  key  personnel  of  the 
company,  who  combine  experi- 
ence in  financial  services,  com- 
puter maintenance  operations 
and  management  consultancy, 
ensuring  that  the  company  has 
the  requisite  skills  to  market 
such  a product. 

The  product  was  launched  in 
July  of  this  year  after  a period  of 
18  months  spent  researching  the 
market  and  satisfying  the  re- 
quirements of  Lloyds  of  London. 

Relationship  with 
LLoyds  of  London 

EMP  is  a "correspondent"  for 
Lloyds  which,  in  simple  terms, 
means  that  the  company  devel- 
ops and  markets  its  own  insur- 
ance based  products,  which  are 
100%  underwritten  by  Lloyds. 
Exhibit  F shows  the  relation- 
ships between  the  parties 
involved  in  HELP!.  EMP  is 
particularly  keen  to  stress  the 


importance  of  its  relationship 
with  Lloyds  because  the  fact  that 
HELP!  is  underwritten  by  the 
most  famous  and  probably  the 
most  respected  insurance 
organisation  in  the  world  gives 
it  a distinct  competitive  edge. 

Comment 

INPUT  believes  that,  potentially, 
this  product  has  a very  signifi- 
cant role  in  the  ongoing  devel- 
opment of  customer  services 
products,  particularly  in  relation 
to  the  small  and  medium-sized 
systems  segments.  Although 
insurance  products  do  exist  that 
cover  the  area  of  disaster  recov- 
ery, INPUT  is  of  the  opinion  that 
HELP!  offers  two  features  that 
place  it  apart  from  alternative 
insurance  offerings. 

Firstly,  the  speed  of  response  to 
recovery  from  disaster  is  gov- 
erned by  the  disciplines  pertain- 

Continued  on  nexl  page 


November  1990 


C1990  by  INPUT.  Repfodudlon  prohibted. 


INPUT 


Service  Update 


6 

"HELP! ",  .from  page  5 

ing  to  the  customer  services 
environment — not  the  insurance 
industry. 

Secondly,  the  partnership 
between  HELP!  and  the  stan- 
dard maintenance  offering  of  the 
provider,  which  is  intrinsic  to 


Although  a number  of  signifi- 
cant benefits  can  be  derived 
from  the  concept,  it  is  worth 
considering  a couple  of  caution- 
ary points.  Although  the  prod- 
uct does  offer  the  maintenance 
provider  a "unique  selling 
proposition"  it  is  obviously  only 
unique  if  it  is  not  adopted  by 
direct  competitors.  Should 
demand  for  the  product  acceler- 


sized  users  should  not  be  under- 
estimated. EMP  itself  has 
appreciated  this  point  and  has 
placed  considerable  emphasis 
on  the  provision  of  marketing 
assistance  and  advice  to  the 
maintenance  provider. 

On  balance,  however,  INPUT 
believes  that  HELP!  is  an  impor- 
tant product  for  customer 


Exhibit  F 


The  HELP!  Relationships 


Lloyds  of 
London 

EMP  Ltd. 

The  'Correspondent' 

The  Service 
Provider 

Contract 

Customer 

Underwrites 
the  risk 

Develops  and  markets 
the  product 

Provides  the 
service 

The  covered 
party 

A 

Claim  

A 


Claim 

Settlement 


the  concept  of  the  product, 
provides  the  user  with  an 
extremely  comprehensive 
service  that  is  also  very  simple 
to  administer. 

From  the  maintenance 
provider's  perspective,  INPUT 
believes  that  the  key  advantage 
to  be  derived  from  HELP!  is  Uie 
ability  that  the  product  provides 
to  market  a comprehensive 
customer  service  package  which, 
above  all,  is  targeted  at  serving 
the  user's  business,  not  simply 
the  computer  systems 
equipment. 


ate  rapidly,  the  competitive 
advantage  gained  from  offering 
the  product  would  rapidly  be 
converted  into  a competitive 
disadvantage  for  those  who  do 
not  supply  it.  Secondly,  it 
should  be  noted  that  the  success 
of  the  product  to  the  mainte- 
nance provider  is  dependent 
upon  his  abilities  to  sell  the  need 
for  a disaster  recovery  service  to 
the  end  user.  For  many  users  of 
small  systems,  the  concept  of 
data  backup  seems  to  remain  an 
alien  notion  and,  therefore,  the 
difficulties  of  selling  disaster 
protection  to  small  to  medium- 


services  organisations  to  con- 
sider in  terms  of  the  consider- 
able benefits  it  offers  to  both  the 
maintenance  provider  and  to  the 
user. 

If  you  would  like  further  infor- 
mation on  HELP!,  please  contact 
Michael  Ketley  at: 

EMP  Ltd. 

3 Etrona  Buildings, 

172/174  Granville  Road, 
London,  NW2  2LP. 

Telephone:  081-458-0047 
Fax:  081-209-1139  ■ 


INPUT 


'990  by  INPUT.  Reproduction  prohibited. 


November  1990 


Service  Update 


7 

Hewlett-Packard  Service  Offerings — A Review 


Hewlett-Packard  has  long 
prided  itself  on  consis- 
tently being  among  the  most 
highly  rated  service  suppliers  of 
the  major  computer  manufactur- 
ers. The  purpose  of  this  article 
is  to  summarise  the  company's 
current  service  offerings,  both  in 
terms  of  the  service  products 
themselves  and  the  HP  service 
philosophy.  Exhibit  G details 
the  key  elements  of  the  total 
service  package  and  illustrates 
the  inter-relationships  that  exist 
between  the  services — all  of 
which  contribute  to  the  core 
product.  Computer  Support 
Services. 

In  addition  to  the  importance 
attached  to  the  modular  nature 
of  the  service  offerings,  HP 
places  very  considerable  empha- 
sis on  the  equal  attention  given 
by  the  customer  services  provid- 
ers to  the  predelivery  phase  of 
the  relationship  with  the  cus- 
tomer and  to  the  provision  of 
implementation  and  ongoing 
operational  support.  The  impor- 
tance attached  to  the  ongoing 
nature  of  this  relationship  is 
illustrated  by  the  fact  that  a 
customer  engineer,  an  applica- 
tions engineer  (responsible  for 
software)  and  a sales  representa- 
tive are  all  assigned  to  an  instal- 
lation project  from  the  planning 
phase  to  implementation. 

The  following  description  of  the 
component  elements  of  the 
package  will  serve  to  illustrate 
the  central  importance  of  these 
two  approaches  to  the  HP 
service  philosophy. 


Computer  Support 
Services 

The  Computer  Support  Services 
product  is  the  core  of  the  HP 
service  package,  into  which  the 
other  service  modules  feed 
when  required.  It  divides  the 
customer's  service  requirements 
into  three  phases;  Systems 
Planning,  Implementation,  and 


Operations,  and  provides  a good 
illustration  of  the  equal  empha- 
sis placed  by  the  company  on 
the  full  range  of  the  customer's 
technical  service  needs. 

The  planning  element  is  the 
starting  point  of  the  whole 
service  operation  and  is  dedi- 
cated to  assisting  customers  in 
accurately  assessing  their 


Exhibit  G 

The  HP  Service  Product 


Continued  on  next  page 


November  1990 


O 1990  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 
8 


HP  Offerings.  . .from  page  7 

requirements.  Exhibit  H out- 
lines the  services  that  can  feed 
into  this  process. 

The  Consultancy  Services  option 
is  concerned  primarily  with 
defining  systems  requirements 
and  the  provision  of  technical 
expertise  to  assist  with,  for 
example,  network  design. 

Project  Services  is  responsible  for 
supplying  the  customer  with 
project  management  expertise 
and  is  generally  staffed  by 
people  with  skills  in  managing 
projects  related  to  specific 
industry  sectors. 

Both  environmental  services  and 
customer  education  can  be  in- 
volved in  the  planning  phase  of 
a system  installation  if  required. 

Exhibit  1 illustrates  the  implemen- 
tation phase  of  the  Computer 
Support  Services  offering.  It  can 
be  regarded  as  a logical  exten- 
sion to  the  services  provided  in 
the  planning  stage.  The  site 
planning  and  installation  ser- 
vices together  with  consultancy 
services  include  modules  de- 
signed to  ensure  efficient  sys- 
tems implementation  and  the 
sucessful  introduction  of  the 
technology  into  the  business 
operation.  The  "network  pre- 
pare" option,  for  example,  is  a 
service  designed  to  ensure  the 
smooth  introduction  of  a net- 
working solution  into  the  user's 
working  environment. 

The  operations  element  within 
the  package  is  concerned  with 
ongoing  hardware  maintenance, 
software  and  network  support 
and  related  services.  Exhibit  J 
details  the  elements  of  the  HP 


operations  package.  The  hard- 
ware maintenance  support  pack- 
age, in  addition  to  including 
standard  hardware  repair,  the 
details  of  which  are  contained  in 
Exhibit  K,  also  includes  "Predic- 
tive Support"  for  the  HP  3000 
system,  which  allows  warnings 
of  problems  derived  from  the 
system  error  logs  to  be  transmit- 
ted to  the  HP  response  centre  for 
action,  thereby  significantly 
reducing  the  likelihood  of 
unscheduled  downtime. 

The  escalation  management 
system  employed  by  HP  in- 
volves the  use  of  increasing 
levels  of  support  expertise. 
Second-level  support  for  critical 
problems  is  triggered  if  the 
cause  of  a problem  has  not  been 
isolated  after  4 hours  and  third- 
level  assistance  is  involved  at  8 
hours. 

Software  Support  Services  offers 
three  levels  of  service  intended 
to  match  the  full  range  of  techni- 
cal proficiency  of  the  customer 
base.  The  base  level,  known  as 
"HP  Baseline,"  provides  access 
to  the  HP  worldwide  support 


database  and  the  right  to  use 
software  updates  and 
documentation. 

In  addition  to  the  services 
included  at  the  Baseline  level, 
"HP  Responseline"  includes 
access  to  the  company's  elec- 
tronic support  line,  which 
allows  the  user  to  submit  calls  to 
the  service  electronically. 
Responseline  also  includes  the 
use  of  the  HP  Customer  Re- 
sponse Centre,  covering  tele- 
phone support  assistance, 
software  problem  escalation 
management  and  the  use  of 
remote  diagnostics. 

The  third  level  of  support,  called 
"HP  Teamline,"  adds  the  ser- 
vices of  a support  consultant  to 
the  lower  levels  of  service 
provision.  The  consultant  will 
assist  the  user  in  areas  such  as 
reviewing  systems  performance 
and  planning  future 
requirements 

In  addition  to  these  standard 
offerings,  HP  can  offer  indi- 
vidual support  contracts  under 
the  heading  of  the  "HP  Custom 


INPUT 


C '990  by  INPUT.  Reproduction  prohibited. 


November  1990 


Special  Insert 

Concept  Update 

An  update  to  an  article  in  INPUT’S  Service  Update,  October  1990 


Last  month,  INPUT  published  an  article  about 
Groupe  Concept  and  notified  its  readers  that 
additional  information  on  the  company  was 
forthcoming.  This  is  an  update  on  the  situation. 

On  October  30, 1990,  Concept  SA  stunned  the 
Paris  bourse  by  announcing  half-year  losses 
equivalent  to  $35.9  million.  Trading  in  Concept 
shares  has  been  suspended  pending  official  an- 
nouncement of  the  figures.  The  company  expects 
operating  losses  of  up  to  $40  milhon,  plus  excep- 
tional items  of  $60  million,  including  $20  million 
for  accelerated  depreciation,  $20  million  for  acqui- 
sition costs  and  charges  for  lay-offs  at  CCMC  and 
for  closing  an  office  in  Nancy.  Concept  blames  the 
losses  on  the  problems  related  with  managing  its 
fast  growth  (revenues  have  grown  a hundredfold 
since  1985)  and  managing  all  the  acquisitions 
made  between  1988  and  1990. 

In  order  to  face  its  problems  Concept  has  under- 
gone a complete  re-organisation.  Today  the  Group 
includes  3 main  areas  and  4 distinct  companies: 

• Products  and  services  to  professional  accoun- 
tants and  to  small  and  medium-sized 
companies:  CCMC 

• Products  and  services  to  large  companies  and 
groups:  SCE  & Technic  Informatique 

• Third-party  maintenance:  Spectral  MIS 


Changes  which  have  occurred  since  INPUT 
published  its  article  include: 

1)  The  sale  of  SCBF  banking  and  service  division 
to  Altus  Finance 

2)  The  sale  of  SACI  office  equipment  'distribution 
business  (formerly  part  of  CCMC)  Fiducial 
Group 

3)  Spectral  MIS  operating  as  an  independent  unit 
no  longer  under  Technic  Informatique 

4)  Concept  no  longer  operating  or  selling  its 
services  in  the  U.K. 

The  sale  of  the  two  companies  reduced  Concept's 
debt  by  $144  million  to  $150  million,  nearly 
halving  its  annual  interest  payments. 

These  events  alter  the  exhibits  shown  in  the 
previous  article  as  follows: 

Exhibit  C Organisation  Chart 

SACI  and  SCBF  no  longer  figure  and  Spectral  MIS 
is  on  the  same  level  as  CCMC,  SCE  and  Technic 
Informatique.  Shareholding  in  the  various 
companies  does  not  change. 

In  spite  of  this  major  setback,  the  company  is 
confident  of  profitability  for  1991. 


Exhibit  H 


Groupe  Concept  1990  Forecast 
($  Millions) 


Revenue 

Growth 
from  1989 

Net  Profit 

Percent 

Groupe  CCMC 

200 

-11 

NA 

NA 

Technic  Informatique 

106 

- 

- 

- 

Groupe  SCE 

210 

30 

14 

6.2 

Spectral  MIS 

53.1 

- 

27 

9.5 

November  1990 


© 1990  by  INPUT.  Reproduction  prohibited. 


It  »li  I ' I ) 


Service  Update 


9 


' Customer  Support  Services 

The  Implementation  Phase 


Support  Plan."  These  contracts 
can  incorporate  the  provision  of 
such  services  as  training,  spe- 
cific project  or  design 
consultancy,  or  the  undertaking 


of  periodic  performance 
reviews. 

Data  Protection  consultancy 
services  offer  "HP  Safeguard" 


and  "HP  Security."  Safeguard  is 
concerned  with  using  the  exist- 
ing security  features  of  the 
system  and  the  design  of  effec- 

Continued  on  next  page 


November  1990 


O 1090  by  INPUT.  Reproduction  prohibitod. 


INPUT 


10 


HP  Offerings.  . .from  page  9 

tive  operating  procedures  to 
minimise  the  risk  of  data  loss  or 
corruption.  Security  is  con- 
cerned with  the  application  of 
software  tools  to  minimise 
unauthorised  access  to  data. 

The  remaining  elements  of  the 
operations  phase  of  the  Cus- 
tomer Support  Services  product 
exist  as  specific  services  in  their 
own  right  and  are  described 
below. 


Exhibit  J 


Customer  Support  Services 
Operations 


Hardware  Support  Services 


Instrument  Support  Services 


Software  Support  Services 


Network  Support  Services 


Exhibit  K 


Maintenance  Package 

Hardware  Maintenance  Packages: 


Coverage 

Response 

Options 

Guaranteed  uptime  service 

24  hrs.  a day, 

7 days  a week 

4 hrs. 

Standard  system  maintenance 

9am-9pm  Monday  to  Friday, 
excluding  HP  holidays 

4 hrs. 

Extended 

coverage 

Basic  system  maintenance 

9am-9pm  Monday  to  Friday, 
excluding  HP  holidays 

1 working 
day 

Improved 
response  time, 
after-hours 
coverage  service 

Hardware  Maintenance  Packages  for  Workstations  Only: 


Coverage 

Response 

Options 

Priority  on-site  service 

9am-5pm  Monday  to 

Friday,  excluding  HP  holidays 

4 hrs. 

Next  day  on-site 

9am-5pm  Monday  to 

Friday,  excluding  HP  holidays 

1 working 
day 

Improved 
response  time, 
after-hours 
coverage  service 

Scheduled  on-site  (min.  25 
workstations) 

1 weekly  visit 

Customer  return  service 

<3  days 

INPUT 


C1 990  by  INPUT.  Raprodudlon  prohibited. 


November  1990 


Consultancy  Services 


11 


Exhibit  L 


Exhibit  L details  the  major  areas 
of  expertise  covered  by  I IP 
Consultancy  Services.  The  areas 
covered  by  the  service  can 
essentially  be  divided  into 
applications  and  design  prod- 
ucts such  as  Engineering 
Automation  Applications  or 
Networking,  and  products 
targeted  at  maximising  the 
performance  and  operation  of 
the  system.  Information  Man- 
agement, System  Security  & 
Management  and  Client-Server 
Computing  are  the  principal 
examples  of  this  element  of  the 
service. 

Environmental  Services 


Consultancy  Services  Offerings 

• Applications/design  products 
-Engineering  automation  applications 

- Manufacturing  and  finance  applications 
-Networking 

• System  performance/operations 
-Performance 
-Information  management 
-System  security  and  management 

- Client-server  computing 
-Education 


The  Enviromental  Services 
element  of  the  company's 
service  product  covers  the  full 
range  of  requirements  for 
housing  systems  equipment 
from  cable  installation  to  the 
design  and  construction  of  fully 
equipped  computer  rooms. 
Exhibit  M defines  the  full  range 
of  services  offered  by  HP  from 
site  selection  to  commissioning. 

Multivendor  Support 
Services 

HP's  multivendor  support 
offering  works  in  parallel  with 
the  standard  hardware  mainte- 
nance and  software  support 
facilities  that  form  part  of  the 
Computer  Support  Services 
Programme.  The  company 
claims  that  it  can  support  and 
maintain  "all  major  brands 
inclusive  of  PCs,  peripherals 
and  PC-LANs."  Specific  manu- 
facturers' products  in  which  HP 
specialises  include  the 
following: 


Exhibit  M 

Environmental  Services 


Continued  on  next  page 


November  1990 


O 1990  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 


12 


HP  Offerings.  ..from  page  11 

• Novell 

• 3COM 

• IBM 

• Apple 

• Compaq 

• Tandon 

• Epson 

• Toshiba 

The  service  covers  access  to  the 
MP  Response  Centre  and  on-site 
assistance. 

In  offering  this  service,  HP 
claims  that  the  user  can  derive 
considerable  benefits  from  the 
use  of  a single  contact  who 
retains  complete  accountability 
for  a total  installation. 

Hardware  Support 
Services 

In  addition  to  the  hardware 
maintenance  services  included 
as  part  of  the  Computer  Support 
Services  module,  the  company 
includes  the  repair,  servicing 
and  calibration  of  its  test  and 
measurement  equipment  within 
the  overall  service  offering. 

Network  Support 
Services 

The  Network  Support  Services 
option  covers  the  full  range  of 
network  consultancy  require- 
ments from  planning  to  commis- 
sioning. The  company  stresses 
that  all  HP  networks  are  "open 
systems"  based  upon  industry 
standards,  allowing  the  com- 
pany to  incorporate  a wide 
range  of  vendors  into  flexible 
networks.  The  methodology 
employed  in  implementing  the 
services  is  detailed  in  Exhibit  N. 


Exhibit  N 


Network  Support  Services 
The  Process 


INPUT 


e 1990  by  INPUT.  Reproduction  prohibited. 


November  1990 


Service  Update 


13 


The  Disaster  Recovery 
Service 

"Ninety  percent  of  companies 
that  suffer  computer  failure  go 
out  of  business  within  one  year" 
is  one  of  the  phrases  that  is  used 
by  HP  to  promote  the  disaster 
recovery  service.  The  service 
itself  was  started  in  1986  and 
can,  therefore,  claim  to  be  one  of 
the  longest  established  disaster 
recovery  options  offered  by  the 
major  manufacturers. 

Exhibit  O details  the  principal 
elements  of  the  package,  which 


can  be  divided  into  two  sections. 
Firstly,  HP  will  assist  in  contin- 
gency planning  for  a disaster 
either  through  consultancy  or  a 
formal  training  course. 

Secondly,  the  company  provides 
the  disaster  recovery  services 
itself.  The  premium  service, 
HPBACKUP,  is  available  within 
24  hours  of  a disaster  and 
provides  round-the-clock  access 
to  an  HP  system  housed  in  a 
purpose-built,  fully  equipped 
disaster  recovery  suite. 


HPMOBILE,  available  to  a 
limited  number  of  subscribers, 
will  provide  a fully  configured 
system  and  the  necessary  envi- 
ronmental equipment  delivered 
to  the  user's  site  within  24  hours 
of  a disaster  alert.  The  system 
will  be  installed  and  tested  by 
HP  staff  and  is  available  24 
hours  per  day. 

HPSTANDBY  provides  the 
same  facilities  as  HPMOBILE 
except  that  the  system  is  deliv- 
ered to  an  "HP-approved  facil- 
ity" that  already  contains  the 
necessary  environmental 
equipment.  ■ 


Snippets 


-I*  DIGITAL  has  won  a five-year 
contract  to  both  supply  and 
run  the  network  of  WH  Smith 
Group  PLC,  a major  U.K. 
retailer.  The  contract  is 
estimated  to  be  worth  $28 
million. 


*1-  Group  Franca  is 

Cyinformatique,  the  French 


subsidiary  of  SD-Scicon  PLC, 
has  purchased  a 51%  stake  in 
Charbonnage  De  France 
Informatique,  formerly  a 
subsidiary  of  the  state-owned 
coal  producer,  for  approxi- 
mately $5.5  million.  As  a 
result,  Groupe  Francais  has 
become  France's  largest 
facilities  management 
company. 


*1*  James  MacDonald,  the  head 
of  Prime  Computer  Inc.  has 
indicated  that  the  company 
intends  to  move  into  third- 
party  maintenance  and 
disaster  recovery  operations. 

Allied  Dunbar,  the  U.K. 
insurance  company,  has 
announced  that  it  is  to  set  up 
its  own  maintenance  opera- 
tion and  dispense  with  the 

Continued  on  next  page 


November  1990 


O 1990  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 


14 

Snippets.  . .from  page  1 1 

services  of  Granada.  The 
company  believes  that  it  will 
prove  to  be  more  cost-effec- 
tive to  carry  out  maintenance 
itself  by  swapping  out  failed 
components. 

Snippets  from  the  USA 

*t-  Another  recently  announced 
agreement  for  the  acquisition 
of  TRW  Customer  Service 
Division  by  Phoenix  Technol- 
ogy Inc.,  Valley  Forge,  PA. 
The  sale  is  expected  before  30 
November  1990,  pending 
regulatory  approval.  TWR 
CSD  employs  1,250  people  in 
offices  across  the  U.S.  and 
had  1989  sales  of  approxi- 
mately $120  million. 

Announced  at  DECWorld'90 
was  Digital  Equipment 
Corp's  Advanced  Electronic 
Support  (AES),  electronic 
support  for  network  custom- 
ers running  under  the  VMS 
operating  system.  AES 
features  include  VAXcim  Plus 
monitoring  software,  access 
to  DEC'S  technical  databases, 
and  DSNlink  software,  which 
allows  customers  to  access 
DEC'S  Customer  Support 
Centres  (CSCs). 

Granada  Computer  Services 
continues  to  increase  its 
presence  in  the  U.S.  field 
service  market  with  the 
recent  purchase  of  React 
Corp.  React  Corp,  with  95 
employees  and  1989  revenues 
of  approximately  $10  million, 
provides  maintenance  service 
on  Unisys  and  Burroughs 
equipment. 


Other  recent  acquisitions 
include  the  acquisition  of 
New  Jersey-based  R & M 
Associates  by  Delta 
Compatec.  R & M will 
operate  as  a wholly  owned 
subsidiary  of  Delta  and  will 
retain  the  R & M name.  This 
recent  acquisition  makes 
Delta  one  of  the  largest  third- 
party  maintainers  in  the  New 
York  area. 


Question: 

What  type  of  service  is  available 
on  Amdahl's  mainframes? 

Answer: 

Amdahl's  Customer  Services 
Centre  is  available  toll-free,  24 
hours  a day,  allowing  access  to 
service  experts  and  diagnostic 
tools.  Amdahl  CPUs,  storage 
devices,  and  communications 
processors  and  controllers  have 
built-in  error  recovery  diagnos- 
tic systems,  which  can  run 
diagnostic  routines,  record  event 
errors,  and  identify  failing 
components.  Some  products 
also  have  on-board  modems, 
allowing  remote  trouble-shoot- 
ing and  software  fixes  through 
Amdahl's  Diagnostic  Assistance 
Centre  (AMDAC).  Amdahl 
service  also  includes  preventive 
maintenance,  trouble-shooting, 
replacement  parts,  a designated 
Amdahl  site  representative,  and 
on-site  service. 


•4*  TRW  Customer  Service 

Division  has  announced  three 
new  support  programs,  called 
Advantage  I,  II  and  III. 
Advantage  I offers  unlimited 
VAX/VMS  software  training 
for  up  to  10  registered  stu- 
dents per  year  for  a single  fee. 
Advantage  II  will  offer  many 
of  the  same  services  and  is 
geared  towards  smaller  users, 
while  Advantage  III  is  tar- 
geted at  larger  customers.  ■ 


Question: 

How  are  laptop  computers  used 
in  the  field  by  service  engineers? 

Answer: 

IBM:  The  FEs  use  a hand-held 
unit  for  administrative  purposes 
and  problem  tracking.  The  FE 
enters  the  client  name  and 
specifies  the  type  of  equipment 
and  the  problem.  At  the  end  of 
the  day,  the  information  is 
uploaded  to  the  host  system  for 
analysis  of  equipment  reliability. 

HP:  Hewlett-Packard  does  not 
use  laptops  of  any  sort  for  its 
FEs.  Most  HP  machines  are 
already  linked  to  the  Response 
Centre,  so  the  FE  can  directly 
link  to  the  diagnostics  and 
trouble-shooters  at  the  centre. 
The  HP  3000  machines  have 
predictive  maintenance  systems, 
which  are  also  linked  with  the 
response  centres. 


INPUT 


O 1990  by  INPUT.  Rapfodudlon  pfohibiled. 


November  1990 


15 


Bell  Atlantic  Business  Systems 
Services:  Bell  Atlantic  is  cur- 
rently testing  the  feabibility  of 
using  laptops  in  the  field,  both 
for  administrative  and 
diagnostic  purposes. 

TRW:  The  FEs  will  shortly 
begin  using  laptops  for  diagnos- 
tic purposes.  Only  those  FEs 
that  service  bank  ATMs,  micro- 
computers, and  network  sys- 
tenis  will  use  them.  At  the  client 
site,  the  FE  will  dial  up  the  host 
TRW  machine  (using  an  800 
number),  feed  in  the  problem, 
and  a suggested  solution  will  be 
sent  back. 

Digital  Equipment  Corp: 

Digital  does  not  use  laptops  yet. 

Intelogic  Trace:  The  FEs  use  a 
new  diagnostic  tool  called 
"Tech-in-the-Box."  It  is  a por- 
table PC/ AT  clone  with  special 
hardware  and  software  features 
that  allow  IT  Novell-trained 
customer  engineers  to  test  and 
repair  microcomputer  compo- 
nents and  peripherals  without 
bringing  the  network  down.  By 
using  the  computer's  built-in 
modem,  the  FE  can  access 
Novell's  NetWire  technical 
information  service,  the  Techni- 
cal Encyclopedia  of  Computer 
Hardware  and  Software 
(TECHS),  and  Novell's 
Technical  Information  Database. 


Question: 

From  XL/Datacomp's  perspec- 
tive, what  is  the  main  difference 
between  its  XL  Support  Plus  and 
IBM's  System  Xtra? 

Answer: 

XL/Datacomp  feels  there  are 
two  types  of  support:  the  first  is 
defect  management,  where  there 
is  "bioken"  code,  or  the  poten- 
tial for  it,  and  the  customer  has 
identified  the  problem  through 
error  codes.  Tbe  problem  is 
then  fixed  by  a PTF.  Defect 
management  also  includes  the 
installation  of  new  releases  and 
distribution  of  licensed  material 
(i.e.,  manuals).  The  second  type 
of  support  is  planning,  opera- 
tional, and  educational.  For 
example,  planning  is  required  if 
a customer  wants  to  expand  a 
network,  or  wants  to  design  a 
communications  network.  XL/ 
Datacomp  will  help  a client  plan 
how  many  modems  or  how 
many  terminals  can  be  assigned 
per  controller,  etc.  XL/ 
Datacomp  can  also  aid  in  plan- 
ning the  client's  next  application 
by  identifying  how  much  stor- 
age in  main  memory  will  be 
required  if  and  when  an  up- 
grade should  be  ordered  and 
installed  to  insure  proper 
response  time. 

Operational  support  covers 
assisting  client  overcome  diffi- 
culties in,  for  example,  operating 
a printer  or  terminal.  Educa- 


tional support  includes  teaching 
or  helping  the  client  understand 
the  functions  of  a new  release  or 
programmed  product  being 
implemented. 

XL/Datacomp  feels  that  its 
Support  Plus  plan  adequately 
covers  all  of  the  above  types  of 
support  through  access  to  its 
toll-free  number.  The  staff  at  the 
phone  have  the  ability  to  answer 
any  questions  necessary  to 
provide  the  support  mentioned 
above. 

IBM's  Systems  Extra,  on  the 
other  hand,  is  (according  to  XL/ 
Datacomp)  set  up  as  follows  (as 
stated  by  XL/Datacomp):  The 
client  dials  an  IBM  800  number 
and  a customer  support  repre- 
sentative finds  out  who  would 
be  the  proper  person  to  answer 
the  question.  Support  is  largely 
limited  to  issues  of  defect  man- 
agement. The  staff  answering 
the  phones  generally  come  from 
a CE  (hardware-oriented) 
background,  so  they  may  not 
have  full  knowledge  of  d 
system  or  system  management. 
When  the  client  gets  into  plan- 
ning questions  or  operational 
problems,  the  question  is  for- 
warded to  a local  branch  office 
or  agent.  This  increases  the 
response  time  and  usually  costs 
a bit  extra.  ■ 


November  1990 


O 1 090  by  INPUT.  Reproduction  prohibited. 


INPUT 


About  INPUT 


INPUT  provides  planning  information,  analysis,  and  recommendations  to 
managers  and  executives  in  the  information  processing  industries. 
Through  market  research,  technology  forecasting,  and  competitive 
analysis,  INPUT  supports  client  management  in  making  informed 
decisions. 


Continuous-information  advisory  services,  proprietary  research/ 
consulting,  merger/ acquisition  assistance,  and  multi  client  studies  are 
provided  to  users  and  vendors  of  information  systems  and  services 
(softwrare,  processing  services,  turnkey  systems,  systems  integration, 
professional  services,  communications,  and  systems /software 
maintenance  and  support). 


Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior 
management  positions  in  operations,  marketing,  or  planning.  This 
expertise  enables  INPUT  to  supply  practical  solutions  to  complex  business 
problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a 
leading  international  research  and  consulting  firm.  Clients  include  more 
than  100  of  the  world's  largest  and  most  technically  advanced  companies. 


INPUT  OFFICES 


North  America 

San  Francisco 

1280  Villa  Street 

Mountain  View,  CA  94041-1194 

Tel.  (415)  961-3300 

Fax  (415)  961-3966 

New  York 

Atrium  at  Glenpointe 
400  Frank  W.  Burr  Boulevard 
Teaneck,NJ  07666 
Tel.  (201)  801-0050 
Fax  (201)  801-0441 

Washington,  D.C. 

1953  Gallows  Road,  Suite  560 
Vienna,  VA  22182 
Tel.  (703)  847-6870 
Fax  (703)  847-6872 


International 
London 

Piccadilly  House 
33/37  Regent  Street 
London  SWIY  4NF,  England 
Tel.  (071)  493-9335  Fax  (071)  629-0179 

Paris 

52,  boulevard  de  Sebastopol 
75003  Paris,  France 
Tel.  (33-1)  42  77  42  77  Fax  (33-1)  42  77  85  82 

Frankfurt 
Sudentenstrasse  9 

D-6303  Langgons-Niederkleen,  Germany 
Tel.  (0)  644:^7229  Fax  (0)  6447-7327 

Tokyo 

Saida  Building 
4-6,  Kanda  Sakuma-cho 
Chiyoda-ku,  Tokyo  101,  Japan 
Tel.  (03)  864-0531  Fax  (03)  864-4114 


INPUT 

Service 

Update 


Route: 


© INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — International 

December  1990 


Olivetti  Speaks  Out 

This  month,  INPUT  is  focus- 
sing upon  the  independent 
maintenance  activities  of 
Olivetti.  By  embarking  upon  a 
strategy  of  aggressively  expand- 
ing both  its  independent  and 
multi  vendor  maintenance 
operations,  Olivetti  has  largely 
succeeded  in  reaching  the  goal 
that  has,  to  date,  eluded  its 
principal  competitors — namely, 
the  establishment  of  a solid 
revenue  stream  outside  the 
traditional  and  declining  hard- 
ware maintenance  activity. 

INPUT  estimates  that  the  Euro- 
pean customer  services  revenue 
of  Olivetti  has  grown  by  ap- 
proximately 16%  between  1989 
and  1990  from  a figure  of  about 
$1200  million,  compared  with 
our  estimated  average  growth 
rate  figure  for  the  overall  Euro- 
pean customer  services  market 
of  about  8%.  Impressive  though 


Exhibit  A 

European  Independent  Maintenance 
Operators  by  Revenue 


Company 

1989  Revenues 
($  Millions) 

Granada 

260 

Olivetti 

250 

Thomainfor 

70 

Sorbus 

60 

Getronics 

45 

Note:  Revenues  attributed  to  Olivetti  are  for  the 

independent  maintenance  activities  of  the  group. 

All  figures  have  been  rounded  and  are  based  upon 
INPUT  estimates. 

Continued  on  next  page 


Service  Update 
2 


Olivetti...  from  page  1 

Olivetti's  growth  rate  is,  a 
further  illustration  of  the  success 
of  the  company's  strategy  is  that 
Olivetti's  independent  mainte- 
nance revenues — excluding 
multivendor  operations — make 
it  one  of  the  leading  indepen- 
dent maintenance  companies  in 
Europe.  Exhibit  A presents 
INPUT'S  estimates  of  the  rev- 
enues of  the  major  European 
independent  maintenance 
operators. 


The  Business  Philosophy 
Key  Influences 


Having  established  the  position 
of  Olivetti  within  the  hierarchy 
of  vendors,  two  points  are 
worthy  of  note.  Firstly,  as  with 
the  other  leading  vendors, 
Olivetti  has  largely  achieved  its 
position  within  the  independent 
maintenance  market  through  a 


strategy  of  acquisition.  How- 
ever, unlike  its  competitors, 
Olivetti  has  maintained  an 
"arm's  length"  relationship  with 
the  companies  that  it  has  taken 
over,  maintaining  their  indepen- 
dence and  even  allowing  them 
to  compete  against  each  other. 
Olivetti's  corporate  profile 
within  the  independent  mainte- 
nance business  has,  therefore, 
remained  low.  Secondly,  the 
company  stresses  that  achieving 
a given  position  within  the 
competitive  league  table  is  not 
part  of  its  strategic  intent. 

The  Olivetti  Customer 
Service  Business 
Philosophy 

By  achieving  growth  and  market 
penetration,  Olivetti  can  un- 
doubtedly claim  to  have  evolved 
a highly  successful  customer 
services  business.  The  winning 
of  a series  of  large  and  presti- 
gious contracts — such  as 
Barclays  Bank  and  Boots,  the 
retailing  chain — in  the  U.K. 
indicates  the  scale  of  operation 
that  Olivetti's  independent 
maintenance  arm  is  able  to 
undertake. 

How  is  it  that,  alone  among  the 
major  equipment  vendors, 
Olivetti  has  been  able  to  success- 
fully develop  the  core  mainte- 
nance business  into  new  sources 
of  revenue?  INPUT  believes 
that  the  answer  to  this  question 
is  in  the  company's  business 
philosophy. 

Three  key  elements  can  be 
identified  as  contributing  to- 
wards the  development  of  the 
company's  business  philosophy, 
as  illustrated  in  Exhibit  B. 


INPUT 


e 1990  by  INPUT.  Reproduction  prohibited. 


December  1990 


3 


Business  p)rGssures  include  the 
problem  areas  dial  are  now 
commonly  accepted  within  the 
customer  services  business  and 
are  summarised  in  Exhibit  C. 

Most  of  these  points  are  com- 
mon knowledge  within  the 
industry.  However,  Olivetti 
maintains  that  the  reticence 
displayed  by  the  independent 
maintenance  companies  to 
develop  alternative  competitive 
strategies  apart  from  the  on- 
going reliance  on  competing 
purely  on  price  is  detrimental  to 
the  customer  services  business 
as  a whole. 

Exhibit  D presents  the  cultural 
inhibitors  Olivetti  has  observed 
as  restraining  equipment  ven- 
dors from  effectively  expanding 
their  service  offerings. 

Olivetti  perceives  that  there 
remains  within  the 
organisations  of  many  equip- 
ment vendors  a degree  of  confu- 
sion as  to  which  strategy  and 
goals  the  customer  services 
organisation  should  pursue. 
Recognition  of  the  current 
pressures  exists  but  no  clear 
ideas  have  emerged  on  how  to 
respond  to  them,  which  has  led 
to  what  Olivetti  temrs  an  iden- 
tity crisis. 

Perhaps  the  clearest  manifesta- 
tion of  the  identity  crisis  is  what 
Olivetti  expresses  as  the  "arro- 
gance of  account  control",  which 
can  be  considered  as  equipment 
vendors'  ongoing  priority  to 
maintain  control  of  their  ac- 
counts in  an  attempt  to  protect 
revenues.  Such  an  attitude  fails 
to  take  into  account  either  the 
current  competitive  pressures 
within  the  business  or  the 
attention  being  given  to  IT 


expenditure  by  the  senior 
management  of  user  companies, 
and  it  can  be  regarded  as  a 
significant  inhibiting  factor  to 
the  development  of  new  service 
attitudes  and  products.  Olivetti 
argues  that  such  an  attitude  will 
tend  to  reduce  customer  loyalty, 
thereby  putting  further  pressure 
on  revenues  rather  than  serving 
as  a successful  defensive  niecha- 
nism. 


Exhibit  C « . r-. 

Business  Pressures 
A Summary 


• Increased  reliability  of  hardware 

• Reduced  cost  of  hardware  applying  pressure  to 
maintenance  revenues 

• Independent  maintenance  suppliers  creating 
pressure  on  revenues  by  gaining  market  share 
through  competing  on  price 

• The  failure  of  independent  maintenance 
suppliers  to  introduce  value-added  services  that 
would  lead  to  reduced  price  competition 

• The  increased  visibility  of  IT  expenditure  at 
senior  levels  within  user  organisations 


The  final  aspect  of  the  company 
business  philosophy  is  the 
concept  of  "open  support", 
which  Olivetti  has  developed  in 
response  to  the  growth  of  open 
systems.  Alan  Watson,  the 
General  Manager  of  Olivetti's 
Customer  Support  Group, 
defines  the  driving  force  behind 
open  support  as  follows: 

"We  should  use  the  growth  of 
Open  Systems  and  its  increas- 
ing take-up  by  larger 

Continued  on  next  page 


December  1990 


C 1990  by  INPUT  Reproduction  prohibited 


INPUT 


Service  Update 
4 


Olivetti.  . .from  page  3 

organisations  as  an  opportu- 
nity for  users  and  suppliers 
alike  to  look  more  closely  at 
the  type  and  extent  of  sup- 
port services  currently  avail- 
able, and  to  define  new  and 
more  encompassing 
programmes  specifically 
relevant  to  open  systems. 
Enter  'open  support'...." 
(Alan  Watson  15/10/90) 


Exhibit  D 

Cultural  Inhibitors 


• The  "identity  crisis"  of  the  vendor 

• The  "arrogance  of  account  control" 


Olivetti  has  identified  the 
importance  of  open  systems  as 
an  opportunity  to  assist  in  the 
drive  towards  alternative  service 
offerings,  an  attitude  that  can  be 
regarded  as  an  important  ele- 
ment of  its  business  philosophy. 

This  philosophy  is  simply  the 
committed  application  of  basic 
marketing  concepts  to  the 
totality  of  the  customer  services 
business.  At  the  root  of  this 
philosophy  is  the  critical  impor- 
tance that  Olivetti  attaches  to 
satisfying  the  customer's  needs, 
which  is  the  core  tenet  of  basic 
marketing  theory,  and  which  is 
also  an  idea  to  which  virtually 
every  commercial  organisation 
at  least  pays  lip  service.  Olivetti 
claims,  however,  that  this  idea  is 
the  principal  element  of  its 
service  culture,  a statement  it 
supports  with  the  following 
points: 


Firstly,  considerable  emphasis  is 
place  throughout  the 
organisation  on  the  develop- 
ment and  maintenance  of  mean- 
ingful customer  relations  in 
order  to  maintain  an  ongoing 
understanding  of  the  extent  to 
which  requirements  are  being 
met. 

Secondly,  the  customer  services 
sales  force  is  not  trained  to  sell 
particular  packaged  solutions 
but  to  identify  needs  and  to 
ensure  that  proposed  solutions 
meet  those  needs. 

Finally,  the  company  does  not 
promote  its  services  through 
specific  "customer  care 
programmes"  supported  by 
glossy  brochures.  Olivetti's 
promotional  strategy  is  to  point 
to  what  it  has  done  rather  than 
what  it  intends  to  do. 

The  Service  Package — 
"Credibility  in  Depth" 

The  company  claims  to  have 
succeeded  in  achieving  its 
position  in  the  independent 
maintenance  market  largely 
through  a policy  of  growth 
through  acquisition.  The  princi- 
pal objective  of  the  strategy  was 
to  satisfy  the  following  two 
requirements: 

• To  acquire  technical  expertise 
in  strategically  important 
areas 

• To  restrict  acquisition  activity 
to  commercially  viable  target 
companies 

Exhibit  E lists  the  constituent 
companies  within  the  Olivetti 
independent  maintenance 
operation  with  a brief  indication 
of  their  principal  areas  of  opera- 
tion. 


INPUT 


O 1990  by  INPUT.  Reproduction  prohibited. 


December  1990 


Exhibit  E 


The  Constituent  Companies  within  the  Olivetti 
Independence  Maintenance  Operation 


5 


Company 

Mission 

Location 

Decision  Systems 
International 

To  provide  maintenance  and  systems 
support  in  the  IBM  and  DEC  mini  markets 

To  sell  useful,  life-enhancing  add-ons, 
peripherals  and  second-user  systems 
in  the  IBM  and  DEC  markets 

To  provide  single-source  maintenance 
for  selected  customers  with  multivendor 
environments 

Belgium 

France 

Spain 

U.K. 

Germany 

Holland 

Italy 

Australia 

Testpoint 

Third-party  maintenance 

Canada 

C.T.S.  Comtech 
Service 

Third-party  maintenance  with  particular 
skills  in  networks  and  communications 

Belgium 

Dansk  Data 

Installation 

Network  installation  and  maintenance 
specialist 

Denmark 

Oakley  Computer  Ltd. 

Third-party  maintenance  in  a Wang 
environment 

U.K. 

O.A.S. 

Third-party  maintenance  in  the  AES, 
Wordplex  and  Wang  environments 

U.K. 

Datronic  Peripheral 
Systems 

Third-party  maintenance  in  the  the  DEC 
environment 

To  sell  useful,  life-enhancing  add-ons, 
peripherals  and  second-user  systems 
in  the  markets 

Switzerland 

Ing.  F.  lachiello  & 

Co.  Spa 

Network  installation  and  maintenance 
specialist 

Italy 

Conlinucd  on  next  f>uge 


December  1990 


© 1990  by  INPUT.  Reprodudion  prohibited. 


INPUT 


Service  Update 


6 

Olivetti.  .from  page  5 

As  has  been  previously  indi- 
cated, acquired  companies 
retain  their  identity  and,  to  a 
large  degree,  their  independence 
of  operation.  The  principal 
responsibilities  of  the  head  office 
function  can  primarily  be  con- 
sidered as  twofold: 

® To  ensure  the  existence  of  a 
common  core  of  service 
offerings 

• To  coordinate  pan-European 
and  multinational  proposals 

The  company  has  extended  the 
policy  of  acquiring  companies 
possessing  strategically  impor- 
tant technical  knowledge  to  one 
in  which  individual  companies 
within  the  group  are  tasked  with 
retaining  and  disseminating 
technical  expertise.  Particular 
companies  will  have  specialist 
knowledge  of  particular  manu- 
facturers or  product  areas,  and 
they  have  responsibility  for  the 
ongoing  development  of  their 
skills. 

Proposal  Formulation 

Olivetti  points  out  that  it  is 
highly  selective  over  the  con- 
tracts for  which  it  will  submit 
proposals  and,  by  so  doing,  the 
company  is  able  to  use  the 
process  of  proposal  formulation 
to  expand  its  skills  base.  Pro- 
posals will  only  be  tendered  for 
contracts  that  either  utilise 
existing  skills  or  that  involve  a 
logical  extension  of  skills  that 
the  company  already  possesses. 
Formulation  of  the  proposal 
provides  the  opportunity  for 
detailed  project  and  technical 


planning  that  seeks  to  ensure  the 
economic  and  technical  feasibil- 
ity of  the  contract.  An  indica- 
tion of  the  seriousness  with 
which  Olivetti  regards  this 
process  is  the  fact  that  up  to  50 
people,  representing  finance, 
sales  & marketing  and  service 
departments  within  Olivetti's 
service  operation,  can  be  in- 
volved on  a major  project  pro- 
posal at  any  one  time 

INPUT  Comments 

Olivetti  is  in  the  fortunate 
position  of  being  a hardware 
manufacturer  that  can  currently 
boast  a highly  successful  service 
organisation  with  an  impressive 
growth  record.  Furthermore, 
the  company  can,  with  some 
justification,  claim  to  be  an 
independent  maintenance 


Education  and  training  is 
accepted  as  being  one  of  the 
areas  of  customer  services  with 
the  potential  for  real  growth: 
INPUT  estimates  that  the  West- 
ern European  market  for  educa- 
tion and  training  services  grew 
by  approximately  16%  between 
1989  and  1990.  However,  the 
area  has  not  received  the  atten- 
tion that  it  deserves.  INPUT  is 
taking  the  opportunity  to  profile 
a small  training  company 
named  Elmbrook  Training 
Services  to  look  at  current  trends 
within  the  training  market. 

John  Howes  founded  Elmbrook 
in  August  1988  after  a career  in 
both  sales  and  customer  services 
with  Digital.  Exhibit  F lists  the 
courses  currently  offered  by  the 
company. 


supplier  whose  differential 
advantage  is  based  on  flexibility 
and  credibility  of  service  rather 
than  on  price. 

The  key  lesson  to  be  derived 
from  Olivetti's  example  is  that 
successful  diversification  away 
from  excessive  reliance  on 
hardware  maintenance  can  be 
achieved,  given  two  key  condi- 
tions. Firstly,  the  provider  must 
genuinely  focus  on  the  provision 
of  a level  of  service  whose 
principal  requirement  is  to 
satisfy  customer  needs.  Sec- 
ondly, the  company  must 
maintain  a disciplined  approach 
to  technical  diversification  and 
to  contract  proposal.  Olivetti  is 
proof  of  what  can  be  achieved 
given  the  whole-hearted  appli- 
cation of  these  conditions.  ■ 


Elmbrook  Training  Services  is 
an  example  of  a number  of  small 
training  establishments  that 
make  up  a significant  propor- 
tion of  the  systems  training 
market.  The  existence  of  the 
company,  together  with  the 
range  of  courses  it  offers,  pro- 
vides an  interesting  insight  into 
the  key  elements  of  the  educa- 
tion and  training  market. 

It  is  apparent  from  Exhibit  F that 
the  company  is  strongly  ori- 
ented towards  Digital,  insofar  as 
a significant  number  of  courses 
relate  specifically  to  its  range  of 
product  offerings.  Elmbrook's 
market  for  these  products  is 
Digital  itself  and  its  dealers  and 
principal  customers:  John 
Howes  estimates  that  60%  of  his 
work  derives  from  Digital.  This 
arrangement  illustrates  a trend 


Elmbrook  Training  Services 


INPUT 


e 1990  by  INPUT.  Reproduction  prohibited. 


December  1990 


Service  Update 


7 


on  the  part  of  manufacturers  to 
contract  a portion  of  the  services 
they  supply  to  tliird  parties 
rather  than  relying  on  full-time 
staff  dedicated  to  providing  all 
such  services.  Such  a tactic  on 
the  part  of  the  manufacturer  has 
obvious  benefits  in  terms  of  cost 
savings  and  flexibility,  but  for 
the  small  company  supplying 
the  service  product,  there  are  a 
number  of  potential  risks. 


Secondly,  Elmbrook  is  actively 
seeking  to  establish  partnership 
agrcH?ments  with  other  small- 
scale  suppliers.  By  establishing 
a network  of  such  companies,  it 
will  be  possible  to  offer  a portfo- 
lio of  courses  across  a broader 
range  of  manufacturers'  equip- 


Exhibit F 

Elmbrook’s  Training  Offerings 


The  heavy  reliance  on  a single 
customer  is  evidently  a signifi- 
cant risk,  particularly  in  relation 
to  the  delivery  of  courses  con- 
cerning technical  issues.  Gener- 
ally, excessive  reliance  on  a 
single  source  of  business  poses  a 
significant  and  obvious  risk  to 
the  small  supplier.  Addition- 
ally, trainers  operating  outside 
the  company  can  encounter 
problems  in  keeping  abreast  of 
technical  developments. 

Commercial  Courses 
for  Customer  Services 

Elmbrook  is  adopting  two 
courses  of  action  to  reduce  its 
reliance  on  Digital.  Firstly, 
courses  have  been  developed  to 
attack  niche  markets  that  extend 
beyond  the  boundaries  of  a 
single  supplier.  Such  courses 
include  general  computing  and 
computer  sales  courses  but  also 
cover  training  specifically 
targeted  at  the  customer  services 
business.  The  customer  rela- 
tions skills  and  the  selling 
services  course  both  utilise  John 
Howes'  background  and  pro- 
vide the  client  company  with  the 
opportunity  to  focus  on  these 
two  critical  areas  of  the  cus- 
tomer services  business. 


• General  Commercial  Courses 
-Selling  Services 
-Customer  Relations  Skills 
-Negotiating  Effectively 

-Effective  Presentation  and  Communication 

- Introduction  to  Computers 

-Cost  Justification  of  Computer  Systems 

- Buying  Computer  Solutions 

• Digital-Specific  Courses 

- Introduction  to  Digital 

- Selling  with  Digital 

-Digital  Architectures,  Products  and  Services 

-Solution  Definition,  Configuration  and  Pricing 

-Solution  Definition,  Configuration  and 
Pricing— ULTRIX/RISC  Update 


ment.  Such  an  arrangement  will 
allow  the  company  to  retain  the 
advantages  of  economy  and 
flexibility  inherent  in  a small 
operation  while,  at  the  same 
time,  permitting  the  expansion 
of  the  product  range  covered. 


Continued  on  next  page 


December  1990 


C 1990  by  INPUT.  Reprodudioo  prohibited. 


INPUT 


Service  Update 


8 


Elmbrook.  . .from  page  7 

Future  Developments 

Elmbrook  is  confident  that  the 
trend  towards  increased 
outsourcing  will  continue  and 
that  it  is  reasonable  to  predict 
that  a network  of  small  training 
companies  will  emerge  that 
offers  experienced  trainers  with 
the  flexibility  to  respond  rapidly 
to  the  changing  needs  of  their 
clients.  The  principal  danger 
facing  these  emerging  opera- 
tions is  the  tendency  to  rely  too 
heavily  upon  a single  manufac- 


turer. However,  the  need  to 
diversify  into  new  markets 
should  generate  a variety  of  new 
courses  addressing  needs  out- 
side the  traditional  product- 
based  course. 

If  you  would  like  further  infor- 
mation about  Elmbrook  Train- 
ing Services,  please  contact  John 
Howes  at: 

Elmbrook  Training  Services, 
Elmbrook  House,  Garth  Road, 
Morden  Surrey,  SM4  4TS, 

United  Kingdom  Tel  - 081  330 
6646.  ■ 


Questions 
from  the  USA 


cases,  can  be  fixed  while  the 
machine  is  still  running. 

Amdahl  has  also  imple- 
mented a new  method  of 
installing  upgrades  without 
disrupting  the  customer's 
operating  environment  (i.e., 
channels  can  be  added  with- 
out taking  down  the  system). 


Q:What  types  of  automated 
procedures,  systems  and  tools 
are  available  on  Amdahl's 
new  5995? 

A:  Amdahl's  improved  on-board 
diagnostics  will  permit  the 
machine  to  by-pass  non- 
critical  problems.  The  proces- 
sor can  access  several  AI 
systems  when  a failure 
occurs.  The  AI  system,  in 
turn,  analyses  the  situation 
and  sends  back  a fix. 


Q.  Does  Fujitsu  have  a mainte- 
nance quality  discount  sched- 
ule for  ATMs? 

A.  Fujitsu  has  a sliding  schedule 
ranging  from  2%  on  15  to  30 
units  to  13%  on  150  units  or 
more.  There  is  also  a special 
plan  available  in  cases  where 
a number  of  ATMs  are  ad- 
ministered by  a central  billing 
address. 

Q.  What  are  Sharp's  service 
offerings? 


By  bypassing  non-critical 
problems,  it  is  possible  to 
schedule  a single  engineering 
visit  to  resolve  a number  of 
problems,  which  in  many 


A:  Sharp  has  two  service  con- 
tract options: 

REPAIR  DEPOT — the  cus- 
tomer ships  its  equipment  to 
its  local  depot. 


INPUT 


© 1990  b/  INPUT.  Reproduction  prohibited. 


December  1990 


Service  Update 


The  repair  depot  service  also 
includes  EXTRA  (Extended 
Time  Repair  Agreement) — a 
mail-in  service  to  the  five 
mail  repair  depots. 

There  are  three  plaiis  avail- 
able: 

1)  Priority  repair/Priority 
next-day  shipping 

2)  Priority  repair/Regular 
shipping 

3)  Normal  repair/Normal 
shipping 

SABERS  (Sharp  Authorised 
Business  Equipment  Repair 
Stations) — the  customer  takes 
the  machine  to  its  local 
SABERS  and  picks  it  up 
again.  There  are  over  150 
SABERS  locations  nation- 
wide. 

Field  engineers  are  only 
available  through  the  SA- 
BERS, and  customers  must 
pay  for  the  expense  of  travel. 
Labour  and  parts  are  under 
either  warranty  or  under 
contract. 

Q.What  service  offerings  does 
Computer  Maintenance  and 
Parts  Company  have? 

A.  Computer  Maintenance  and 
Parts  (CMP) 

310  Central  Road 
Fredericksburg,  VA  22401 

The  company  can  provide 
third-party  maintenance  on 
most  OEM  equipment,  some 
systems  integration,  and 
fourth-party  maintenance 
(although  only  on  Zenith 
equipment). 


December  1990 


For  third-party  maintenance 
the  list  includes: 

IBM— 370,  360,  Series  1,  3033, 
4300,  3082, 3090,  9370s.  All 
PC  lines. 

NAS 

Amdahl— 5850,  5870,  300 

STC — all  peripherals 

Memorex — all  computer 
equipment 

DEC — mainly  peripherals, 
although  it  does  have  the 
capability  to  service  the  1 1 / 
750  VAX  machines. 

HP — peripherals 

Wang  — PCs 

Unisys — PCs,  8000,  9000 

Burroughs — 1900  PC  (B26, 
XE/850),  etc. 

CMP  can  provide  mainte- 
nance for  95%  of  the  IBM  PC 
clone  manufacturers. 

Fourth-Party  Maintenance — 
Zenith  only.  The  company 
has  the  capability  to  provide 
service  to  the  component 
level,  and  it  has  a service 
depot  specially  for  that 
purpose.  The  fourth-party 
maintenance  service  was 
introduced  eight  months  ago. 

Software  Support — There  are 
two  to  three  people  in-house 
who  are  software  oriented. 
The  company  has  agreements 
with  most  software  vendors, 
so  if  there  are  questions  that 


C 1990  by  INPUT.  Reproduction  prohibited. 


9 

the  in-house  staff  cannot 
handle,  they  can  address  the 
software  house  for  answers. 

General  Information 

1989  revenue  $1.7  million:  ull 
of  it  for  third-party  mainte- 
nance 

Number  of  employees:  40-45 
nationwide 

President  is  Mr.  William  D. 
Stovall 

The  company  was  established 
in  1979. 

Q:  How  does  Sungard  market 
disaster  recovery  services  ti) 
the  federal  government? 

A:  The  office  in  Fairfax,  Virginia 
handles  the  federal  accounts. 
According  to  Sungard  "there 
is  not  a lot  of  business" 
derived  from  the  federal 
market.  Primary  clients  are 
the  Office  of  the  President, 
some  federal  agencies  and 
federal  affiliates  (i.e.,  defence 
contractors). 

There  is  very  little  difference 
between  the  way  Sungard 
markets  its  disaster  rc-covery 
services  to  federal  govern- 
ment compared  to  commer- 
cial markets.  The  only  real 
difference  is  that  Sungard 
offers  the  largest  discounts  to 
the  federal  government.  For 
both  the  federal  and  commer- 
cial markets,  Sungard  has  had 
to  go  through  a long  REP 
process.  Sungard  endeavours 
to  tailor  the  best  solution  for 
each  client.  ■ 


Conlinucd  an  ru  xi  fnl^e 


INPUT 


Service  Update 


10 


Snip 

❖ ITS  SA,  the  French  telecommunications 
services  company,  and  Aeroflot,  the  USSR 
airline,  have  set  up  a partnership  in  Mos- 
cow. In  addition  to  providing  systems 
integration  services  to  Aeroflot,  the  com- 
pany will  also  offer  computer  maintenance 
services  to  other  western  ventures  being 
established  in  the  Soviet  Union. 

❖ Granada  has  replaced  IBM  as  the 
maintainer  at  the  Galileo  airline  reservation 
data  centre  at  Swindon  in  the  U.K. 

**♦  Thomainfor  is  continuing  with  its  acquisi- 
tion strategy.  The  company  has  taken  a 
majority  stake  in  Spain's  Cero 

Mantenimitica  Cero  SA,  increasing 
Thomainfor's  pan-European  coverage  by 
giving  it  a presence  in  Spain. 

❖ Further  to  our  article  on  EMP  last  month. 
Digital  has  announced  its  Business  Protec- 
tion Service  in  the  U.K.  The  product,  which 
has  been  in  operation  in  the  U.S.  for  eight 
years,  offers  the  use  of  a recovery  centre 
where  disaster-struck  subscribers  can 
resume  operations.  The  package  also 
includes  a Recovery-all  element  offering  an 
insurance  plan  for  the  repair  or  replacement 
of  equipment,  including  that  of  other 
vendors. 

pets 

❖ In  an  attempt  to  mitigate  the  impact  of  the 
increasing  shortage  of  graduates  in  Europe, 

ICL  has  entered  into  an  agreement  with  the 
Institut  Superior  d'Electronique  in  Paris.  The 
agreement  covers  cooperation  and  resource 
sharing  and  involves  the  creation  of  a final- 
year  option  at  the  Institut  covering  the  area  of 
infomiation  networks. 

❖ Research  Machines,  the  leading  supplier  of 

PCs  to  the  education  market  in  the  U.K.,  is 
currently  recruiting  40  staff  for  its  service 
division  that  expects  to  employ  about  100  by 
the  year's  end. 

❖ The  Henly  Centre  of  the  U.K.  is  predicting 
accelerating  growth  in  the  facilities  manage- 
ment market.  In  a report  commissioned  by 

Rank  Xerox  Facilities  Management,  the  Centre 
assumes  the  principal  contributing  factors  to 
be  cost  savings  and  the  freeing  of  manage- 
ment time  to  concentrate  on  core  activities, 
plus  the  effects  of  the  well-publicised  shortage 
of  school  leavers  and  graduates. 

❖ CMC  Ltd,  the  Indian  computer  services 
company,  has  launched  an  "offshore"  facilities 
management  service.  The  basis  of  the  service 
is  that  the  central  support  offices  will  be 
located  in  India  where,  CMC  claims,  clients 
will  be  able  to  save  up  to  50%  on  European 

. costs. 

U.S.  S 

*1*  On  30  November  1990,  Digital  Equipment 
Corporation  announced  major  enhance- 
ments to  its  Integrated  Security  Programme, 
which  include  the  following: 

• Major  additions  to  VMS  password 
management,  to  deter  guessing  of  user 
or  system  account  passwords 

• New  management  features  in  the 

Ethernet  Enhanced-Security  System,  pro- 
viding node  authorisation,  access  control 
and  encryption  in  a multivendor  environ- 
ment LAN 

• A Compartmented  Mode  Workstation 
(CMW),  designed  to  be  evaluated  at  the  B1 

nippets 

and  CMW  level  of  trust.  CMW  is  based  on 

RISC  and  VAX  architectures,  ULTRIX  operat- 
ing systems  and  X-Windows/MOTIF. 

• The  availability,  through  Digital,  of 

Sybase's  Secure  SQL  Server,  multilevel  secure 
RDBMS  software  packages  for  VAX  ULTRIX 
systems 

• Digital's  Distributed  System  Security 
Architecture  (OSSA),  a comprehensive  specifi- 
cation for  implementing  information  security 
in  a distributed,  multivendor  environment 

• Secure  Solutions  Integration  Centre  to 
provide  security  consulting  and  solution 
design 

INPUT 


e 1990  by  INPUT.  Reproduction  prohibited. 


December  1990 


Service  Update 


11 


• Next  Step  Services  for  VMS  Security, 
which  consists  of  security  courses  and  consult- 
ing to  train  a customer's  information  systems 
(IS)  organisation 

These  new  products,  enhancements  and 
services  allow  customers  to  choose  the  appro- 
priate level  of  security  for  their  particular 
needs. 

Digitals  new  program  to  encourage  software 
vendors  to  develop  complementary  security 
products  targets  system  and  user  identity 
verification,  shared  software  and  data  integ- 
rity, and  confidentiality  of  sensitive  informa- 
tion transmitted  across  networks. 

IBM  reorganises  its  service  functions.  IBM 
announced  significant  changes  to  its  United 
States  service  organisation  on  1 November 
1990.  The  National  Service  Division  (NSD)  no 
longer  exists. 

The  major  changes  are  as  follows: 

• IBM  has  formed  a new  division,  the  IBM 
System  Services  Division  (ISSD).  The  key 
focus  of  ISSD  will  be  on  the  sales  and  delivery 
of  outsourcing  business  for  IBM.  IBM  has 
named  Mr.  Dennie  Welsh  as  president  of 
ISSD.  Mr.  Welsh  has  been  responsible  for 
managing  IBM's  system  integration  business 
with  the  federal  government.  Reporting  to 
Mr.  Welsh  as  General  Manager  of  System 
Services  Operations  is  Mr.  William  L.  Wilson 
and  his  staff,  who  were  previously  in  the 
National  Service  Division  (NSD). 

• Software  Support  Services  under  Ms. 
Patricia  K.  Kearney,  M&S  Director  of  Software 
Service  now  reports  to  Mr.  William  Grabe, 

IBM  Vice  President  and  General  Manager  of 
Marketing  for  IBM  in  the  United  States.  Mr. 


Grabe  was  already  responsible  for  the  user 
support  function  within  the  marketing 
organisation.  IBM  may  gain  some  efficiency 
by  merging  these  two  functioiis  in  the  future. 

• Service  marketing  under  Mr.  Thomas  V. 
Esposito,  Marketing  and  Services  Director  of 
Service  Marketing,  now  reports  to  Mr.  Grabe. 

• IBM  Vice  President  Mr.  Dave  MdX)well, 
who  was  President  of  the  National  Service 
Division,  is  now  General  Manger  of  Marketing 
and  Service  C^ality.  Mr.  McDowell  is  respon- 
sible for  guiding  marketing  and  service 
quality  efforts  in  the  United  States,  ensuring 
M&S  has  the  effective  information  systems 
strategy  and  application  architecture  essential 
to  achieving  quality  goals,  and  serving  as  the 
M&S  focal  point  for  product  quality  and  the 
delivery  of  high-quality  products. 

IBM's  large  field  service  organisation  no 
longer  reports  to  the  National  Service  Divi- 
sion. In  July,  IBM  changed  the  line  reporting 
structure  so  that  all  NSD  area  managers 
reported  to  a general  manager  of  marketing 
and  service  in  each  geographical  area.  There 
is  speculation  that  IBM  plans  to  make  a simi- 
lar move  on  1 January  1991  by  appointing  a 
general  manager  of  marketing  and  service  for 
each  major  city. 

IBM  stated  that  it  hoped  to  accomplish  two 
major  objectives  with  the  organisatii.)niil 
changes  announced  on  1 November;  to 
enhance  the  quality  of  marketing  and  to 
enhance  service  delivery  capability.  When 
asked  if  staff  reductions  would  result  from 
these  changes,  IBM  said  that  to  the  contrary, 
that  it  planned  to  increase  the  manpower 
devoted  to  services. 


Concept — The  Latest  Update! 

Since  our  update  on  Concept  in  the  November  issue  of  Service  Update,  further  developments  have 
occured  in  the  ongoing  saga  of  the  company.  A reorganisation  of  the  major  shareholders  has  left  Altus 
Finance  SA,  the  computer  services  company  which  is  49%  owned  by  the  state-owned  Thomson  CSF, 
with  a 50.1%  shareholding  in  Concept.  The  other  major  shareholder  is  the  state-owned  Credit  Lyonnais 
bank. 


December  1990 


C 1990  by  INPUT.  Reproduction  prohibited 


INPUT 


About  INPUT 


^ ; ] 

. ;i 


ESTPUT  provides  planning  information,  analysis,  and  recommendations  to 
managers  and  executives  in  the  information  processing  industries. 
Through  market  research,  technology  forecasting,  and  competitive 
analysis,  INPUT  supports  client  management  in  making  informed 
decisions. 

Continuous-information  advisory  services,  proprietary  research/ 
consulting,  merger/acquisition  assistance,  and  multiclient  studies  are 
provided  to  users  and  vendors  of  information  systems  and  services 
Software,  processing  services,  turnkey  systems,  systems  integration, 
professional  services,  communications,  and  systems/software 
maintenance  and  support). 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior 
management  positions  in  operations,  marketing,  or  planning.  This 
expertise  enables  INPUT  to  supply  practical  solutions  to  complex  business 
problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a 
leading  international  research  and  consulting  firm.  Clients  include  more 
than  100  of  the  world's  largest  and  most  technically  advanced  companies. 


INPUT  OFFICES 


North  America 

San  Francisco 

1280  Villa  Street 

Mountain  View,  CA  94041-1194 

Tel.  (415)  961-3300 

Fax  (415)  961-3966 

New  York 

Atrium  at  Glenpointe 
400  Frank  W.  Burr  Boulevard 
Teaneck,NJ  07666 
Tel.  (201)801-0050 
Fax  (201)801-0441 

Washington,  D.C. 

1953  Gallows  Road,  Suite  560 
Vienna,  VA  22182 
Tel.  (703)  847-6870 
Fax  (703)  847-6872 


International 

London 

Piccadilly  House 

33/37  Regent  Street 

London  SWIY  4NF,  England 

Tel.  (071)  493-9335  Fax  (071)  629-0179 

Paris 

52,  boulevard  de  Sebastopol 
75003  Paris,  France 

Tel.  (33-1)  42  77  42  77  Fax  (33-1)  42  77  85  82 

Frankfurt 

Sudentenstrasse  9 

D-6303  Langgons-Niederkleen,  Germany 
Tel.  (0)  644:^7229  Fax  (0)  6447-7327 

Tokyo 

Saida  Building 
4-6,  Kanda  Sakuma-cho 
Chiyoda-ku,  Tokyo  101,  Japan 
Tel.  (03)  3864-0531  Fax  (03)  3864-4114 


INPUT 


Service 

Update 


Route: 


©INF’UT 


A Publication  from  INPUT'S  Customer  Service  Programme — International 

January  1991 


IN 

THIS 

ISSUE: 


1 Thomainfor  Revisited 

5  Snippets 

6  U.S.  News 

7  Questions  from  the  U 


if 

I j'-y 


Thomainfor  Revisited 


In  Auj^nslof  1989,  INPUT 
proliic'd  Tliomninfor,  the 
l■l('n(■h  lliiicl  pnily  inninlcnnncc 
viMulor,  niul  described  the 
sliiiU');ie  direction  being 
}>iirsiied  by  the  company.  Now, 
some  17  months  later,  INPUT  is 
revisiting  the  company  to 
discover  the  extent  to  which  the 
strategy  has  been  maintained. 

Thomainfor,  whose  parent 
company  is  Thomson-CSF,  was 
originally  profiled  shortly  after 
it  had  acquired  the  European 
arm  of  Control  Data's  TPM 
operation.  The  news  of  the 
acquisition  was  released  in  the 
middle  of  June  1989,  and  it  was 
instrumental  in  establishing 
Thomainfor  as  an  independent 
maintenance  provider  of  fully 
European  dimensions.  Exhibit 
A indicates  the  effect  that  the 
Control  Data  operation  had  on 
the  revenues  of  Thomainfor.  In 


Exhibit  A 

Total  Thomainfor  Revenues 
1987-1990 


Note:  Currency  conversions  and  rounding  by  INPUT. 

Conlinucd  on  next  pof^c 


Service  Update 


2 


TllO}}iai}lfor...fnmi  page  1 

terms  of  geographic  coverage, 
Thomainfor  had  a very  strong 
presence  in  France,  and 
coverage  in  Germany,  Austria, 
Switzerland  and  the  U.K. 

The  Strategy 

I'he  strategy,  as  defined  in  1989, 
primarily  consisted  of  five 
components: 

• Growth  through  acquisition. 
Thomainfor  achieved  a pan- 
European  status  largely 
through  the  acquisition  of  the 
Control  Data  operation,  and 
it  was  made  clear  to  INPUT 
that  acquisition  was 
considered  to  be  the  major 
engine  for  growth. 

• Thomainfor  would 
concentrate  on  establishing 
expertise  in  the  maintenance 
of  the 


defined  as  large  or  medium- 
sized organisations.  The 
company  clearly  stated  that  it 
was  not  particularly  keen  to 
sign  up  small  customers. 

In  addition  to  the  European 
countries  in  which  it  already 
had  a presence,  Thomainfor 
indicated  that  its  longer-tenn 
goal  was  to  establish 
operations  in  each  country 
within  the  European 
community,  with  particular 
emphasis  upon  Spain,  the 
Netherlands,  Belgium  and 
Italy  in  the  short  to  medium 
term. 

Finally,  the  company  stated 
that  it  was  looking  to  achieve 
what  it  described  as  a "critical 
size" — which  was  defined  as 
being  a turnover  of  between 
$6.5  million  and  $8  million — 
in  every  country  market  that 
it  entered. 


The  strategy  was  both 
comprehensive  and  ambitious. 
How  far  has  the  company 
progressed  and  to  what  extent 
have  its  strategic  goals  proved  to 
be  achievable? 

The  Implementalion 

Exhibit  B illustrates  the 
progression  of  Thomainloi's 
revenue  forecasts  for  1990  inaile 
during  the  course  of  1989  and 
1990,  compared  with  the  figures 
actually  achieved,  and  it 
provides  valuable  insight  into 
the  company's  continuing 
growth  pattern  thiring  the  year. 

Growth  through 
Acquisition 

The  actual  1990  revenue  figure 
represents  an  increase  of  52% 
over  the  initial  forecast  made  in 
August  of  1989.  ThomiHnl\)i's 
revenues  have  increasetl  by 


equipment  of 
the  principal 
manufacturers 
such  as  IBM, 
Digital  and 
Bull. 

1 lowever,  it 
was  intended 
to  put  special 
emphasis  on 
the 

minicomputer 
sector  of  the 
market  and  to 
develop  a 
high  level  of 
expertise  in 
UNIX 
products. 

• The  target 
customer 
groups  were 


Exhibit  B 

Thomainfor  Revenues  for  1990 — Forecast  and  Actual 


Country 

Date  of  Estimate 

Actual 

1 990 

Aug. 1989 

Jan.  1990 

Dec.  1990 

France 

90.0 

123.7 

123.7 

124. 1 

West  Germany 

5.5 

7.4 

12.0 

1 1 .0 

Switzerland 

0.7 

0.9 

0.9 

1.0 

Austria 

3.0 

5.0 

5.0 

5.0 

United  Kingdom 

3.8 

4.8 

4.8 

4.2 

Belgium 

- 

8.7 

8.7 

7.9 

Spain 

- 

1.9 

5.0 

3.8 

Total 

103.0 

152.4 

160.1 

157.0 

INPUT 


u 1^91  by  INPUT.  Reproduction  probibned. 


Januaiy  1991 


Service  Update 


3 


Exhibit  C 

Thomainfor — The  Constituent  Companies 


approximately  112%  over  its 
1989  earnings,  which  can  only 
be  described  as  an  extremely 
rapid  rate  of  growth. 

The  number  of  forecasts  and  the 
scale  of  growth  achieved  can  be 
explained  by  the  number  of 
acquisitions  made  by  the 
company  during  the  course  of 
the  year.  Examples  include 
Awilex  and  Econocom  in 
Germany,  which  more  than 
doubled  the  anticipated 
revenues  of  the  German 
operation  and  increased  the 
number  of  branch  offices  from  7 


to  15.  The  French  operation  was 
strengthened  with  the 
acquisition  of  Sopra  and  Matra 
Datasysteme,  and  Thomainfor 
gained  a presence  in  Belgium 
through  the  acquisition  of 
Tekserv  and  GEMC.  The 
acquisition  of  CERO  has  given 
the  company  a foothold  in 
Spain. 

Exhibit  C sliows  the  ac».|uired 
companies  that  make  up 
Thomainfor  and  the  hill  extent 
of  the  aggressive  policy  of 
growth  pursued  by  the 
company. 


It  is  clear  from  the  pallLiu  ot 
purchase  that  the  coi  neislone  of 
i homainfor's  strategic  intent,  to 
grow  through  acquibitinn,  has 
been  applied  consibteiUly  and 
aggressively  during  the  eouibe 
of  1990. 

A Pan-European 
Company 

In  addition  li.>  ilhestiating  the 
revenue  growth  of  tlie  company. 
Exhibit  B also  shows  the 
expansion  of  Thomainlor's 

CorUlnuc'J  fu.  xl 


Exhibit  D Geographic  Expansion 


Medium-Term  Long-Term 

1989  Position  Target  Target 


France 

Belgium 

Luxembourg 

Germany 

Achieved 

Spain 

Portugal 

U.K. 

Netherlands 

Ireland 

Austria 

Italy 

Denmatk 

Switzerland 

Greece 

January  1991 


O 1991  by  INPUT  Ruprodudion  prultibnud 


INPUT 


4 


Tlioniainfor.  . .from  page  3 

geographical  coverage.  Exhibit 
D illustrates  the  progress  made 
in  1990  towards  the  stated  goal 
of  pan-European  coverage. 

It  should  be  noted  that  the 
acquisition  of  GEMC  in  Belgium 
has  given  Thomainfor  a 
presence  in  I.uxembourg. 

I he  growth  of  the  company 
during  1990  illustrates  the  very 
considerable  progress  made  in 
achieving  its  medium-term 
targets  and  provides  a valuable 
illustration  of  the  extent  to 
which  Thomainfor  has  sought  to 
implement  its  stated  strategy. 
However,  in  addition  to  not 
having  covered  all  targeted 
I countries,  the  company  is  some 


way  short  of  achieving  a 
"critical  size"  of  earnings  of  at 
least  $6.5  million  in  each  of  the 
country  organisations.  To  date 


only  France,  Germany  and 
Belgium  have  reached  this  goal. 

Product  Expertise 

Exhibit  E lists  the  major  product 
areas  in  which  Thomainfor 
cuiiently  has  expertise. 

The  company  has  remained  true 
to  the  product  strategy  as 
defined  in  1989.  Establishing 
expertise  in  workstations  was 
made  possible  by  the  acquisition 
of  the  French  company  Matra 
Datasysteme,  which  had 
expertise  on  the  Sun  workstation 
product  range.  Although  these 
products  appear  to  fall  outside 
the  range  of  activities  included 
in  the  original  strategy,  the 
possession  of  such  expertise 
considerably  furthers  the 
acquisition  of  UNIX  skills. 


The  Future 

Thomainfor  is  currently  the 
second-largest  independent 


maintenance  vendor  in  Euroj>e, 
behind  Granada,  and  the  largebl 
single  supplier  in  France.  In 
common  with  other  major 
vendors  in  the  maiket,  the 
company  has  achieved  its 
position  as  a result  of  a period  t)f 
intense  acquisition  activity. 

In  reviewing  the  perfonnance  of 
the  company  over  the  past  17 
months,  it  should  be  noted  that 
the  implementation  of  the 
strategy  has  remained  very  true 
to  the  original  [>lan  and  IhiU 
considerable  progress  luis  been 
made  towards  achieving  the 
major  goals  the  company  set  lor 
itself.  Growth  has  l)een 
spectacular,  and  the  company  is 
now  firmly  established  as  one  of 
the  principal  players  in  the 
market. 

Two  questions  remain.  F'irstly, 
will  the  company  continue  to 
seek  aggressive  growth  rates, 
supported  by  acquisition,  in 
order  to  achieve  its  remaining 
goals?  I'he  comj)any  has  yet  to 
establish  a presence  in  either  the 
Netherlands  or  Italy  and  is  some 
way  short  of  achieving  a 
"critical  size"  within  the 
majority  of  its  European 
operations.  Secondly,  will  the 
constituent  elements  of  the 
company  be  able  to  ollei  tjUiility 
service  and  responsiveness  to  its 
customers  after  a period  ol 
dramatic  growth  and 
consequent  change  within  the 
organisation? 

In  answer  to  the  second 
question,  it  is  too  early  to  olfer  a 
judgment.  Obviously,  the 
absorption  of  a significant 
number  of  companies  into  a 
large  and  growing  corporation 
involves  change  and  potential 
dislocation,  which  leads  to 
potential  decline  in  staiukirds  ol 


Exhibit  E 

Thomainfor  Product  Expertise 


Manufacturers 

Equipment  Categories 

Software 

IBM 

CPUs 

UNIX 

Digital 

Peripherals 

VMS 

Bull 

Workstations 

MVS 

Sun 

Microcomputers/PCs 

GEOs  6/7 

ATT 

Networks 

MS/DOS 

All  Major 

Minicomputer 

Manufacturers 

PROLOGUE 

INPUT 


O 1991  by  INPUT.  Reproduction  probibAed. 


January  1991 


Service  Update 


service.  Allliough  there  is  little 
doubt  that  the  company's 
dynamism  demonstrates  a 
strong  will  to  succeed,  the 
strength  of  these  factors  should 
not  be  underestimated.  It  is  too 
early  to  offer  a judgment  on 
eventual  success  at  this  stage  in 
the  company's  development. 
However,  it  will  be  instructive 
to  watch  the  continuing 
evolution  of  the  group. 


With  regard  to  the  first  question, 
INPUT  anticipates  that  despite 
the  strategic  targets  still  to  be 
met,  1991  will  be  a significantly 
quieter  year  for  Thomainfor 
than  1990.  Two  factors  influence 
this  conclusion.  Firstly,  it  is 
suggested  that  Thomainfor 
appreciate  the  need  for  a period 
of  absorption  to  allow  the  newly 
acquired  parts  of  the 


5 

organibation  It)  be  cl fct lively 
assimilated  into  the  wliule. 
Secondly,  the  cm  rent  vvoild 
outlook  is  far  trom  cundiuive  to 
a period  of  continuing 
aggressive  acquisiliun 
Although  there  is  little  iceson  tu 
doubt  Thomainlur  will  Luntinue 
to  pursue  its  strategic  goals,  the 
pace  of  growth  is  likely  to  slow 
appreciably.  ■ 


Snippets 


❖ Granada  Computer  Services  has 
won  a contract  to  service  Amdahl 
equipment.  Valued  at  over  £250,000 
per  annum,  the  contract  has  been 
awarded  by  Granada  Information 
Services.  The  computer  services 
division  already  maintains  IBM  and 
Memorex-Telex  equipment  but  not, 
until  now,  the  Amdahl  mainframes. 

Evidence  is  growing  that  U.K.  local 
government  is  increasingly  looking  at 
' facilities  management  contracts.  The 
local  government  IT  managers  group 
estimates  that  up  to  20%  of  councils 
will  be  exploring  the  use  of  facilities 
management.  This  data  is  supportcxl 
by  the  fact  that  both  Westminster, 
and  I lammersmith  and  I'ulham 
Councils  are  actively  considering  a 
move  to  facilities  management. 

❖ Data  General  has  announced  that  it 
will  be  offering  the  capability  of 
serving  Sun  Microsystems 
equipment.  It  is  reported  that  EXI 
has  entered  into  an  agreement  with 
Apex  Computer  Inc.  in  the  U.S.,  who 
will  provide  training  and  inventory 
support. 


K*  Digital  has  retained  its  largest  third 
party  maintenance  contract  despite 
competition  from  IBM.  The  conlmrt  with 
Westland,  the  U.K.  helicopter 
manufacturer,  is  worth  roughly  £2  5 
million  and  covers  all  Westland 
computer  equipment,  with  the  excejrliDii 
of  its  IBM  mainframes. 

*♦*  SD-Scicon,  the  U.K.  systenrs  hou^e,  is 
reported  as  having  reduced  its  I’C 
maintenance  support  prices.  1 he 
company  offers  a premium  service 
providing  on-site  response  within  lour 
hours  and  handles  software  suppoi  I lor 
some  proprietary  programs  aiul  a d.ila 
recovery  service  within  tlie  oveiall 
maintenance  contract. 

LIM  E,  the  London  International  l uluies 
Exchange,  has  awarded  its  coin[>uler 
maintenance  contract  to  Switch,  a small 
London-based  independent  mainlenauv  e 
company  with  15  employees  and  a 
turnover  of  approaching  £1  million.  A 
key  factor  influencing  the  awarding  oi 
the  contract  is  the  up  time  guariUitee 
offered  by  Switch.  ■ 


January  1991 


O 1991  by  INPUT.  Hopfoduaicxi  pioliibitud 


INPUT 


Service  Update 


Bell  Atlantic  Announces 
MAXwatch  SM 

On  5 December  1990,  Bell 
Atlantic  Business  Systems 
Services  announced  MAXwatch 
SM,  a systenis  integrity  monitor 
for  DEC  VAX/VMS  hardware. 

MAXwatch  monitors  all 
network  or  clusterwide  VAX 
systems  and  DEC  or  DEC- 
compatible  peripherals.  The 


News 
from  the 


system  features  call  home 
capabilities,  customer 
monitoring  and  notification 
thresholds,  and  can  perform 
automated  remedial  actions  in 
response  to  errors. 

When  certain  critical  errors 
occur,  MAXcall  SM 
automatically  places  a call  to 
Business  Systems  Services' 
Technical  Support  Centre.  The 
service  call  is  immediately 
logged  and  processed  for  remote 
diagnosis  and  support.  A field 
engineer  can  also  be  dispatched 
with  the  parts  needed  for  repair. 

MAXwatch  software's  reporting 
functions  allow  error  history 
reports  to  be  generated  for  any 
device  over  a specified  period  of 
time.  Preventive  maintenance 
can  be  scheduled  as  a result  of 
hardware  performance  analysis. 


MAXwatch  is  available  <it  lU) 
charge  as  part  of  stand.ml 
hardware  service  for  VAX 
maintenance  customeis  running 
version  VMS  4.0  or  later. 

Novadyne  Announces 
Remote  Monitoring 

Novadyne  Computer  Sy^tenis, 
Inc.  recently  announced  Remote 
Monitoring,  a proactive 
diagnostic  system  that  regularly 
dials  into  a Tandem  customer's 
computer  system  and  identifies 
potential  problems. 

Key  features  include  automatic 
dialing  to  the  system,  an 
analysis  of  error  information, 
password  protected/encrypted 
database  security,  and 
comparison  of  current  d.ita  to 
history  files  to  identify 
abnormalities. 

Remote  Monitoring  improves 
systems  productivity  by 
identifying  possible  failures  and 
scheduling  repair  at  the  client's 
convenience,  before  sei  ions 
system  failures  occur. 

Integrated  Securities 
Program  Announced  by 
DEC 

Digital  Equipment  announced 
an  Integrated  Security  Program, 
formalizing  Digital's 
commitment  to  information 
security  and  integrated  security 
architecture  for  distributed, 
multivendor  systems. 

The  Integrated  Security  Program 
is  a series  of  security 
enhancements  packaged  for 
single  systems,  LANs,  and 
management  services  to  assist 


INPUT 


O 1991  by  INPUT.  Reproduction  prohibited. 


January  1991 


Service  Update 


Questions 
from  the  USA 


organisations  in  implementing 
effective  security  controls. 

The  program  addresses  system 
and  user  identity  verification, 
integrity  of  shared  software  and 
data,  and  confidentiality  of 
sensitive  information  stored  or 
transmitted  across  networks. 

With  these  newly  integrated 
security  products,  capabilities, 
and  services,  customers  can 
choose  the  levels  of  security 
appropriate  for  their 
applications  and  organisations. 

Help  Desk  System 
Software  Available  for 
BusinessWise 

With  the  growth  of  internal  help 
desks  to  field  user  problenis, 
many  companies  are  adding 
help  desk  software  to  their  list  of 
required  software. 

One  of  the  offerings  currently 
available  to  assist  the  internal 
help  desk  in  the  management  of 
enquiries  is  SupportWise  for 
BusinessWise.  SupportWise 
offers  telephone  support  system 
technology  to  quickly  identify 
callers,  capture  call  information, 
dispatch  action  requests  and 
letters,  maintain  call  history  and 
client  information,  and  allow 
access  to  prior  calls,  technical 
notes,  and  customer 
configuration  information. 
SupportWise  has  been  designed 
for  the  high-volume  shop, 
supporting  complex  situations 
such  as  network  installation  and 
support.  The  Tech  Notes  search 
facility  assists  in  the  retrieval  of 
technical  bulletins  and  product 
notes.  ■ 


^^uestion: 

What  does  Affiliated  Computer 
Systenis  (ACS)  offer  for  ATM 
maintenance  service? 

A nswer; 

ACS  Field  Electronics  provides 
service  on  NCR,  IBM,  Diebold 
and  Docutel  ATMs.  Customers 
can  choose  a combination  of 
First  Line,  Second  Line,  and 
Cash  Replenishment  services  to 
meet  their  requirements. 

First  Line  maintenance  includes 
repair  of  card  or  form  jtims, 
replacement  of  forms, 
maintenance  of  ATM 
appearance  and  surrounding 
area,  unlimitL\i  number  uf  calls, 
clearance  of  dispenser  jams, 
customer  selection  of  hoiub  of 
service  coverage,  and  no 
mileage  surcharge  fur  A I’Ms 
outside  melropulitan  aiciis. 

Second  Line  maintenance 
includes  four  preventive 
maintenance  inspections  a year, 
customer  selection  of  hours  of 
service  coverage,  elimination  of 
extra  billings,  rapid  response  to 
service  calls  resulting  in 
improved  ATM  availability  and 
increased  transaction  revenue, 
money-back  guarantee  in  timely 
responses,  network/ 
communications  support, 
monthly  reporting  on  each 


A I’M,  unlimited  nuiiit)cr  ot 
service  calls,  no  mileage 
surcharge  for  A TMs  oulbide 
metropolitan  areab,  A'l  M 
camera  maintenance,  and  two 
preventive  maintenance  ».amera 
inspection  and  tebl  bhotb  a year. 

Cash  Replenibhment  Sei  vices 
include  ATM  cash 
replenishment  and  l)aknKing, 
return  of  capluivd  cauls, 
en^ergency  cash  replenishment, 
and  deposit  reluin  wheu 
applicable.  ■ 


I 

I 


January  1991 


C 1991  by  INPUT.  RepfoduUioii  ptolubnoJ. 


INPUT 


About  INPUT 


INPUT  provides  planning  information,  analysis,  and  recommendations  to 
managers  and  executives  in  the  information  processing  industries. 
Through  market  research,  technology  forecasting,  and  competitive 
analysis,  INPUT  supports  client  management  in  making  informed 
decisions. 

Continuous-information  advisory  services,  proprietary  research/ 
consulting,  merger /acquisition  assistance,  and  multiclient  studies  are 
provided  to  users  and  vendors  of  information  systems  and  services 
(software,  processing  services,  turnkey  systems,  systems  integration, 
p')rofessional  services,  communications,  and  systems/software 
maintenance  and  supp>ort). 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior 
management  positions  in  operations,  marketing,  or  planning.  This 
expertise  enables  INPUT  to  supply  practical  solutions  to  complex  business 
[iroblcms. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a 
leading  international  research  and  consulting  firm.  Clients  include  more 
than  100  of  the  world's  largest  and  most  technically  advanced  companies. 

INPUT  OFFICES  1 


North  America 


International 


San  Francisco 
1280  Villa  Street 

Mountain  View,  CA  94041-1194 
Tel.  (415)961-3300 
Fax (415)  961-3966 

New  York 

Atrium  at  Glenpointe 

400  Frank  W.  Burr  Boulevard 

Teaneck,NJ  07666 

Tel.  (201)801-0050 

Fax  (201)801-0441 

Washington,  D.C. 

1953  Gallows  Road,  Suite  560 
Vienna,  VA  22182 
Tel.  (703)  847-6870 
F’ax  (703)  847-6872 


London 

Piccadilly  House 

33/37  Regent  Street 

London  SWl  Y 4NF,  England 

Tel.  (071)  493-9335  Fax  (071)  629-0179 

Paris 

52,  boulevard  de  Sebastopol 
75003  Paris,  France 

Tel.  (33-1)  42  77  42  77  Fax  (33-1)  42  77  85  82 

Frankfurt 

Sudentenstrasse  9 

D-6303  Langgons-Niederkleen,  Germany 
Tel.  (0)  644^7229  Fax  (0)  6447-7327 

Tokyo 

Saida  Building 
4-6,  Kanda  Sakuma-cho 
Chiyoda-ku,  Tokyo  101,  Japan 
Tel.  (03)  3864-0531  Fax  (03)  3864-4114 


Route: 


INPUT 

Service 

Update 


©INPUT 


A Publication  from  INPUT’S  Customer  Service  Programme — International 


February  1991 


IN 

THIS 

ISSUE: 


1 Safetynet — A Disaster  Recovery  Specialist 


6 Snippets 

6 News  from  the  USA  1 


I 


Safetynet — A Disaster  Recovery  Specialist 


Disaster  recovery  is  a 

subject  that  has  attracted 
considerable  interest  in  the 
recent  past  among  both 
customer  services  and 
professional  services  vendors. 

In  order  to  understand  the 
current  market  position,  INPUT 
is  taking  this  opportunity  to 
profile  Safetynet,  a disaster 
recovery  specialist  that  has 
gained  an  established  position 
within  its  target  niche. 

Safetynet  Limited  is  a U.K. 
company  that  commenced 
trading  in  April  1986.  It  has,  up 
to  this  point,  concentrated 
exclusively  on  the  IBM 
midrange  customer  base, 
although  consideration  is  being 
given  to  expanding  the  scope  of 
products  that  are  manufacturer 
independent.  Exhibit  A shows 
the  range  of  hardware  currently 
supported,  and  the  products 


that  the  company  is  considering 
for  the  future. 

The  degree  to  which  the 
company  can  be  expected  to 
continue  to  attack  its  market 
niche  is  clearly  indicated  by  the 
advertised  mission  statement: 

"To  be  the  European  Leader  in 
the  IBM  Midrange  Disaster 
Recovery  Market." 

Geographic  Expansion 
and  Coverage 

The  company  currently  has  over 
200  customers  in  the  United 
Kingdom,  with  contracts  that 
will  generate  over  £8.9  million  in 
revenues  during  the  first  half  of 
the  1990s.  Having  established  a 
solid  position  within  the  U.K. 
market-place,  Safetynet  began 
actively  to  pursue  the  target 
inherent  in  its  mission  statement 


Exhibit  A 

Hardware  Ranges 
Covered 


• Current 
-IBM 

• System/38 

• AS/400 

• Potential 
-IBM 

• RS6000 


with  the  formation  of  Safetynet 
International  Limited  during  the 
latter  half  of  1988.  Exhibit  B 
shows  the  extent  to  which  the 
company  has  succeeded  in 
expanding  its  geographic 

Coniinued  on  next  page 


Service  Update 


2 


Safetynet.  . .from  page  I 

coverage  over  the  past  two 
years.  It  also  illustrates  quite 
clearly  that  the  Continental 
European  market  has  been 
targeted  first  in  the  company's 
international  expansion  plans. 
The  company  also  expects  that  a 


Exhibit  B 


Geographic  Coverage 


Year 

Operation 

Country 

Company  Name 

Relationship 
with  Parent 

Location/s 

1986 

U.K. 

Safetynet  Ltd 

Finley,  Surrey 
Chiswick,  W.  London 
Manchester 

1990 

France 

Safetynet  France  SA 

Wholly  owned 

Paris 

1989 

Spain 

CINSA 

Agent 

Madrid 

1990 

Italy 

GMI 

Agent 

Milan 

1990 

Denmark 

Cominvest  A/S 

Agent 

Aalborg 

Proposed:  Norway,  Sweden,  Germany,  Holland,  Far  East 


CINSA  in  Spain,  which  ranks  as 
IBM's  largest  Spanish  agent. 

The  use  of  franchising  provides 
two  key  advantages  for 
Safetynet.  Firstly,  it  allows  the 
company  to  select  franchisees 
that  possess  a high  level  of 
technical  expertise  in  the  IBM 
midrange  market-place  and. 


wholly  owned  German 
operation  will  be  established  in 
Frankfurt  during  the  course  of 
1991  together  with  a presence  in 
the  Outch  market. 

The  methods  adopted  to  gain 
footholds  in  foreign  markets 
include  the  formation  of  wholly 
owned  subsidiaries  such  as 
Safetynet  France  SA  and  the  use 
of  franchising  agreements  with 
such  companies  as  Cominvest  in 
Denmark,  GMI  in  Italy  and 


secondly,  it  can  concentrate 
exclusively  on  potential  partners 
that  have  an  existing  coverage  of 
the  target  market.  Both  factors 
can  be  achieved  without  the 
very  high  capital  outflows  and 
problems  of  cultural  integration 
inherent  in  an  aggressive 
acquisition  strategy.  Although 
the  company  is  willing  to 
contemplate  partnership 
agreements,  it  does  not  intend  to 
use  acquisition  to  achieve 
geographic  expansion. 


INPUT 


e>  1991  by  INPUT.  Reproduction  prohibited. 


February  1991 


Service  Update 


3 


Financial  Performance 

Exhibit  C illustrates  the  revenue 
growth  of  Safetynet, 
complemented  by  the  pre-tax 
profit  figures  shown  in  Exhibit 
D.  The  compan/s  very  healthy 
revenue  growth  figures  can 
partially  be  explained  by  the  fact 
that  it  is  competing  in  a market 
that  is  in  a high  growth  phase  of 
its  lifecycle:  ETPUT  estimates 
that  the  European  disaster 
recovery  market  will  grow  by 
25%  between  1990  and  1995. 
However,  the  inherent  financial 
strength  of  Safetynet  is  indicated 
by  the  pre-tax  profit  margin. 
Excluding  the  first  year  of 
operations,  the  profit  margin  has 
never  fallen  below  22%.  These 
figures  have  been  returned 
despite  a significant  investment 
programme  in  new  hardware  of 
over  £1  million  at  the  end  of 
1990. 

The  company's  impressive 
financial  record  indicates  the 
returns  that  can  be  made  within 
the  disaster  recovery  market  by 
adopting  and  executing  a well 
considered  strategy. 

The  Services 

Disaster  Recovery 

The  disaster  recovery  service 
obviously  lies  at  the  core  of 
Safetynet's  activities.  The 
company  stresses  that  it  is  not 
simply  in  the  business  of 
supplying  replacement 
equipment  in  the  event  of  a 
disaster.  A full  range  of  services 
are  offered,  including  active 
disaster  prevention  programmes 
and  disaster  contingency 
planning  and  implementation. 


Exhibit  C 

Turnover  and  Revenue  Growth 
1987-1991 


Exhibit  D 


Pre-Tax  Profits 
1987-1991 


87  88  89  90  91 


Continued  on  next  page 


Febmary  1991 


© 1991  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 
4 


Safetynet.  . .from  page  3 

The  constituent  elements  of  the 
disaster  recovery  service  are 
listed  in  Exhibit  E. 

• Prevent.  This  element  of  the 
service  is  designed  to  achieve 
two  key  objectives: 

- To  ensure  that  a disaster 
recovery  plan  is  in  place. 
Safetynet's  own  research 
indicates  that  up  to  60%  of 
users  now  have  some  form 
of  disaster  recovery  plan, 
which  is  largely  influenced 
by  legal  requirements 
within  the  financial  services 
industry  and  by  the  interest 
of  auditors  in  the  subject. 


The  existence  of  a properly 
considered  plan  is  a pivotal 
factor  within  a disaster 
recovery  programme,  and 
Safetynet  therefore  puts 
considerable  emphasis  on 
assisting  clients  in  the 
development  of  such  plans. 

Of  equal  importance  to  the 
existence  of  a disaster 
recovery  plan  is  the  atten- 
tion that  Safetynet  pays  to 
the  area  of  disaster  preven- 
tion. Risk  assessment  and 
preventative  planning  are 
considered  by  the  company 
to  be  intrinsic  elements  of  a 
complete  disaster  recovery 
service. 


Prepare.  If  a disaster  recovery 
programme  is  to  meet  the 
requirements  of  the  client,  the 
plan  should  be  tested  on  a 
regular  basis  to  ensure  that  it 
will  work  in  practise.  The 
inability  to  activate  the  plan 
in  the  event  of  a disaster 
could  be  fatal  to  a business. 
However,  Safetynet's 
research  indicates  that  up  to 
43%  of  users  who  have  a 
disaster  recovery  plan  in 
place  have  never  tested  it. 
Testing  is  therefore  regarded 
as  a key  element  of  the 
Safetynet  service. 

Cure.  The  service  provided  to 
clients  in  the  event  of  a 
disaster  is  twofold: 


Exhibit  E 


The  Complete  Disaster  Recovery  Package 


The  Disaster 
Recovery  Programme 


Maintain 


Ongoing  updating 
of  planning  and 
prevention 
methodologies 


• Office  facilities 

• Full  technical 
support 

• 24-hour 
coverage 


Prevent 


Contingency 
planning  and 
risk  assessment 


Prepare 


Testing  of 

recovery 

plans 


Cure 


Provision  of 
complete 
backup 
facilities 


Hardware 


INPUT 


© 1991  by  INPUT.  Reproducticxi  prohibited. 


February  1991 


- A systems  platfomi  is  made 
available  that  can  be  ac- 
cessed either  through  office 
suites  in  Safetynet's  Recov- 
ery Centres  or  through  the 
use  of  dial-up  telecommuni- 
cations links  from  the 
Recovery  Centre  to  the 
client's  own  premises.  The 
company  has  an  average  of 
between  20  and  30  contracts 
per  system,  with  a ceiling  of 
50,  and  it  estimates  that  the 
probability  of  failing  to 
have  a system  available  to 
meet  contractual  obliga- 
tions is  approximately  1 in 

2 million. 

- Safetynet  offers  technical 
expertise  both  in  an  overall 
support  capacity  and,  more 
specifically,  to  assist  in  the 
restoration  of  full  systems 
availability,  including  the 
rebuilding  of  databases. 

The  company  estimates 
that,  owing  to  the  infre- 
quency with  which  clients 
are  called  upon  to  perform 
complete  system  restores, 
the  operation  takes  an 
average  of  20  to  30  hours 
for  a midrange  system. 
Safetynet,  however,  per- 
forms such  operations  very 
regularly  and  maintains  an 
average  of  approximately 
six  hours. 

• Maintain.  Safetynet  has  a 
programme  of  reviewing 
both  the  contingency  and 
preventative  plans  of  its 
clients,  to  facilitate  the  on- 
going application  of  technical 
developments  to  the  service 
supplied.  This  element  of  the 
service  package  clearly 
illustrates  the  importance  that 
Safetynet  attaches  to 


maintaining  strong  client 
relationships. 

Telenet  Security 

Telenet  is  complementary  to  the 
core  product  and  supports  the 
disaster  prevention  services 
offered  by  Safetynet.  In 
response  to  research  findings 
indicating  that  up  to  82%  of 
users  use  unattended  systems, 
the  company  has  introduced  a 
product  that  detects  power 
spikes,  temperature  fluctuations, 
and  the  presence  of  water  and 
smoke.  Telenet  alerts  a 24-hour 
monitoring  service  to  allow 
appropriate  action  to  be  taken 
and  will  also,  in  the  case  of  the 
AS/400,  activate  the  automatic 
power  down  procedure.  The 
use  of  such  a product  limits  the 
scale  of  a potential  disaster 
affecting  unattended  or  remote 
locations. 

Consultancy  Services 

Saftynet's  consultancy  services 
are  principally  designed  to 
reduce  companies'  exposure  to 
risks  potentially  able  to  affect 
severely  the  operation  of 
computer  systems.  In  addition 
to  offering  assistance  in  the 
prevention  of  the  more  dramatic 
disasters  traditionally  associated 
with  disaster  recovery,  such  as 
fire  and  flood,  the  service  also 
encompasses  such  elements  as 
computer  fraud  and  crime 
prevention  and  consideration  of 
the  impact  of  hardware  and 
software  problems. 


Strategic  Opportunities 

Safetynet  has  placed  itself  in  a 
position  where  it  is  able  to 


pursue  a number  of  strategic 
opportunities.  The  provision  of 
a premium  disaster  recovery 
service  has  necessitated  the 
development  of  technical 
excellence  in  the  areas  of 
systems  operations  and  support. 
The  need  to  maintain  systems 
within  the  company's  Recovery 
Centres  at  current  revision  levels 
also  implies  the  ability  to 
assimilate  rapidly  new  technical 
developments  and  issues. 

The  breadth  and  depth  of 
technical  skills  developed  by 
Safetynet  on  the  IBM  midrange 
products  provides  a strong  base 
from  which  to  attack  many  of 
the  markets  within  both  the 
customer  services  and 
professional  services  arenas. 

The  company  possesses  the 
knowledge  and  expertise  to 
provide  systems  software 
support  and  training  and  is 
extremely  well  placed  to 
compete  effectively  in  the  area 
of  environmental  services 
consultancy.  A further  logical 
progression  would  be  f o move 
into  the  systems  operations  and 
facilities  management  market, 
which  complements  both  the 
company's  operational  expertise 
and  the  disaster  prevention 
service  currently  offered. 

It  is  clear  that  Safetynet  has  kept 
its  strategic  options  open.  It  will 
be  a very  interesting  company  to 
watch  in  order  to  assess  the 
degree  to  which  an  organisation 
possessing  both  strategic  vision 
and  highly  developed  technical 
expertise  is  able  to  expand  upon 
its  current  level  of  success. 


February  1991 


© 1991  by  INPUT,  fleprodudion  prohibited. 


INPUT 


Service  Update 


6 


❖ The  London  Financial  Times 
has  reported  that  IBM  is  to 
market  environmental 
consultancy  in  the  U.K. 
Services  offered  will  include 
assistance  with  policy 
formulation,  and  auditing 
and  measurement  services. 

❖ Further  to  our  article  on 
Thomainfor  in  last  month's 
Service  Update,  the  company 
has  announced  a partnership 
agreement  with  Norsk  Data. 
The  two  companies  are 
merging  their  European 
maintenance  operations,  with 
Thomainfor  taking  a majority 
stake  on  the  continent  and  a 


Snippets 

minority  holding  in  the  U.K. 
The  combined  European 
annual  service  revenues  of 
the  two  companies  will  be 
approximately  $300  million. 

❖ Safetynet  has  taken  on  14  of 
the  15  disaster  recovery 
contracts  held  by  the  Phoenix 
Disaster  Recovery  business  of 
the  U.K.'s  JB  A Computers 
Ltd,  although  Phoenix  will 
continue  to  provide 
consultancy  services. 

❖ Granada  Computer  Services 
has  announced  its  intention 
to  concentrate  on  larger 


contracts.  As  part  of  this 
development,  it  plans  to 
terminate  1,200  smaller 
contracts  and  to  transfer 
others  to  the  Microcare  and 
Granada  Microsystems 
subsidiaries  of  the  company. 

❖ It  appears  that  Strategem  has 
been  successful  in  its  bid  to 
acquire  Touchstone,  the  U.K. 
computer  services  company. 
The  bid  was  complicate  by 
the  existence  of  an  alternative 
offer  from  Getronics,  but 
Stratagem  now  claims  to  have 
control  of  54%  of 
Touchstone's  ordinary  shares. 


U.S.  Snippets 

GE  Computer  Services  offers 
repair  and  maintenance  services 
on  satellite  earth  station  and 
terminal  equipment.  Four 
different  levels  of  service  are 
offered;  On-site  Services,  which 
include  on-site  installation  and 
maintenance  service  for  satellite 
earth  stations,  communication 
equipment,  terminals  and 
printers;  Advanced  Exchange 
Service,  where  GE  will  ship 
overnight  a replacement  unit  in 


advance  of  receiving  the  failed 
unit;  Unit  Exchange  Service, 
where  a replacement  unit  is 
shipped  within  eight  hours  after 
receiving  the  failed  unit;  and 
Standard  Depot  Repair  Service, 
where  the  failed  units  are 
repaired,  refurbished,  and 
returned  within  five  days  of 
receipt. 

Apple  Computer  Corporation 
has  recently  initiated  a toll-free 
customer  assistance  line  called 


the  Customer  Assistance  Centre. 
The  line,  an  800  number,  is  not 
designed  to  be  a technical 
hotline,  but  rather  a backup  for 
sales  and  support  problems  that 
have  not  been  received  by  Apple 
resellers  and  dealers. 

Wang  Laboratories  has 
consolidated  its  service  offerings 
under  one  comprehensive 
programme  called  Life  Cycle 
Services.  None  of  these  services 
is  new;  Wang's  objective  is  to 
"have  everybody  aware  that  we 
offer  the  full  range  of  services". 
Services  can  be  purchased 
separately  or  as  a customised 
package,  and  include  maximum 
value  analysis,  feasibility 
studies,  sociotechnical  services, 
planning  and  analysis  services, 
cable  plant  services,  design 
services,  implantations  services, 
hardware  and  software  services, 
and  educational  services. 


INPUT 


0 1991  by  INPUT,  Reproduction  prohibited. 


Febojary  1991 


Service  Update 


Hewlett-Packard  has  enhanced 
its  Dealer  Premier  Support 
program,  adding  support 
assistance,  training,  warranty, 
and  subcontracting.  Previously, 
there  were  only  three  ways  a 
dealer  could  offer  support 
services  on  HP  equipment:  Sell 
HP  service  contracts  directly, 
service  the  equipment 
themselves,  or  subcontract  with 
HP  support  services.  The  latter 
allows  for  weekly  visits  from  HP 
representatives  for  the  repair  of 
warranted  products. 

Microsoft  Corporation  has 
announced  Microsoft  OnCall  for 
Microsoft  Basic,  a 900  number 
that  offers  support,  extended 
service  hours,  and  minimal  hold 
time.  Also,  newly  available  is  a 
support  line  called  Microsoft 
Quick-Basic,  for  clients  new  to 
the  systems  needing  entry-level 
assistance. 


Granada  Computer  Services 
Group  has  reorganised, 
removing  Conor  Kehoe  from  the 
position  of  chairman.  The  eight 
country  divisions  have  been 
consolidated  into  two:  Europe, 
headed  by  Peter  Edwards  and 
United  States,  headed  by  Art 
Baar.  The  two  directors  report 
to  the  new  chairman,  Derek 
Lewis. 

As  of  4 February  1991,  Phoenix 
Technologies  still  has  not 
finalised  the  purchase  of  TRW 
Customer  Services.  It  was 
indicated  that  there  are  final 
details  to  be  ironed  out  as  a 
result  of  the  merger.  Phoenix 
Technologies  fully  intends  to 
carry  through  the  deal,  although 
no  indication  was  given  as  to 
when  the  deal  will  be  finalised. 


7 

U.S.  User  Satisfaction 

The  following  charts  refer  to 
comparative  information  from 
the  U.S.  user  requirements 
studies  completed  in  1990.  The 
traditional  areas  of  system 
availability  and  response  time 
are  important  criteria  for  the 
user  evaluation  of  their  service 
vendor. 

For  full  information  regarding 
the  user  sample  and  other 
information  on  the  vendor's 
service,  refer  to  the  reports: 

• U.S.  Large  System  User 
Requirements. 

• U.S.  Midrange  System  User 
Requirements. 

• PC  / Workstation  System 
Requirements,  m 


Exhibit  F 


U.S.  Midrange  Systems  User  Satisfaction 
System  Availability 


Percent 

Mean 

Required 

Percent 

Mean 

Received 

Difference 

Percent 

Satisfied 

Concurrent 

94.1 

97.2 

-3.1 

70 

Data  General 

96.7 

97.4 

-0.7 

61 

Digital 

97.2 

96.6 

0.6 

65 

Hewlett-Packard 

98.4 

97.8 

0.6 

77 

IBM 

98.1 

97.8 

0.3 

81 

All  Midrange 
Systems 

96.8 

97.3 

-0.5 

69 

Overall  Sample:  109  users 


February  1991 


© 1991  by  INPUT.  Reproduction  prohibited. 


INPUT 


About  INPUT 


U.S.  PC/Workstation  User  Satisfaction 
System  Availability 


Percent 

Mean 

Required 

Percent 

Mean 

Received 

Difference 

Percent 

Satisfied 

Apollo 

96.1 

96.1 

0 

56 

IBM 

96.2 

96.5 

-0.3 

50 

Sun 

96.5 

94.3 

2.2 

33 

All  Other  Systems 

95.7 

94.3 

1.4 

58 

All  PC/Workstation 
Systems 

96.1 

95.2 

0.9 

48 

Overall  Sample:  53  users 


Exhibit  H 

U.S.  PC/Workstation  User  Satisfaction 
System  Availability 


INPUT  OFFICES 


Percent 

Mean 

Required 

Percent 

Mean 

Received 

Difference 

Percent 

Satisfied 

Amdahl 

98.8 

99.1 

-0.3 

79 

Bull  HN 

97.9 

98.5 

-0.6 

79 

CDC 

97.6 

96.6 

1.0 

55 

IBM 

98.7 

98.2 

0.5 

71 

NCR 

98.0 

95.8 

2.2 

48 

All  Large 
Systems 

98.3 

97.7 

0.6 

66 

Overall  Sample:  98  users 


INPUT  Service  Update — A publication  of  INPUT’S  Customer  Service  Programme — International 
INPUT  Service  Update  is  published  monthly  by  INPUT,  1280  Villa  Street,  MountainView,  CA  94041  U.S.A. , Tel.  (415)  961-3300  in 
conjunction  with  INPUT  LTD.,  Piccadilly  House,  33/37  Regent  Street,  London  SWl  Y 4NF,  England,  Tel.  (071)  493-9335. 
Copyright  © 1991  by  INPUT.  All  rights  reserved.  Reproduction  in  whole  or  in  part  without  permission  is  prohibited. 

LONDON  • PARIS  • FRANKFURT  • TOKYO  • SAN  FRANCISCO  • NEW  YORK  • WASHINGTON  D.C 


February  1991 


Route: 


INPUT 

Service 

Update 


© INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — International 

March  1991 


IN 

1 . 

...Sun  Microsystems — Life  After  Hardware  Maintenance? 

THIS 

6. 

...DEC  Announces  Subsidiary  in  Eastern  Europe 

ISSUE: 

6. 

...Q&A 

7. 

...Snippets 

ii«S  a a 

Sun  Microsystems 

Life  After  Hardware  Maintenance? 


The  recent  and  dramatic 
emergence  of  Sun 
Microsystems  as  a major  force 
within  the  European  computer 
industry  is  well  known.  What  is 
less  well  known  is  the  degree  to 
which  the  company  has  t^en  able 
to  develop  a customer  service 
product  that  addresses  many  of 
the  challenges  currently  facing  the 
service  provider.  A review  of  the 
company's  service  operation 
provides  an  opportunity  to  assess 
an  approach  that  has  taken 
advantage  of  the  opportunities 
within  the  market  to  develop  a 
successful  service  business. 

Sun's  service  product  differs  in 
many  important  respects  from 
that  offered  by  other  companies 
within  the  industry  that  have 
been  established  for  a longer 
period  of  time.  The  purpose  of 
this  article  is  to  highlight  these 
differences  and  to  provide  an 
insight  into  the  strategic  approach 
adopted  by  Sun. 


The  Customer’s  Needs 

The  systems  product  marketed  by 
the  company  provides  a good 
example  of  the  extent  to  which  the 
concentration  of  service  effort  is 
evolving  from  hardware  mainte- 
nance to  software  support. 
Although  the  equipment  is 
technologically  complex  and 
innovative,  it  is  highly  modular  in 
construction.  Additionally,  the 
use  of  workstations  and  servers 
implies  that,  with  the  exception  of 
the  server  itself,  the  system  is 
comparatively  resilient  to  compo- 
nent failure.  The  company 
estimates  that,  although  custom- 
ers regard  systems  uptime  as  an 
issue,  it  is  not  of  such  critical 
importance  as  it  is  for  traditional 
mini -computer  users. 

The  combination  of  these  factors 
implies  that  the  hardware  mainte- 
nance operation  has  become  a 
largely  routine  activity. 

However,  the  systems  software 
platform  is  technically  complex 


and  requires  highly  developed 
skills  on  the  part  of  the  support 
staff.  The  issue  is  not  the  use  of 
UNIX,  which  the  company 
regards  as  presenting  a similar 
challenge  to  that  posed  by  a 
typical  minicomputer  operating 
system.  The  principal  problem  is 
caused  by  the  standard  use  of 
networking  technology  across  the 
systems  range,  which  requires  the 
ability  to  provide  software  and 
networking  support  and 
consultancy  to  ensure  that  opti- 
mum systems  performance  is 
maintained. 

The  major  challenge  facing  Sun 
was  to  design  a service  product 
that  met  the  relative  ne^s  of  the 
customer  while  taking  into 
account  the  fact  that  the  design  of 
the  hardware  was  not  going  to 
provide  the  company  with  the 
opportunity  to  earn  significant 
revenues  through  the  hardware 
maintenance  activity.  It  should  be 

Coniinued  on  next  page 


Service  Update 


2 


noted  that  the  short  history  of  the 
company  enabled  it  to  develop  a 
service  product  to  meet  current 
market  requirements  rather  than 
having  to  adjust  a well-estab- 
lished traditional  customer 
services  structure. 

The  Business 

Exhibit  A lists  the  revenue  earn- 
ing channels  of  the  company's 
customer  services  organisation. 
Although  not  dissimilar  in  struc- 
ture from  that  adopted  by  many 
companies  within  the  industry, 
the  relative  emphasis  placed  upon 
the  constituent  products  is  sul> 
stantially  different.  The  major 
focus  is  on  the  professional 
services  arm  of  the  business, 
which  is  considered  to  be  the 
product  providing  the  greatest 
future  opportunity. 

Professional  Services.  Perhaps  the 
most  significant  point  to  emerge 
from  the  offerings  of  the  profes- 
sional services  channel  is  the 
stress  put  on  UNIX  and  network- 
ing consultancy  as  a customer 


services  activity.  It  is  commonly 
accepted  that  consultancy  is  one 
of  the  main  products  of  the 
environmental  services  channel. 

It  is  somewhat  less  common  to 
find  a company  that  regards 
consultancy  as  a key  factor  within 
a crucial  area  of  the  business.  The 
emphasis  of  the  professional 
services  activity  is  on  the 
company's  software  products  and 
further  illustrates  the  fact  that 
software  support  is  at  the  heart  of 
Sun's  services  offering. 

Education.  In  addition  to  provid- 
ing the  range  of  services  that 
would  commonly  be  cxp>ected 
from  an  equipment  vendor's 
education  department,  this 
channel  provides  a good  example 
of  the  use  of  a key  element  of  the 
company's  customer  services 
strategy — namely,  the  importance 
placed  on  outsourcing.  Two  of 
the  stated  responsibilities  of  the 
education  department  are  to  sell 
courseware  and  to  recruit  external 
authorised  trainers.  The  develop- 
ment of  multimedia  training  tools 
provides  a considerable  oppxjrtu- 
nity  to  channel  the  training 


expertise  of  the  company  through 
external  partners. 

The  Installed  Base  Group.  The 
purpose  of  this  group  is  to  supply 
technical  exjaertise  to  assist  both 
the  direct  and  the  channel  support 
sales  forces  in  the  ongoing  sup- 
port of  existing  customers.  In 
addition  to  ensuring  that  ad- 
equate logistical  support  is 
provided  to  third-party  sales 
channels,  advice  is  also  provided 
to  ensure  that  customers  are 
provided  with  technically  viable 
equipment  upgrades.  Research 
findings  from  INPUT  suggest  that 
the  failure  on  the  part  of  equip- 
ment vendors  to  adequately 
support  older  equipment  is  a 
significant  source  of  dissatisfac- 
tion among  users.  Providing  a 
technically  competent  support 
team  from  within  the  customer 
services  organisation  is  one  way 
of  ensuring  that  the  needs  of 
existing  customers  are  satisfied  on 
an  ongoing  basis. 

Support  Services.  The  means  by 
which  hardware  and  software 
support  is  provided  is  illustrated 
in  Exhibit  B.  The  use  of  a tele- 


Exhibit  A 

The  Service  Product 

Support 

Services 

Professional 

Services 

Education 

Installed 

Base  Group 

• Hardware  Support 

• Software  Support 

- UNIX  support 

- Network  support 

- Systems 
administration 

- Systems  tuning 

• Networking 

- Design 

- Installation 

- Management 

• Software 

- Consultancy 

- Device  drivers 

- Gateways 

- General  purpose 

• UNIX/Net  working 

- User 

- Systems 
administration 

• Programming 

• Selling  Courseware 

• Authorised  Trainers 

- Outsourcing 

• Multimedia 

• Direct  Sales 

- Upgrades 

- Spares 

• Channel  Support 

- Spares 

INPUT 

01991  by  INPUT. 

Reproduction  prohlbHed. 

March  1991 

3 


Exhibit  B 


Service  Delivery  Method 


phone  helpline  as  the  primary 
means  of  providing  software 
support  is  a tactic  adopted  by  the 
majority  of  equipment  vendors. 
However,  the  additional  three 
levels  of  hardware  service  illus- 

March 1991 


trate  the  particular  approach  that 
Sun  is  adopting  for  the  provision 
of  service. 

The  hardware  support  group  is 
the  one  area  of  hardware  service 
exclusively  provided  by  Sun 

C 1991  by  INPUT.  Reproduction  pfohibited. 


employees.  It  is  intended  to 
concentrate  in-house  expertise 
within  a specialist  support  group 
working  closely  with  the  parallel 
software  support  group  to  pro- 

Continued  on  next  page 

INPUT 


Service  Update 


Sun 


. from  page  3 


Exhibit  C 


vide  expert  cover  for 
escalated  problems. 

1 he  company  has 
identified  the  very 
different  areas  of 
expertise  required  to 
support  the  two 
levels  of  hardware 
field  support.  In  the 
case  of  user  interface 
units  (keyboards, 
monitors  and  mice), 
faulty  de\’ices  are 
simply  replaced.  The 
key  criterion  by 
which  the  quality  of 
this  aspect  of  the 
operation  is  judged  is 
the  speed  of  delivery. 

Although  the  repre- 
sentative of  the 

service  provider  will  actually  fit 
the  new  unit,  the  expertise  re- 
quired is  principally  in  distribu- 
tion. Sun  will  therefore  employ 
third-party  courier  companies 
that  possess  more  highly  devel- 
oped distribution  skills  than  Sun 
itself  can  offer. 

1 he  use  of  service  partners  to 
replace  parts  at  the  component 
lev'el  is  a logical  extension  of  the 
same  approach.  In  this  instance, 
the  principal  factor  governing  the 
quality  of  service  is  the  speed  and 
efficiency  with  which  the  repair  is 
effected.  Although  speed  of 
transportation  is  obviously 
important,  the  critical  factor  is  the 
ability  to  maintain  i quality  of 
service  that  meets  the  needs  of  the 
customer.  This  level  of  service 
therefore  demands  a degree  of 
engineering  ability;  Sun  uses  the 
term  "Service  Partner"  to  describe 
independent  maintenance  compa- 
nies that  can  consistently  meet  the 
technical  demands  placed  upon 
them.  Sun  will  increasingly  use 
such  companies  in  the  future. 


INPUT 


The  Emerging  Role  of  the  Field  Engineer 


Field  Engineer 


UNIX 

Networking 


Consultancy 


The  Service  Concept 

The  service  concept  currently 
being  adopted  by  Sun  is  essen- 
tially ‘summarised  by  the 
following  phrase: 

"Find  the  people  with  the  expertise 
and  use  them." 

The  strategy  adopted  by  the 
company  in  pursuit  of  this  aim 
can  be  divided  into  two 
components. 

Outsourcing.  An  indication  of  the 
extent  to  which  Sun  will  contract 
elements  of  its  service  package  to 
third  parties  has  been  provided 
by  the  analysis  of  the  products 
offered.  This  approach  is  being 
adopted  quite  deliberately  by  Sun 
to  satisfy  two  key  requirements. 

In  the  first  instance,  the  company 
has  adopted  the  "core  compe- 
tence" approach  to  achieve  the 
level  of  quality  required  of  its 
service  business.  The  overall  goal 
of  the  business  is  maintenance  of 
the  customer's  IT  investment  at  an 
optimum  level  of  performance. 

'Vi  thin  this  overall  objective. 

Sun's  core  competence  is  the 
ability  to  satisfy  the  technically 

© 1991  by  INPUT.  Rsproduction  prohibited. 


complex  requirements  of  the 
customer  in  terms  of  both 
consultancy  and  problem  resolu- 
tion. However,  it  would  not 
pretend  to  offer  great  expertise  in, 
for  example,  the  business  of  parts 
distribution.  By  developing 
partnership  agreements.  Sun  has 
allowed  its  service  partners  to 
capitalise  upon  their  own  particu- 
lar areas  of  expertise,  thereby 
maximising  the  quality  of  the 
overall  service  package. 

The  second  requirement  deter- 
mining the  adoption  of  a strategy 
of  outsourcing  is  the  level  of 
flexibility  offered  by  the  ap- 
proach. The  future  needs  of  the 
business  can  be  met  more  rapidly 
and  effectively  by  developing 
partnerships  with  companies  with 
existing  levels  of  expertise  rather 
than  attempting  to  develop  skills 
internally. 

Although  the  company  attaches 
much  importance  to  outsourcing 
activities  that  can  be  provided 
more  efficiently  by  external 
suppliers,  it  should  be  stressed 
that  Sun  retains  total  responsibil- 
ity for  the  delivery  of  the  total 

March  1991 


5 


service  to  the  customer.  All  fault 
calls  pass  through  the  company's 
Answer  Centre  and  Sun  maintains 
ultimate  control  of  all  aspects  of 
service. 

Professional  Services.  As  has  been 
indicated,  the  company  regards 
professional  services  as  the  key 
element  of  its  service  product, 
both  in  terms  of  future  growth 
prospects  and  because  it  is  the 
area  of  core  competence.  A 
principal  factor  that  illustrates 
this  importance  is  the  emerging 
role  of  the  company's  engineering 
staff,  as  shown  in  Exhibit  C. 

Sun  has  been  able  to  develop  a 
range  of  skills  within  its  engineer- 
ing force  because  of  the  demands 
of  the  business  and  because  of  the 
comparative  youth  of  the  com- 
pany. The  range  of  services 


offered  by  Sun,  combined  with 
the  need  to  manage  its  extensive 
outsourcing  commitment,  has 
enabled  the  company  to  offer  a 
much  more  vari^  technical 
career  path  than  that  provided  by 
many  of  its  competitors.  The 
youth  of  the  company  has  facili- 
tated the  development  of  a service 
product  to  satisfy  current  demand 
without  having  to  change  the 
mode  of  operation  of  the  tradi- 
tional field  engineering  structure. 

Although  the  company  does 
distinguish  between  hardware 
and  software  support  staff,  the 
fact  that  engineering  personnel 
have  developed  a breadth  of 
support  skills  substantially 
reduces  the  requirement  to 
maintain  separate  functional 
responsibilities,  thereby  increas- 


ing the  company's  ojaerational 
flexibility. 

Satisfying  Demand 

The  constituent  elements  of 
Sun's  customer  services  product 
are  summarised  in  Exhibit  D. 
The  principal  factors  underpin- 
ning the  success  of  the  product 
are  as  follows: 

• The  service  provided  by  Sun 
is  strongly  oriented  towards 
software  support,  network 
support  and  consultancy.  In 
order  to  satisfy  the  supf)ort 
requirements  of  customers 
operating  complex  systems 
software  platforms,  it  is  clear 
that  the  customer  services 
operation  is  being  increas- 
ingly expected  to  offer  profes- 
sional services  solutions. 


Exhibit  D 


The  Customer  Services  Product 


Systems 

Engineering 


Hardware 

Maintenance  Network 
Support 


Professional 
Services 


T 


Outsourced 
Field  Maintenance 


The 

Customer 


Continued  on  next  page 

INPUT 


March  1991 


O 1991  by  INPUT.  Reproduction  prohiblled. 


6 


Sun  ..  .from  pages 


• Sun's  ability  to  develop  engi- 
neering staff  into  systems 
engineers  possessing  both 
broad  problem  solving  and 
consultancy  skills  provides 
operational  flexibility  signifi- 
cantly in  advance  of  companies 
that  maintain  separate  hard- 
ware and  software  suppK)rt 
activities. 


• The  strategic  development  of 
outsourcing  and  the  concept  of 
core  competence  allows  Sun  to 
focus  on  key  areas  of  the 
business  and  to  provide  high- 
quality  total  service  that  is 
efficient  and  flexible. 

Sun  provides  a good  example  of 
the  extent  to  which  the  service 
requirements  of  the  customer  and 


the  demands  of  the  environment 
are  shaping  the  customer  services 
business.  Sun  has  responded  to 
the  challenge  by  developing  a 
clearly  defined  strategy  which, 
although  elegant  in  its  simplicity, 
is  indicative  of  the  significant 
change  that  can  be  expected 
across  the  industry.  ■ 


DEC  Announces  Subsidiary 
in  Eastern  Europe 


Dec  has  announced  the 
opening  of  a subsidiary 
operation  in  Czechoslovakia,  and 
the  signing  of  agreements  with 
three  Czechoslovakian  companies 
to  sell  and  service  computer 
systems  and  solutions  in 
Czechoslovakia. 


DEC  has  made  a series  of  invest- 
ments in  the  emerging  markets  of 
Central  and  Eastern  Europ>e.  The 
establishment  of  a presence  in 
Eastern  Europe  began  in  1990, 
with  the  formation  of  a joint 
venture  in  Hungary.  Since  then. 


DEC  has  taken  a multifaceted 
approach  to  the  opportunities 
created  by  the  unification  of 
Germany. 

DEC'S  Czechoslovakian  head- 
quarters is  being  established  in 
Prague,  with  plans  to  open  an 
office  in  Bratislava  in  the  fall  of 
1991.  ■ 


Q&A 

Q:  What  remote  support  is 
available  from  Bell  Atlantic 
Business  Systems  Services  for  the 
IBM  3090? 

A:  The  3090  remote  support 
feature  is  different  from  that  of 
the  other  IBM  mainframes  (i.e., 
4300  and  308X).  When  the  system 
identifies  a problem,  it  "calls 
home"  to  the  support  center  in 
Frazer,  PA. 

The  IBM  3083  CPU  receives  the 
call,  and  central  dispatch  is 
notified. 

1 . An  FE  is  dispatched  to  the  site, 
if  one  is  not  there  already. 

2.  The  National  Support  Organi- 
zation for  IBM  products  is 
notified.  It  extracts  data  from 
the  Frazer  3083  system  pertain- 

INPUT 


ing  to  the  problem,  and  details 
a course  of  action. 

The  account  is  then  contacted  to 
discuss  the  problem  with  the  FE 
(assigned  on-site)  or  the  customer, 
and  an  appropriate  course  of 
action  is  determined. 

All  IBM  3090  systems  have  the 
"call  home"  feature  built  into 
them.  Bell  Atlantic  BSS  did  an  in- 
depth  development  effort  to  bring 
its  "call  home"  system  to  market. 

A service  processor  monitors  the 
3090  for  error  conditions,  and 
when  certain  threshold  conditions 
are  exceeded,  the  processor 
analyzes  it  and  initiates  the  call  to 
the  Frazer  facility. 

Q:  What  are  Bull's  policies  for 
servicing  Printronix  printers? 

A:  Bull  is  the  exclusive  national 
service  subcontractor  for 
Printronix,  and  has  been  for  seven 

© 1991  by  INPUT.  Reproduction  prohibited. 


years.  There  is  an  installed  base 
of  10,000  printers  that  Bull  ser- 
vices nationally.  Coverage  is  as 
follows: 

• Standard,  Monday-Friday,  8 
am  to  6 pm 

• Monday-Friday,  8 am  to  12 
midnight  (additional  30%  over 
standard) 

• Seven  days  a week,  24  hours  a 
day  (additional  50%  over 
standard) 

• Standard  plus  Saturday,  8 am 
to  6 pm  (additional  10%) 

- Over  10  hours  on  a Satur- 
day (additional  20%) 

• Standard  plus  Sunday,  8 am  to 
6 pm  (additional  10%) 

- Over  10  hours  on  a Sunday 
(additional  20%) 


March  1991 


7 


Snippets 


Ferrari  Holdings  PLC,  the  U.K.  computer 
services  company,  has  gone  into  administrative 
receivership.  It  is  anticipated  that  the  receivers 
will  attempt  to  sell  the  constituent  elements  of 
the  company  separately  as  going  concerns. 

Barclays  Bank,  the  U.K.'s  largest  clearing  bank, 
has  created  a separate  company  (Barclays 
Computer  Operations)  for  its  IT  function.  The 
new  company  will  have  to  bid  for  all  work  from 
Barclays  and  will  be  free  to  comp>ete  on  the 
open  market  for  external  contracts.  The  pri- 
mary motive  for  the  move  is  to  reduce  costs  in 
an  attempt  to  see  improved  value  for  money 
from  IT  operations.  Development  work  is  not 
affected  by  the  move  and  will  remain  in-house. 

A U.K.  PC  maintenance  company — ATM, 
which  specialises  in  the  support  of  Novell 
Netware  LANs — is  offering  refunds  to  contract 
customers  when  it  fails  to  meet  fix  time  targets. 
Failure  to  solve  a problem  within  24  hours  of 
the  fault  call  results  in  a refund  to  the  customer 
of  £20;  an  ongoing  fault  can  be  refunded  to  a 
maximum  of  £100.  The  scheme  was  launched 
last  December  and,  to  date,  ATM  has  not  had  to 
part  with  any  cash! 

In  order  to  meet  tine  needs  of  its  growing 
numbers  of  international  customers,  Fujitsu  has 


established  an  International  Customer  Support, 
Centre  in  Spain.  The  principal  activities  of  the 
centre  are  systems  engineering  support,  research 
for  international  systems  products,  development 
of  systems  engineering  tools,  and  international 
educational  course  development. 

❖ Unisys  has  won  a "not  insignificant"  TPM 
contract  to  maintain  all  the  third-party  equip- 
ment in  McDonald's  restaurants  located  in 
southern  England.  Unisys  has  stated  that  it  has 
no  intention  of  making  a large-scale  move  into 
the  indep>endent  maintenance  market,  but  will 
restrict  its  TPM  activities  to  strategically 
important  customers. 

❖ The  U.K.  Star  Computer  Group  has  sold  its 
independent  maintenance  company.  Star  Com- 
puter Services,  to  Misys  PLC  for  £2.7  million. 

The  deal  has  resulted  in  the  merging  of  the 
maintenance  company  with  Misys'  own 
maintenance  operation,  TIS. 

❖ In  February  1991,  Novadyne  Computer  Systems, 
Inc.  released  a new  on-line  system  diagnostics 
and  disk  utility  called  System  On-Line 
Maintenance  Executive  (SOME).  It  provides 
transparent,  remote  disk  error  correction  for  its 
REALITY®  line  of  mini  and  supermini  computer 
systems. 


Q&A  Continued 


Response  times  are  next  day,  4 
hours,  and  2 hours.  There  is  also 
the  option  of  having  a dedicated 
on-site  technician. 

Previously,  the  warranty  was  for 
return  to  manufacturer  only,  and 
there  was  no  warranty  at  all  for 
dot  matrix  units.  Now,  there  is  a 
90-day  on-site  warranty,  but  it’s 
only  available  through  the 
Printonix  distributor  network,  not 
through  OEMs  or  VARs.  There 
are  12  distributors,  but  they  do 
not  have  full  nationwide  service 
capabilities.  This  is  where  Bull 
steps  in.  It  does  a per-incident 


repair,  billed  back  to  Printronix. 
There  is  no  depot  repair  available. 
Bull  has  200  service  locations  in 
the  United  States. 


necessary  to  get  the  unit  installed 
and  working.  Bull  does  not  bill 
Printronix  or  the  customer  for  the 
replacement  parts. 


Time  and  materials  rates  for 
Printronix  printer  repair  range 
from  $95/hour  (8  am  to  6 pm, 
Monday-Friday)  to  $11 4/hour  for 
outside  standard  hours.  There  is 
no  minimum  charge  for  time  and 
material  calls. 


Installation  varies  by  product  line, 
ranging  from  $268  for  high-end 
units  to  $230  for  low-end  ma- 
chines. Bull  also  includes  parts  if 
there  is  a faulty  part  or  cable.  Bull 
states  that  it  will  do  whateverds  n 


© 1991  by  INPUT.  Reproduction  prohlbhod. 


Q:  What  are  Bell  Atlantic 
Business  Systems  Services 
offerings  in  Canada? 

A:  Bell  Atlantic  BSS  Canada 
supports  AS/400,  DEXTRA  and 
MAXWATCH.  There  is  no 
helpdesk  and  it  does  not  support 
microcomputers  in  Canada. 
Focus  is  on  IBM,  DEC,  and 
Xerox.  ■ 


■'  /'.T 


'-.'i  '•'•.1  '."'l 


INPUT 


March  1991 


About  INPUT 


INPUT  provides  planning  information,  analysis,  and  recommendations  for  the 
information  technology  industries.  Through  market  research,  technology 
forecasting,  and  competitive  analysis,  INPUT  supports  client  management  in 
making  informed  decisions. 

Subscription  services,  proprietary  research/consulting,  merger/acquisition 
assistance,  and  multiclient  studies  are  provided  to  users  and  vendors  of  information 
systems  and  services.  INPUT  specializes  in  the  software  and  services  industry 
which  includes  software  products,  systems  operations,  processing  services,  network 
services,  systems  integration,  professional  services,  turnkey  systems,  and  customer 
services.  Particular  areas  of  expertise  include  CASE  analysis,  information  systems 
planning,  and  outsourcing. 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialization.  Most  have  held  senior  management 
positions  in  operations,  marketing,  or  planning.  This  expertise  enables  INPUT  to 
supply  practical  solutions  to  complex  business  problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a leading 
international  research  and  consulting  firm.  Clients  include  more  than  100  of  the 
world's  largest  and  most  technically  advanced  companies. 


INPUT  OFFICES 


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Mountain  View,  CA  94041-1194 

Tei.  (415)  961-3300  Fax  (415)  961-3966 

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International 

London 
INPUT  LTD. 

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Tel.  (0)  6447-7229  Fax  (0)  6447-7327 

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INPUT  KK 

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Route; 


INPUT 

Service 

Update 


© INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — International 

April  1991 


Norsk  Data  - A Study  in  Radical  Change 


Norsk  Data,  the  Norwegian 
IT  supplier,  has  recently 
attracted  considerable  interest  as 
a result  of  the  joint  venture  it 
has  established  with 
Thomainfor,  the  French-based 
independent  maintenance 
company.  This  month.  Service 
Update  is  looking  at  the  details 
of  the  partnership  and  the 
strategic  thinking  that  led  to  the 
venture. 

The  Move  Towards 

Multivendor 

Maintenance 

Multivendor  maintenance  is 
being  increasingly  adopted  by 
equipment  manufacturers  in 
response  to  perceived  demand 
from  customers  and  as  a defence 
against  the  activities  of  the 
independent  sector.  Companies 
such  as  Digital,  Unisys,  Hewlett- 
Packard  and  Wang  all  include 
multivendor  maintenance  in 
their  portfolios  of  customer 


service  products.  However,  the 
company  that  has  attacked  the 
market  with  the  greatest 
aggression  is  Olivetti  (please 
refer  to  Service  Update, 
December  1990),  which  has 
realised  very  considerable 
benefits  through  the 
development  of  a pan-European 
multivendor  service  business. 
Norsk  Data,  too,  sees 
considerable  benefits  to  be 
gained  through  the  possession 
of  a comprehensive  multivendor 
service  business.  However,  the 
company  is  in  the  process  of 
adopting  a rapid,  perhaps  even 
revolutionary,  change  in  its 
strategic  direction,  and  the  move 
into  multivendor  maintenance 
must  be  seen  as  an  important 
element  of  this  new  strategy. 

The  Company 

Exhibits  A and  B summarise  the 
recent  financial  history  of  Norsk 
Data.  In  common  with  many 


companies  in  the  industry, 
reduced  margins  have  had  an 
adverse  effect  on  financial 
performance.  Norsk  has 
responded  to  the  changing 
market  conditions  by  focusing 
very  strongly  on  vertical 
markets,  particularly  central  and 
local  government  and 
publishing,  and  by  adopting 
open  systems  standards. 

However,  in  addition  to  these 
developments,  which  are  similar 
to  those  of  many  of  the 
company's  competitors,  the  U.K. 
operation  is  in  the  process  of 
r^efining  its  core  business.  The 
company  has  traditionally  been 
regarded  as  primarily  an 
equipment  vendor,  but  it  now 
regards  its  core  business  as  the 
provision  of  services  rather  than 
the  manufacture  of  equipment. 
Three  factors  account  for  this 
radical  change  of  emphasis; 


Continued  on  next  page 


Service  Update 


2 


Norsk. . . from  page  1 

• In  1990,  60%  of  Norsk's  U.K. 
revenues  were  derived  from 
services  and  40%  from 
hardware  sales.  Essentially, 
customer  demand  has 
dictated  what  the  core  of  the 
business  actually  is  and  the 
company  is  responding  to  the 
needs  of  the  customer. 

• In  addition  to  the  threat 
posed  to  equipment  vendors 
by  falling  hardware  prices, 
the  company  has 
acknowledged  the  need  to 
respond  aggressively  to  the 
negative  impact  on  revenues 
caused  by  the  stagnation  in 
growth  of  the  proprietary 
hardware  maintenance 
activity. 

• Norsk  sees  substantial 
growth  opportunities  in  the 
service  markets  of  Europe 
and  particularly  in 
Scandinavia. 

The  move  into  multivendor 
maintenance  is  the  first  major 
tactical  change  undertaken  in 
support  of  the  new  strategy. 

Why  Multivendor 
Maintenance? 

It  is  now  commonly  recognised 
within  the  industry  that 
renewr<l  focus  on  the  customer 
services  ousiness  is  required  in 
order  to  compensate  for  falling 
margins  from  both  hardware 
sales  and  hardware  maintenance 
revenues.  Companies  are 
actively  seeking  to  expand  their 
service  portfolios  and  to  enter 
high-growth  service  markets. 
What  were  the  factors  that 
encouraged  Norsk  to  move  so 
decisively  into  multivendor 
maintenance? 


INPUT 


O 1991  by  INPUT.  Reproduction  prohibited. 


Service  Update 


• Norsk  considers  that  there  is 
considerable  demand  for 
single-source  maintenance 
within  the  user  base.  Support 
for  this  assumption  is  drawn 
from  the  fact  that  the 
company  succeeded  in 
winning  a major  multivendor 
maintenance  contract  very 
shortly  after  launching  the 
service  and  that  the  prospect 
list  for  such  contracts  is 
significantly  more  valuable 
than  the  hardware  prospect 
list. 

• The  independent 
maintenance  market  in 
Scandinavia  is,  in  Norsk's 
opinion,  at  an  early  stage  of 
development.  The  third- 
party  maintenance  companies 
have  not  significantly 
penetrated  the  market,  which 
is  difficult  to  service 
profitably  owing  to  the 
geography  of  the  region. 

• Norsk's  U.K.  customer 
services  organisation  includes 
a body  of  engineers  who  were 


assimilated  into  the  company 
when  Norsk  acquired 
Wordplex  in  the  U.K.  The 
engineering  department 
therefore  possesses  the  range 
of  technical  and  logistical 
expertise  required  to  meet  the 
different  service  needs  of 
products  of  widely  varying 
technical  complexity.  The 
company  consequently 
already  has  the  appropriate 
balance  of  skills  required  to 
adapt  to  a multivendor 
servicing  operation. 

Although  Norsk  is  currently 
putting  considerable  emphasis 
on  the  development  of  its 
multivendor  maintenance 
service,  it  should  be  stressed 
that  this  service  is  only  the  first 
of  a range  of  planned  services 
targeted  at  network  service  and 
support. 

The  Thomainfor  Link 

Exhibit  C illustrates  the 
ownership  details  of  the  joint 
venture  between  Norsk  and 


Thomainfor  in  the  relevant 
European  markets.  In  the  U.K., 
the  Service  Team  operation  will 
be  managed  on  a day-to-day 
basis  by  Norsk,  while  in 
Benelux,  France  and 
Switzerland,  Thomainfor  is 
taking  over  the  entire  Norsk 
operation,  including  equipment 
and  software  sales. 

In  order  to  compete  effectively 
in  the  multivendor  maintenance 
market,  Norsk  determined  that 
it  needed  to  be  able  to 
demonstrate  the  following 
capabilities: 

• Technical  credibility  across  a 
wide  range  of  products. 

• Technical  expertise  on  a 
range  of  products. 

• Technical  support  capability. 

• An  organisation  that  has 
achieved  critical  mass  in 
terms  of  size  and  geographic 
coverage. 

Continued  on  next  page 


Norsk/Thomainfor  Joint  Venture 
The  Ownership  Details 


Country 

U.K. 

France, 

Benelux 

Switzerland 

Scandinavia 

Rest  of 
Europe 

Ownership  details 

Joint  venture 
Norsk  holds 
majority  stake 

Thomainfor 

100% 

Norsk 

100% 

No 

change 

Operational 

management 

responsibility 

Norsk 

Thomainfor 

Norsk 

No 

change 

Source:  INPUT 


April  1991 


O 1991  by  INPUT.  Reproduction  prohibited. 


INPUT 


4 


Norsk. . . from  page  3 

From  Norsk's  point  of  view,  the 
joint  venture  with  Thomainfor 
has  immediately  provided 
Service  Team  with  a level  of 
technical  credibility  across  a 
wide  range  of  products, 
supported  by  a high  level  of 
expertise  and  by  Thomainfor's 
support  organisation,  which  is 
able  to  offer  pan-European 
service.  The  advantage  to 
Thomainfor  of  the  U.K. 
arrangement  is  that  the  joint 
venture  capitalises  on  the  critical 
mass  and  nationwide  coverage 
of  Norsk's  existing  service 
organisation  to  achieve  a 
significantly  larger  share  of  the 
U.K.  service  market  than  it  was 
able  to  achieve  as  an 
independent  entity. 

Another  significant  factor  in 
favour  of  the  venture  is  that 
Thomainfor  has  no  plans  to 
enter  the  Scandinavian  market, 
thereby  avoiding  a potential 
conflict  of  interest  in  an  area  in 
which  Norsk  has  particular 
interest.  Norsk  will  take 
advantage  of  Thomainfor's 
support  capability  to  provide 
the  technical  expertise  necessary 
to  move  into  the  Scandinavian 
independent  maintenance 
market. 

Competitive  Threats 

A key  component  of  the 
strategic  thinking  behind  the 
move  into  multivendor 
maintenance  was  the 
competitive  threat  posed  by  the 
existing  independent 
maintenance  companies  and  by 
the  equipment  vendors  offering 
multivendor  maintenance 
services. 


Norsk's  view  is  that  the  major 
independent  companies  will  not 
experience  substantial  growth 
over  the  short  term  for  two 
reasons: 

• The  rapid  rate  of  expansion 
through  acquisition  exhibited 
by  the  independence 
maintenance  sector  over  the 
recent  past  is  likely  to  give 
way  to  a period  of 
consolidation,  as  attempts  are 
made  to  integrate  the 
disparate  parts  into  a 
cohesive  whole. 

• The  company  considers  that 
the  competitive  threat  posed 
by  third-party  maintenance 
companies  has  been  reduced 
by  the  excessive  reliance  on 
the  use  of  price  as  a 
competitive  weapon  that  has, 
in  Norsk's  opinion,  led  to  an 
unsustainable  level  of 
profitability  for  many 
companies  in  the  market. 

Norsk  considers  that  the 
potential  threat  posed  by 
equipment  vendors  has 
decreased  because  of  the 
tendency  to  see  multivendor 
maintenance  as  a defensive 
tactic  to  protect  traditional 
sources  of  revenue.  On  the 
other  hand,  Norsk  regards  the 
service  as  a significant  business 
opportunity  and  one  that  will 
assist  significantly  in  the 
development  of  the  core  service 
business.  This  important 
variation  in  emphasis  will  be 
used  by  the  company  to 
establish  a competitive  edge 
over  alternative  multivendor 
service  offerings. 


INPUT  Comments 

There  is  little  doubt  that  the 
strategic  direction  adopted  by 
Norsk  is  both  radical  and  bold. 

It  is  the  first  instance  in  which  a 
major  partnership  has  been 
forged  between  an  equipment 
manufacturer  and  a leading 
independent  maintenance 
company. 

The  success  of  the  company's 
entry  into  the  multivendor 
maintenance  market  will  be 
largely  dependent  upon  two 
questions: 

• How  valid  are  the 
assumptions  made 
concerning  the  comparatively 
weak  competitive  threat 
posed  by  the  independent 
sector  and  equipment 
vendors? 

• Are  the  assumptions 
concerning  the  high  level  of 
demand  correct? 

INPUT'S  research  indicates  that, 
in  Western  Europe  as  a whole, 
up  to  70%  of  users  prefer  single- 
source maintenance  as  a service 
option.  In  the  U.K.,  the  figure  is 
60%.  The  indications  are, 
therefore,  that  a very  significant 
level  of  demand  exists  for  the 
type  of  service  offered  by  Norsk. 

However,  it  is  worth  noting  that 
the  figures  for  1990  quoted 
above  show  a very  marked 
decline  over  the  data  for  1989, 
which,  in  the  case  of  Western 
Europe,  was  75%,  and  for  the 
U.K.,  84%.  One  possible 
explanation  for  this  evidence  is 
that  users  are  expecting  an 
increasingly  specialised  service 
from  their  maintenance 
suppliers,  which  implies  a 


INPUT 


e 1991  by  INPUT.  Reprodudlon  pfohlbHod. 


Service  Update 


preference  for  a number  of 
specialist  vendors.  However, 
such  an  explanation  fails  to 
take  into  account  the  extensive 
use  of  subcontracting  by 
multivendor  suppliers. 

A second,  more  feasible 
explanation  is  that  the  latent 


demand  is  still  very  strong,  but 
users'  expectations  in  terms  of 
the  quality  of  true  multivendor 
maintenance  have  not  been  met. 
The  continuing  strong 
performance  of  the  leading  true 
multivendor  suppliers,  such  as 
Olivetti,  lends  support  to  this 
explanation.  If  this  view  is 


5 

accepted,  the  optimism 
demonstrated  by  Norsk  may 
prove  to  be  well  founded. 

The  future  development  of 
Norsk's  service  business  will 
be  watched  with  interest.  ■ 


Bell  Atlantic  Takes  Last 
Step  in  Consolidating 
Business  Systems 
Services  and  CDC 

Bell  Atlantic  Business  Systems 
Services  has  completed  the  last 
step  in  the  integration  of  Control 
Data's  third-party  maintenance 
group  into  the  former  Sorbus 
third-party  maintenance 
business.  The  company 
eliminated  240  redundant  dual 
management  and  support 
positions  that  have  existed  since 
the  CDC  acquisition.  The 
eliminated  positions  affect  field 
sales  and  operations,  field  and 
headquarters  administration 
staff,  and  management. 

Other  reorganization  efforts  at 
Bell  Atlantic  include  the 
reporting  of  the  Bell  Atlantic 
Business  Computer  Technology 
Services  companies  within  the 
Bell  Atlantic  Business  Systems 
Services  organization. 


April  1991 


Hewlett-Packard 
Launches  Diamond 
Edge  Support  Program 

On  April  1,  Hewlett-Packard 
announced  a support  program 
designed  to  help  its  workstation 
value-added  businesses  (VABs) 
move  their  products  to  market 
more  quickly  and  support  their 
customers  more  effectively. 

The  new  program,  called  the  HP 
Diamond  Edge  support 
program,  helps  workstation 
VABs  improve  their  time  to 
market  in  three  key  ways: 

1.  Enhanced  software  support 
services  to  provide  faster 
problem  resolution  at  an  HP 
response  center. 

2.  HP  consultants  to  work  with 
VABs,  reducing  the  time  it 
takes  to  port  or  migrate  their 
applications  to  new  HP 
platfonns  or  software. 
Workstation  VABs  can  now 

O 1991  by  INPUT.  Reproduction  prohibited. 


move  onto  new  platforms 
and  get  applications  to 
market  more  quickly. 

3.  Selected  training  courses 
previously  restricted  to  HP 
application  engineers  are 
now  available  to  VABs' 
developers  and  support 
engineers.  These  courses 
enable  VABs  to  develop 
applications  more  quickly 
and  to  provide  better  support 
to  their  customers. 

VARs  and  OEMs  can  sell  a 
complete  maintenance  solution 
by  bundling  the  HP  Apollo 
Comprehensive  Maintenance 
service  with  their  own 
application  support.  The  VARs 
and  OEMs  in  return  receive 
discounts  and  credits  enabling 
them  to  increase  their  profit 
margins. 

All  VABs  can  resell  HFs 
scheduled  training  courses  and 
register  their  customers  directly. 
VABs  receive  a 10%  discount  on 
the  price  of  the  course  when 
reselling,  and  those  who 
participate  are  then  eligible  for 
the  same  discount  when  sending 
their  employees  to  HP  training. 

Pricing  is  based  on  the  unique 
requirements  of  the  individual 
VAB.  ■ 


INPUT 


6 


Questions 
from  the  USA 


Question: 


What  are  GE  Computer  Services 
service  offerings  for  PCs  and 
LANs? 

Answer: 

LAN  services  include  remote 
technical  support,  hardware 
repair,  hardware  installation, 
software  installation,  site 
planning,  cabling,  and  hardware 
staging.  GE  services  a wide 
variety  of  LAN  hardware 
components  and  network  types. 

Personal  computer  maintenance 
is  available  for  the  PC  itself  as 
well  as  associated  peripherals, 
including  LANs.  Hardware 
maintenance  includes: 


year  contracts,  remote  site 
coverage,  flexible  pricing 
options,  expanded  hours 
coverage,  premium  response 
time,  and  telephone 
assistance. 

Question: 

How  many  service  employees 
does  HDS  employ? 

Answer: 

There  are  approximately  475 
total  service  employees  in  the 
U.S.,  of  which  400  are  actually  in 
the  field  providing  on-site 
service. 


Question: 


• On-site  remedial 
maintenance,  on-site 
installation  service,  network 
maintenance,  carry-in  depot 
maintenance,  and  other 
custom  services.  Standard 
features  of  on-site  remedial 
maintenance  contracts 
include  repairs  due  to 
hardware  failure;  parts,  labor, 
and  travel;  toll-free,  24-hour, 
7-day/ week  response  center. 
Optional  contract  features 
are  after-hours  service,  multi- 


How many  U.S.  service 
locations  does  HDS  have? 

Answer: 

HDS  states  that  there  are  85 
service  locations  nationwide. 

Question: 

What  dealer  programs  do  Apple 
and  Compaq  have  for  warranty 
repair  and  warranty 
reimbursement? 


2-i.nswer: 

According  to  ComputerLand, 
there  is  no  on-site  program  for 
either  Apple  or  Compaq. 

Apple  depot  has  a sliding  scale 
for  reimbursement  depending 
on  the  complexity  of  the  repair. 
It  costs  the  least  for  minor 
repair,  and  up  to  50%  more  for 
the  most  complex  problem. 

Compaq  depot  is  straight-line 
reimbursement,  regardless  of 
the  problem.  The  dealer  does 
the  repair,  and  replaces  the  parts 
in  the  problem  machine.  The 
dealer  fills  out  and  sends  back  to 
the  manufacturer  a warranty 
claim  form,  accepted  by  most 
manufacturers  (both  Apple  and 
Compaq  accept  it),  and  the 
defective  part.  The 
manufacturer  sends  back  a 
replacement  part.  The 
manufacturer,  at  the  dealer's 
request,  may  also  give  credit 
against  future  purchases.  This 
credit  may  also  build  up,  and 
when  it  reaches  a certain  point, 
the  dealer  can  receive  cash 
instead  of  the  credit. 

Both  Apple  and  Compaq  can 
also  cross-ship  (the 
manufacturers  have  different 
names  for  it);  the  dealer  calls  the 
manufacturer  (when  the  part  is 
under  warranty),  tells  the 
manufacturer  the  part  number, 
and  within  15  to  30  days,  the 
dealer  receives  the  replacement 
part  at  no  charge  (as  long  as  the 
manufacturer  receives  the 
defective  part). 


INPUT 


O 1991  by  INPUT.  Reprodudlon  prohibited. 


Service  Update 


7 


❖ The  research  arm  of  Glaxo, 
the  U.K.  pharmaceutical 
company,  is  looking  into  a 
number  of  companies  to 
find  a long-term  supplier 
for  its  PC  maintenance 
requirements.  The  contract 
was  held  by  Ferrari 
Technical  Services,  but 
became  null  and  void  when 
the  company  went  into 
administrative  receivership. 
Although  Glaxo  has  taken 
out  an  interim  contract  with 
Videcom,  the  purchaser  of 
Ferrari  Technical  Services,  it 
is  clear  that  the  contract  is 
"up  for  grabs." 


Snippets 

❖ Sun  Microsystems  has 
reported  that  it  is  creating 
new  subsidiaries  in  Finland, 
Belgium  and  Brazil  to 
provide  direct  sales  and 
support  capability.  This 
announcement  brings  the 
number  of  European 
subsidiaries  to  ten. 

❖ It  is  reported  that  several 
facilities  management 
companies  in  the  U.S.  are 
considering  taking  legal 
action  in  an  attempt  to 
prevent  IBM  from  entering 
the  facilities  management 
market. 


❖ Servicetec,  the  U.K. 
independent  maintenance 
company,  has  announced 
that  it  has  acquired  the 
Dutch  maintenance 
business  of  Econocom. 
Servicetec  plans  to  manage 
the  acquisition  at  arm's 
length  and  no  staff  changes 
are  envisaged. 

❖ IBM  U.K.  has  taken  equity 
stakes  estimated  at  10%  in 
nine  of  its  agents,  including 
Bluebird  Software  Pic, 
Cyberaid  Ltd.  and  JBA 
International  Pic. 


U.S.  Snippets 


❖ Granada  Computer  Services 
North  America  has 
announced  that  it  has  no 
plans  to  put  the  U.S. 
division  up  for  sale.  The 
company  reports  sales  of 
$30  million  in  North 
America  and  is  negotiating 
another  acquisition  that  will 
bring  it  another  $10  million 
in  revenues. 

❖ Hewlett-Packard 
announced  the  inclusion  of 
a maintenance  program  for 
workstation  hardware, 
software,  and  the 
networking  aspects  of 
service  in  its  suite  of 
support  services.  The  new 
program  provides  single- 
source support  for 
customers  using 
workstations  in  complex 
networks. 


❖ Intelogic  Trace  recently 
introduced  telephone  support 
for  NetWare.  The  "995 
Program"  provides  25  phone 
support  call  incidents  for 
$995  per  site  with  the 
guarantee  of  a one-hour 
response  time  by  a CNE. 

❖ Grumman  Systems  Support 
(GSS)  has  expanded  its 
operations  in  Rorida  with  the 
addition  of  sales  and  service 
representatives  in  Miami  and 
Tampa/St.  Petersburg.  GSS 
already  had  offices  in 
Melbourne  and  Stuart,  FL,  as 
well  as  the  Kennedy  Space 
Center. 

❖ On  March  18, 1991,  Bell 
Atlantic  Business  Systems 
Services  was  the  recipient  of 
the  1991  Digital  Review 


Target  Award  for  "Best 
Third-Party  Maintenance." 
This  is  the  third  consecutive 
year  that  Bell  Atlantic  BSS 
has  received  the  award  for 
providing  DEC  customers 
with  services. 

❖ As  an  expansion  of  its 
DEXtra  Support  program. 
Bell  Atlantic  BSS,  in 
cooperation  with  The 
PARSEC  Group,  now  offers 
layered  product  support  for 
the  20  most  popular 
applications,  languages, 
and  utilities  running  on 
DEC  VAX /VMS  systems. 


April  1991 


© 1991  by  INPUT.  Reproduction  prohibKed. 


INPUT 


About  INPUT 


INPUT  provides  planning  infonnation,  analysis,  and  recommendations  for  the 
infonnation  technology  industries.  Through  market  research,  technology 
forecasting,  and  competitive  analysis,  INPUT  supports  client  management  in 
making  informed  decisions. 

Subscription  services,  proprietary  research/consulting,  merger/acqiiisition 
assistance,  and  multiclient  studies  are  provided  to  users  and  vendors  of  information 
systems  and  services.  INPUT  specialises  in  the  software  and  services  industry 
which  includes  software  products,  systems  operations,  processing  services,  network 
services,  systems  integration,  professional  services,  tumkey  systems,  and  customer 
services.  Particular  areas  of  expertise  include  CASE  analysis,  information  systems 
planning,  and  outsourcing. 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior  management 
positions  in  operations,  marketing,  or  planning.  This  expertise  enables  INPUT  to 
supply  practical  solutions  to  complex  business  problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a leading 
international  research  and  consulting  firm.  Clients  include  more  than  100  of  the 
world's  largest  and  most  technically  advanced  companies. 


INPUT  OFFICES 


North  America 

San  Francisco 

1280  Villa  Street 

Mountain  View,  CA  94041-1194 

Tel.  (415)  961-3300  Fax  (415)  961-3966 

New  York 

Atrium  at  Glenpointe 
400  Frank  W.  Burr  Blvd. 

Teaneck,  NJ  07666 

Tel.  (201)  801-0050  Fax  (201)  801-0441 

Washington,  D.C. 

INPUT,  INC. 

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Vienna,  VA  22182 

Tel.  (703)  847-6870  Fax  (703)  847-6872 


International 

London 
INPUT  LTD. 

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75003  Paris,  France 

Tel.  (33-1)  42  77  42  77  Fax  (33-1)  42  77  85  82 

Frankfurt 
INPUT  LTD. 

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Tel.  (0)  6447-7229  Fax  (0)  6447-7327 

Tokyo 

INPUT  KK 

Saida  Building,  4-6 

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Tokyo  101,  Japan 

Tel.  (03)  3864-0531  Fax  (03)  3864-4114 


Route: 


INPUT 


Service 
U pdate 


©INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — International 

May  1991 


IN 

THIS 

ISSUE: 


1 Digital — A Focus  on  Service 

9  Snippets 

10  ....News  from  the  U.S. 

1 1 ....Questions  from  the  U.S.  Hotline 


Digital — A Focus  on  Service 


An  increasing  emphasis  on 
the  need  to  match  IT 
investment  with  the  strategic 
goals  of  the  business  it  supports, 
combined  with  a perception  that 
IT  spending  has  not  been  subject 
to  adequate  management 
controls,  are  two  key  factors 
currently  affecting  the  computer 
systems  marketplace.  A further 
issue  that  specifically  affects  the 
professional  and  customer 
services  markets  is  that  the 
development  of  services  such  as 
disaster  recovery  and  systems 
operations  (facilities 
management)  blur  the 
boundaries  between  the 
traditionally  separate  wings  of 
the  equipment  vendor's  service 
organisation. 

In  response  to  these  factors,  a 
trend  is  emerging  within  the 
industry.  This  trend  can  be 


described  as  the  merging  of  the 
professional  services  and  the 
customer  services  operations 
into  one  functional  entity. 
Digital  and  Wang  are  two  of  the 
companies  that  have  adopted 
this  policy  and  this  month 
Service  Update  is  profiling  the 
Digital  Services  operation  as  the 
leading  example  of  this  trend. 

Exhibit  A illustrates  the  degree 
to  which  Digital  has  succe^ed 
in  developing  nonmaintenance 
customer  services  revenues  that 
are  significantly  greater  than 
those  of  its  rivals.  The  company 
must  be  considered  the  most 
successful  pioneer  in  the 
development  of 
nonmaintenance  services,  and 
the  introduction  of  the 
programme  demonstrates 
clearly  the  extent  to  which  the 


company  is  pursuing  its 
adopted  service  strategy. 

The  Service  Concept 

The  central  element  of  the 
service  concept  is  that  the 
Services  product  is  targetted  at 
servicing  the  needs  of  the 
customer's  total  business,  not 
merely  the  equipment.  Geoff 
Shingles,  Managing  Director  of 
Digital  Equipment  Co.  Ltd,  has 
stated  that: 

"Good  planning,  the  design 
of  the  most  appropriate  policies, 
procedures  and  infrastmcture 
and  the  successful 
implementation  and 
management  of  the  resultant  IT 
strategy  all  play  an  important 
role  in  supporting  (the 
customer's)  business." 

Continued  on  next  page 


2 


Digital  . . from  jmge  1 


Exhibit  A 

Nonmaintenance  Customer  Service  Revenues 
Western  Europe,  1990 


Revenue  ($  Millions) 

Source:  INPUT 


It  is  apparent,  therefore,  that  the 
company  is  placing  equal 
importance  on  the  entire  service 
cycle — from  strategic  planning 
to  ongoing  maintenance  and 
support.  To  reflect  this 
approach,  the  company  has 
adopted  a four-level 
methodology  that  provides  the 
overall  structure  into  which  the 
specific  service  offerings  fit.  The 
methodology,  known  as  PDIM, 
covers  planning,  design, 
implementation  and 
management  and  is  illustrated 
in  Exhibit  B. 

All  services  included  in  the 
programme  are  related  to  the 
level  of  the  methodology  to 
which  they  apply.  For  example, 
management  consultancy 
contributes  to  planning,  design 
and  implementation — whereas 
hardware  product  services  are 
exclusively  involved  at  the 
management  level.  Each 
individual  service  product 
within  the  programme  can  be 
seen  as  contributing  to  a service 
cycle  that  is  closely  allied  to  the 
client's  business  development 
needs. 

The  Services 

Exhibit  C lists  the  major 
categories  of  service  and  the 
particular  service  products 
included  in  the  programme. 

Consultancy  Services  provide  a 
range  of  modules  covering 
assistance  with  the  development 
of  a business  strategy  that  is 
aimed  particularly  at  the 
business  unit  or  divisional  level 
of  an  organisation.  At  this  level. 


INPUT 


© 1991  by  INPUT.  Reproduction  prohibited. 


May  1991 


Service  Update 


consultancy  is  provided  at  the 
business  level — only 
comparatively  minor  attention  is 
paid  to  specific  issues  related  to 
information  technology  or 
infomiation  systems. 

This  high-level  consultancy 
service  is  supported  by  a range 
of  modules  that  focus  on  the 
design  element  of  the  service 
methodology  as  well  as  the 
planning  phase.  Examples 
include  IT  strategy  planning, 
which  aims  to  identify  how  IT 
can  support  the  overall  strategic 
direction  of  the  business. 
However,  in  addition  to  a focus 
on  IT  issues,  other  key  elements 
required  to  support  the  business 
strategy  are  included.  The  key 
element  is  assistance  with 
organisational  development  and 
change.  The  key  point  in 
relation  to  the  management 
consultancy  element  of  the 
programme  is  that  issues 
relating  to  IS  and  IT  strategies 
are  placed  firmly  in  the  context 
of  the  overall  needs  of  the 
business. 

The  applications  consultancy 
module  is  targetted  at  the 
planning  and  design  of  IT 
solutions  to  meet  the  overall 
requirements  of  the  client's 
business.  The  application  of 
specific  technologies  such  as  EDI 
or  products  such  as  All-In-1 
provide  examples  of  the  services 
covered  by  the  module.  The 
focus  generally  is  applied  to  the 
design  and  implementation  level 
of  the  methodology  and, 
therefore,  supports  the  planning 
phase  providt^  by  the 
management  consultancy  level. 


3 


The  IT  and  IS  consultancy 
services  are  intended  to  provide 
assistance  in  gaining  maximum 
perfomiance  from  systems 
solutions  at  the  applications, 
systems  software  and 
equipment  platform  levels. 
Exhibit  D provides  a summary 
of  the  major  elements  provide 
at  this  level  of  the  service. 


Exhibit  B 

Plan,  Design,  Implement,  and  Manage 
The  Methodology 


Business  strategies  n a • ♦ ^ u it 

Planning  r~  Assisted  by  IT 

■ Corporate  goals  -* 


Design 


Policies 
Procedures 
Infrastructure 
Applications 
Training  requirements 


Implementation 


Provision  of 


^Manpower 
'^Management  skills 


Management 


People 


Resources 


To  meet  the 
needs  imposed  by 
changing  demands 

Source;  INPUT 


In  essence,  consultancy  services 
are  aimed  at  providing  services 
that  satisfy  the  technical 
requirements  of  the  customer 
but,  more  importantly,  are 
designed  to  ensure  that  the  IS 
and  IT  strategies  adopted 
complement  the  overall  business 
strategy  agreed  upon  with  the 
client. 


CofUinued  on  next  page 


May  1991 


e 1991  by  INPUT.  Reproduction  prohibAed. 


INPUT 


Service  Update 


4 


Digital. 


. from  page  3 


Exhibit  C 


Digital  Services 


• Consultancy  Services 

- Management  consultancy 
-Applications  consultancy 

- IT  consultancy 

- IS  consultancy 

• Education 

- Education  and  training  services 

• Support  and  Maintenance  Services 

- Digital-assisted  services  - for  companies  wishing  to 
develop  self  maintenance  capability 

-Environmental  services 

- Business  protection  services  - Disaster  recovery 

- Business  support  services  - assumption  of 
responsibility  for  managing  delivery  of  Digital  and 
multivendor  hardware  and  software  products 

- Network  services 

- Hardware  product  services  (desktop)  - Digital  and 
multivendor 

- Software  product  services 

- Hardware  product  services 

-Vendor  equipment  services  - multivendor 

• Project  Services 

- Project  services 
-Business  support  services 


Source:  INPUT 


Education  and  Training  Services 
are  aimed  at  all  four  layers  of 
Digital's  service  model.  In 
addition  to  the  delivery  of 
training  through  the  DECtrain 
courses  and  delivery  modules, 
the  company  offers  consultancy 
to  assist  in  the  identification  of 
training  requirements  and  the 
development  of  suitable 
curricula.  The  service  is  aimed 
at  maximising  the  benefit  that 
the  client  will  gain  from  an 
investment  in  IT. 

Support  and  Maintenance  Services 
include  the  majority  of  services 
traditionally  associated  with  the 
customer  service  organisation. 
The  categories  of  service 
provided  are  listed  in  Exhibit  C. 
However,  to  illustrate  the  extent 
of  the  range  of  services  covered. 
Exhibits  E and  F detail  the 
service  products  contained 
within  the  hardware  products 
and  software  products  services, 
respectively.  It  should  be  noted 
that  multivendor  maintenance  is 
included  as  a specific  service,  as 
is  assistance  to  users  who  wish 
to  develop  their  own  servicing 
capability.  The  inclusion  of  a 
range  of  services  covering 
multivendor  maintenance 
indicates  the  extent  to  which 
Digital  is  prepared  to  enter  co- 
operative agreements  with 
third-party  service  providers  to 
offer  single-source  maintenance. 

Project  Services  cover  a wide 
range  of  service  products 
encompassing  the  management 
of  wide-area  networks,  the 
provision  of  packaged  solutions 
in  response  to  defined  business 
problems,  and  bespoke  software 
development.  The  range  of 
services  covered  is  illustrated  in 


INPUT 


© 1991  by  INPUT.  Heprodudlon  prohibited. 


May  1991 


Service  Update 


5 


Exhibit  G.  This  sector  of  the 
total  Enterprise  Services  product 
covers  the  range  of  infonnation 
services  provided  by  Digital.  A 
comparison  of  the  Coiisulting, 
Support  and  Maintenance,  and 
Project  services  provides  a view 
of  the  comprehensive  nature  of 
the  total  service  offering. 


company  is  the  market  leader 
in  the  development  of 
nonmaintenance  customer 
services  revenues  and,  as 
such,  the  Services  programme 
is  likely  to  have  a significant 
influence  on  the  thinking  of 
the  company's  major 
competitors. 


INPUT  Comments 

The  fact  that  Digital  is  already 
Western  Europe's  biggest 
supplier  of  nonmaintenance 
customer  services  revenues 
provides  a clear  indication  of  the 
importance  that  the  company 


• INPUT  anticipates  that  the 
management  experience 
gained  in  running  a $700 
million  customer  services 
operation  as  a profit  centre 
will  beneficially  influence  the 
management  of  the 
integrated  business.  The  non- 


Exhibit D 

IT  and  IS  Consultancy  Services 
(Principal  Elements) 

Information  Technology 

Information  Systems 

Rdb  design  and  implementation 
Database  systems  performance 
Network  planning  and  design 
Message  handling  systems 

Planning  and  design 

Mailbus  node  implementation 

CASE  design  and  implementation 
General  technology  consulting 

Capacity  planning 

Network  management 
Performance  consulting 

Environmental  services 

Business  protection 
services 

Source:  INPUT 

places  on  service.  However,  the 
Services  programme  should  be 
regarded  as  highly  significant  in 
its  own  right  for  four  principal 
reasons: 

• The  programme  illustrates  a 
trend  that,  potentially,  will 
influence  the  general 
provision  of  service  within 
the  industry  as  a whole.  As 
has  already  been  stated,  the 


customer-services  element  of 
the  combined  business  has 
traditionally  been  managed  at 
a smaller,  more  fragmented 
level  than  the  customer 
services  operation. 


Continued  on  next  page 


One  of  the  key  elements  of 
the  total  services  package  is 
the  importance  attached  to 
service  partnerships.  The 
multivendor  maintenance 


May  1991 


O t99t  by  INPUT.  Reprodualon  prohibited. 


INPUT 


Service  Update 


6 


Exhibit  E 


The  Support  and  Maintenance  Service 
Hardware  Product  Services 

• DEC  System  Support  Service  (DSS)  - Hardware  and 
software  service  contract 

- 1 2-hour  cover  - 4-hour  response  (hardware  faults) 

- Remote  diagnostics  - access  to  problem  database 

- Systems  software  licence  for  new  versions 

-Telephone  support  and  on-site  critical  software 
support 

• BASICsystem  Support  Service  (BSS)  - for  non-critical 
applications 

-8-hour  cover  - next-day  response  (hardware  facilities) 

- All  other  services  as  per  DSS 

• Extended  Cover 

- Service  coverage  up  to  24  hours,  365  days  per  year 
(all  other  services  as  per  DSS) 

• City  Service 

- Reduces  response  from  4 to  2 hours  for  all  hardware 
faults 

-Available  for  major  urban  areas  only 

• DECresident 

-Provision  of  resident  engineer 

- Includes  comprehensive  site  management  and 
communications 

• Hardware  per  call 

- Hardware  support  charged  on  time  and  materials 
basis 

Source;  INPUT 


INPUT 


© 1991  by  INPUT.  Heprodudlon  piohibBed. 


May  1991 


Service  Update 


7 

Exhibit  F 

The  Support  and  Maintenance  Service 

Software  Products  Services 

— 

• Software  Support  Service  (SSS) 

- Single  processor  or  clusterwide 

- Provision  of  licence  to  use  new  versions 

• Media  and  Documentation  Distribution  Service  (MDDS) 

- Media  update  supplied  on 

• Tape 

• Disk 

• Compact  disk 

- Provision  of  documentation  update,  including  technical  news 
bulletins 

• Documentation  Service  (DS) 

- Provision  of  new  version  of  documentation  on  request 

• Compact  Disk  Distribution  Service 

- Delivery  of  a combination  of  the  following  every  2 months 

• VAXA/MS  software 

• On-line  documentation 

• Product  installation  guides 

• Product  release  notes 

• Updated  contents  list 

• Software  Update  Installation  Service  (SUIS) 

-An  assigned  software  specialist 

- Update  impact  assessment  and  advice 

- Update  planning 

- Installation  of  new  and  updated  software 

Source;  INPUT 

Continued  on  next  page 


May  1991 


© 1991  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 


8 


Digital.  . from  page 


Exhibit  F (cont.) 

The  Support  and  Maintenance  Service 
Software  Products  Services 

— 

• Software  per  call 

- Software  support  provided  on  time  and 
materials  basis 

• Stand-Alone  Telephone  Support  Service 
(SATS) 

- For  companies  with  reduced  requirement 
for  support 

-Telephone  support 

- Remote  diagnostics  - access  to  problem 
database 

-On-site  support  for  critical  problems 

• System  Manager  Support  Service  (SMSS) 

-Systems  performance  management 
services  covering  the  following: 

• Storage 

• Configuration 

• Performance 

• User  accounts 

• Security 

• Systems  operations 

Source;  INPUT 


programme  provides  the 
principal  example  of  this 
factor  in  that  it  explicitly 
includes  the  concept  of 
approved  contractors  in  the 
provision  of  multivendor 
support.  It  is  anticipated  that 
the  demand  for  a single 
source  of  support  will 
significantly  increase  the  rate 
at  which  such  relationships 
are  developed. 

• Perhaps  the  most  important 
conclusion  to  be  drawn  from 
the  service  is  the  considerable 
stress  placed  on  the  degree  to 
which  information  systems 
must  support  the  client's 
business  as  a whole.  The 
service  is  explicitly  targetted 
to  provide  business  solutions 
rather  than  to  serve  the 
technology.  The  need  for  this 
business  emphasis  has  been 
explicitly  expressed  by 
computer  users  during  the 
course  of  INPUT  user 
research.  Although  the  need 
to  provide  such  a business 
focus  is  frequently  voiced 
within  the  industry.  Digital  is 
one  of  the  few  companies  to 
provide  a comprehensive 
range  of  service  products  in 
response  to  this  stated  need. 

The  strategy  behind  the  Services 
package  is  a response  to  many 
of  the  factors  driving  the 
development  of  the  IT  services 
business.  The  importance  of  the 
package  is  further  enhanced  by 
the  fact  that  the  product  is  from 
a leading  service  supplier. 
INPUT  predicts  that  this  service 
initiative  will  prove  to  be  a 
significant  influence  on  the 
thinking  of  many  of  Digital's 
competitors.  ■ 


INPUT 


d 99 1 by  INPUT.  Reproduction  prohibited. 


May  1991 


9 


Exhibit  G 


The  Support  and  Maintenance  Service 
Project  Services 


Corporate  and  Industry 
Network  Systems  and 
Services  (CINSS) 


Professional  services 
(Analysis,  specification, 
design) 

Systems  integration 
Network  support 
Financial  support  services 
Legal  support  services 


Prime  contractor 

Management  of  design 

Integration  and 
management  of  WANs 


Project  Integration 
Services 


Provision  of  a solution  to  a 
defined  business  problem 


Combination  of  Digital  and/or 
third-party  products  and  services 


Systems  Development ^Bespoke  and  customized 

Engineering  Services  business  solutions 

Project  Review  ► Resolution  and  recommendation 

for  IT  project  problems 


Source:  INPUT 


Snippets 


*t*  As  an  expansion  of  the  environmental  service 
offered  by  Digital,  the  company  has 
announced  the  formation  of  an  Intelligent 
Building  Services  ciivision  within  the  service 
group.  The  services  provided  include  all 
aspects  of  managing  the  construction  of  a 
building — including  site  selection,  design, 
project  management,  installation  of  the 
technology  infrastructure  and  handover  to  the 
customer. 

*1*  It  is  reported  that  Granada  Business  Services 
suffered  a loss  of  approximately  £700,000  for 
the  six  months  to  April.  The  company  has  also 


indicated  that  the  Computer  Services  operation 
will  remain  part  of  the  group. 

*1*  Norsk  Data  Ltd  has  acquired  Norman 
Magnetics  Ltd,  a disk  drive  repair  business 
based  in  Farnborough,  U.K. 

❖ INPUT  anticipates  that  Siemens-Nixdorf 
Informationssysteme  will  take  a 20%  stake  in 
the  troubled  French  microcomputer 
manufacturer  SMT-Goupil.  Although  no 
confirmation  has  been  provided,  Siemens- 
Nixdorf  has  stated  that  technical  and  industrial 
agreements  are  being  discussed. 


May  1991 


© 1991  by  INPUT.  Rt>pfoducllon  prohibited. 


INPUT 


Service  Update 


10 

Snippets  (cont.) 


*t*  Dell,  the  PC  manufacturer,  has  announced 
plans  for  an  aggressive  expansion  into  Europe. 
Subsidiaries  have  been  opened  in  Benelux  and 
Finland;  a Spanish  office  is  planned  for  the 
summer.  Expansion  into  Norway,  Denmark 
and  Switzerland  will  follow  in  the  medium 
term,  and  the  company's  manufacturing  plant 
in  Limerick  has  recently  begun  production. 
The  company  returned  revenues  of  $546 
million  in  1990;  revenues  are  forecast  to 
increase  to  $750  million  in  1991. 


❖ CAP  Gemini  Sogeti  has  used  its  70%  stake  in 
Hoskyns  to  launch  a new  French  facilities 
management  company,  CAP  Sesa  Hoskyns. 
The  company  is  a joint  venture  between 
Hoskyns  and  CAP  Sesa  in  which  Hoskyns  has 
overall  control.  The  company  has  stated  that 
the  French  market  is  the  first  priority  but  has 
indicated  an  intent  to  develop  a facilities 
management  operation  in  all  countries  where 
CCS  has  a significant  presence. 


News  from 
the  USA 


/ 1 

1 1 -zzzztz. 

msm  n M » maam  i 

mmmmk 

sanfax  100 


On  May  16, 1991,  Digital 
Equipment  Corporation 
announced  Help  Desk  Service,  a 
modular  set  of  capabilities  that 
will  be  customized  to  each 
customer's  needs.  The  three 
primary  service  modules  are 
Evaluation  and  Design, 
Implementation  and  Operation, 
and  Problem  Resolution 
Coordination  and  Management 
Reporting.  The  Help  Desk 
Service  is  capable  of  handling 
multivendor  environments. 

Kaiser  Permanente's  Ohio 
region  has  selected  Bell  Atlantic 
Business  Systems  Services  as 


one  of  seven  "preferred 
(information  systems)  vendors." 
Bell  Atlantic  Business  Systems 
Services  now  receives  95%  of  the 
region's  computer  service 
business. 

Bell  Atlantic  Business  Systems 
Services  announced  the  signing 
of  strategic  service  alliances  with 
Amdahl  and  NCR.  Under  the 
agreement  with  Amdahl,  Bell 
Atlantic  will  provide  support  of 
non- Amdahl  equipment  at 
existing  Amdahl  customers' 
sites.  Amdahl  believes  the 
agreement  symbolizes  a 
commitment  to  top-quality 


service  for  its  customers' 
multivendor  environments. 

The  service  alliance  with  NCR 
offers  NCR's  customers  support 
for  IBM  and  DEC  computer 
systems  from  Bell  Atlantic 
through  a single  point  of 
contract.  The  agreement 
enhances  NCR's  ability  to 
provide  multivendor  service  for 
its  customers,  with  the  actual 
provider  of  service  transparent 
to  the  NCR  customer.  Similarly, 
Bell  Atlantic  will  subcontract 
NCR  to  provide  maintenance 
services  on  products  not 
serviced  by  Bell  Atlantic. 

It  is  not  known  at  this  time  the 
effect  that  the  recent  acquisition 
of  NCR  by  AT&T  will  have  on 
service  alliances. 

Novadyne  Computer  Systems 
has  announced  a joint  service 
agreement  with  Secure  Systems 
Group,  Inc.,  a supplier  and 
maintainer  of  TEMPEST  and 
ruggedized  computer  products. 
The  agreement  provides  single- 
source hardware  and  network 
service  to  customers  requiring 


INPUT 


© 1991  by  INPUT.  Repfodudion  prohibited. 


May  1991 


Service  Update 


both  TEMPEST  and  non- 
TEMPEST  system  maititennnee. 
The  companies  will  jointly 
market  their  services  to  current 
and  potential  customers. 

BULL  EIN  has  announced  that  it 
has  agreed  to  purchase  the 
assets  of  PTXI. 

Xerox  Corp.  is  leaving  the  third- 
party  maintenance  business, 
citing  increasing  competitive 
cost  pressures  as  the  reason. 
Current  contracts  will  be 
honored,  but  no  new 
agreements  will  be  signed. 

ARDIS  has  signed  a $15  million 
agreement  with  NCR  to  provide 
access  to  its  nationwide  radio 
data  infonuation  service. 


ARDIS  will  notify  NCR's  5,000 
customer  service  field  engineers 
of  dispatch  information  and 
significant  details  on  their  on- 
site calls  via  the  network.  NCR 
is  spending  an  additional  $15 
million  to  purchase  Motorola 
KDT  840  hand-held  terminals 
for  its  field  engineers  to  receive 
the  information. 

Sears  Business  Centers  has 
formed  a new  division.  Sears 
Hardware  Services  Group.  This 
new  group  will  provide 
computer  hardware  support  and 
professional  services  to  Fortune 
500  clients;  current  clients 
include  Dean  Witter,  Allstate, 
and  Exxon. 


Questions 
from  the  U 
Hotline 


Q:  Who  are  the  authorized 
third-party  maintainers  for 
Codex  and  Burr-Brown 
modems? 

A:  According  to  Codex,  there 
are  no  companies 
authorized  to  make  repairs 
on  its  units.  Even  large 
service  providers  will 
subcontract  the  service  of 
the  modems  back  to  Codex. 

Burr-Brown  handles  all  of 
the  maintenance  on  its 
modems  through  its 


subsidiary,  Dataforth, 
located  in  Tucson  AZ. 

Terms  are  return  to  factory; 
turnaround  is  usually  24 
hours. 

Q:  What  are  the  service 

offerings  for  PCs,  LANs,  and 
Helpdesk  from  GE 
Computer  Services? 

A:  GECS  offers  on-site  remedial 
maintenance,  installation 
service,  network 
maintenance,  carry-in  depot 
service,  and  custom  services 


11 

Novadyne  Computer  Systems 
now  has  an  on-line  systems 
diagnostics  and  disk  utility.  The 
System  On-Line  Maintenance 
Executive  (SOME)  software  will 
provide  remote  disk  error 
correction  for  its  Reality  line  of 
mini  and  supermini  computer 
systems.  SOME  can  be  installed 
via  modem  without  interrupting 
the  system. 

Hotsite,  the  disaster  recovery 
division  of  CompuSource,  has 
agreed  to  merge  with 
Continental  Computer 
Assurance  Corp.  (CCAC)  in 
Newton,  PA.  This  makes  the 
fourth  disaster  recovery  facility 
for  Hotsite.  Other  centers  are 
located  in  Cary  NC,  Niles  OH, 
and  Tewksbury  MA.  ■ 


on  personal  computers  and 
peripherals.  Standard 
features  include  repairs  due 
to  hardware  failure;  parts, 
labor  and  travel;  and  a toll- 
free,  24-hour,  7-day-a-week 
response  center.  Available 
options  include  after-hours 
serv'ice;  multi-year  contracts; 
remote-site  coverage;  flexible 
pricing  options;  expanded 
hours  coverage;  premium 
response  time;  and  a 
telephone  assistance  center.  ■ 


May  1991 


© 1991  by  INPUT.  Reproduction  prohibited. 


INPUT 


About  INPUT 


INPUT  provides  planning  information,  analysis,  and  recommendations  for  the 
infonnation  technology  industries.  Through  market  research,  technology 
forecasting,  and  competitive  analysis,  INPUT  supports  client  management  in 
making  infomied  decisions. 

Subscription  services,  proprietary  research/consulting,  merger/acquisition 
assistance,  and  multiclient  studies  are  provided  to  users  and  vendors  of  infonnation 
systems  and  services.  INPUT  specialises  in  the  software  and  services  industry 
which  includes  software  products,  systems  operations,  processing  services,  network 
services,  systems  integration,  professional  services,  turnkey  systems,  and  customer 
services.  Particular  areas  of  expertise  include  CASE  analysis,  infonnation  systems 
planning,  and  outsourcing. 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior  management 
positions  in  operations,  marketing,  or  planning.  This  expertise  enables  INPUT  to 
supply  practical  solutions  to  complex  business  problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a leading 
international  research  and  consulting  firm.  Clients  include  more  than  100  of  the 
world's  largest  and  most  technically  advanced  companies. 


INPUT  OFFICES 


North  America 

San  Francisco 

1280  Villa  Street 

Mountain  View,  CA  94041-1194 

Tel.  (415)  961-3300  Fax  (415)  961-3966 

New  York 

Atrium  at  Glenpointe 
400  Frank  W.  Burr  Blvd. 

Teaneck,  N|  07666 

Tel.  (201)  801-0050  Fax  (201 ) 801-0441 

Washington,  D.C. 

INPUT,  INC. 

1953  Gallows  Road,  Suite  560 
Vienna,  VA  22182 

Tel.  (703)  847-6870  Fax  (703)  847-6872 


International 

London 
INPUT  LTD. 

Piccadilly  House 

33/37  Regent  Street 

London  SWIY  4NF,  England 

Tel.  (071)  493-9335  Fax  (071)  629-0179 

Paris 

INPUT  SARL 

24,  avenue  de  Recteur  Poincare 
75016  Paris,  France 

Tel.  (33-1)  46  47  65  65  Fax  (33-1)  46  47  69  50 

Frankfurt 
INPUT  LTD. 

Sudetenstrasse  9 

D-6306  Langgons-Niederkleen,  Germany 
Tel.  (0)  6447-7229  Fax  (0)  6447-7327 

Tokyo 

INPUT  KK 

Saida  Building,  4-6 

Kanda  Sakuma-cho,  Chiyoda-ku 

Tokyo  101,  Japan 

Tel.  (03)  3864-0531  Fax  (03)  3864-4114 


INPUT 

Service 

Update 


ir 


£s.'':^ss^ 


Route: 


©INPUT 


A Publication  from  INPUT'S  Customer  Service  Prograw^jg^lnternational 


eC- 


June  1991 


IN 

1 .. 

aas^g 

...Sitestream — A Market-Led  Approach  to  Service  from  Unisys 

THIS 

5.. 

...News  from  the  U.S. 

ISSUE: 

6.. 

...Questions  from  the  U.S.  Hotline 

6.. 

...Snippets 

Sitestream — A Market-Led  Approach  to 
Service  From  Unisys 


The  maturity  of  the  IT 

market  is  an  issue  on  which 
the  minds  of  many  strategic 
thinkers  within  the  industry  are 
focussing.  A range  of  factors  are 
affecting  the  business,  such  as 
concerns  witliin  the  user 
community  over  the  benefits 
derived  from  IT  investments,  the 
slowdown  in  a number  of  IT 
market  segments  such  as,  for 
example,  the  hardware 
maintenance  operation,  and  the 
severe  squeeze  on  profitability 
currently  being  experienced  by 
the  majority  of  established 
equipment  manufacturers. 

Although  the  current  economic 
problems  in  the  U.S.  and  Europe 
undoubtedly  account  for  many 
of  the  difficulties  facing  the 
business,  it  is  increasingly 
recognised  that  the  industry  is 


moving  towards  the  mature 
phase  of  the  market  life  cycle,  as 
illustrated  in  Exhibit  1.  It  is 
anticipated  that  this  evolution 
will  be  accompanied  by  a 
change  of  marketing  emphasis 
within  the  industry,  which  will 
be  increasingly  driven  by  the 
following  factors; 

• Market  segmentation 

• Product  differentiation 

• An  increase  in  "buyer"  power 
at  the  expense  of  "supplier" 
power 

Companies  will  increasingly 
have  to  focus  closely  on  the 
needs  of  the  customer  and  to  use 
service  to  differentiate 
themselves  from  the 
competition.  Unisys  is  one 


company  that  is  seeking  to 
develop  a range  of  service 
products  to  satisfy  the  needs  of  a 
changing  market,  of  which 
"Sitestream"  is  the  first  example. 

INPUT  is  therefore  featuring 
this  service  because  it  provides  a 
good  example  of  the  range  of 
service  products  currently  being 
offered  by  Unisys  and  because  it 
serves  as  an  example  of  a 
development  that  addresses  the 
impact  of  the  environmental 
changes  facing  the  industry. 

Sitestream — The 
Product 

Sitestream  is  specifically 
designed  to  provide  a 
comprehensive  range  of  services 
for  a multisite  IS  project.  It 

Continued  on  next  page 


Service  Update 


2 


Sitestrearn...  from  page  1 

utilises  the  full  range  of  Unisys' 
expertise  in  customer  services, 
professional  services  and 
financial  planning  to  provide  a 
customised  business  solution 
that  complements  the  range  of 
skills  possessed  by  the  customer. 
The  key  aspects  of  the  service 
are  illustrated  in  Exhibit  2. 


Exhibit  1 

The  Market  Life  Cycle — A Reminder 

Revenue 


In  order  to  co-ordinate  the 
multi-disciplinary  requirements 
of  the  service,  Unisys  has 
established  a Sitestrearn 
business  team  tasked  with  the 
following  business  goal: 


"To  provide  quality  services  and 
products  in  pmrttiership  with 
organisations  to  enable  them  to 
implement  major  multi-site 
installations  to  time,  budget  and 
specification  whilst  ensuring 
minimum  disruption  to  the 
business." 

The  constituent  elements  of  the 
service  are  illustrated  in 
Exhibit  3. 

Although  the  elements 
contained  within  the  overall 
service  are  common  to  the 
integrated  service  products 
offered  by  the  majority  of 
vendors,  there  are  a number  of 
factors  that  differentiate  the 
approach  adopted  by  Unisys: 

• Care  is  taken  to  provide  a 
complete  project 
management  service  directly 
to  each  element  of  the 
business  included  within  the 
overall  project.  An  example 
of  this  approach  is  that  of  a 
multi-site  project 
implemented  in  one  of  the 
U.K.'s  major  breweries.  Each 
of  the  public  houses  included 
in  the  project  had  its  own 
project  plan  in  which  the 
publican  was  fully  involved. 
Unisys  is  careful  to  ensure 
that  all  the  client's  staff 
affected  by  a project  are  kept 
fully  involved;  Unisys  does 
not  simply  liaise  with  a 
central  point  of  contact. 

• An  intrinsic  element  of  the 
overall  approach  adopted  by 
the  company  is  the  stress 
placed  upon  the  importance 
of  joint  planning.  Sitestrearn 
is  regarded  as  the 
development  of  a partnership 


INPUT 


Cl  1991  by  INPUT.  Roproductlon  piohibiled 


June  1991 


Service  Update 


with  the  client  company  in 
which  the  strengths  of  the 
customer  are  complemented 
by  the  required  level  of 
support  from  Unisys.  The 
range  and  depth  of  talent 
employed  by  a company  the 
size  of  Unisys  is  seen  as  a 
resource  that  facilitates 
building  a high  degree  of 
flexibility  into  the  service 
product. 

• Considerable  emphasis  is 
placed  on  the  development  of 
the  client's  own  staff.  The 
identification  of  training 
needs  is  seen  as  a key  element 
of  the  product,  illustrating  the 
complementary  nature  of  the 
service.  Unisys  is  aware  that 
the  success  of  a Sitestream 
project  is  heavily  dependent 
on  the  ability  and  motivation 
of  the  customer's  staff  to  gain 
maximum  benefit  from  the 
technology. 

The  Market 

As  has  been  stated,  Sitestream  is 
the  first  of  a series  of  service 
products  that  Unisys  is 
developing  in  response  to  the 
environmental  factors  facing  the 
industry.  It  is  therefore  the 
result  of  a significant  marketing 
effort  on  the  part  of  the 
company  to  ensure  that  the 
product  satisfies  a defined 
customer  need.  The  following 
points  were  identified  as  the 
principal  factors  dictating  the 
form  of  the  service: 

• The  networking  market,  as 
one  of  the  two  fastest 
growing  sectors  within  the  IT 
market  (the  laptop  market 
being  the  other),  is  leading  to 
growth  in  the  number  of 
multisite  installations. 


3 


Exhibit  2 

Sitestream — The  Key  Elements 

— 

• A multisite  service  product 

• Customised  to  complement  the 
skills  of  the  client 

• A total  service  solution 
incorporating: 

- Customer  services 

- Professional  services 

- Financial  planning 


Source:  INPUT 


• A number  of  organisational 
issues  are  increasing  the 
strategic  importance  of  the 
branch  office  activities  of 
large  corporations.  Such 
factors  include: 

- The  delegation  of  opera- 
tional decision  making  to 
the  actual  site  of  business 
activity.  Branch  managers 
are  increasingly  being  given 


Continued  on  next  page 

Exhibit  3 

The  Constituent  Parts 

• Project  management  and  consultancy 

• Education  and  training 

• Environmental  design  and  consultancy 

• Software/hardware  integration  and  support 

• Network  design  and  commissioning 

• Project  finance 

• Maintenance  and  support 

Source:  INPUT 

June  1991 


0 1991  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 


4 


Sitestrea?!!. . . from  page  3 

the  responsibility  of  run- 
ning their  own  business, 
thereby  increasing  the 
strategic  importance  of 
remote  sites  and  the  need  to 
supply  quality  information 
to  the  decision  maker. 

- The  increased  attention 
being  given  to  the  impor- 
tance of  customer  satisfac- 
tion is  leading  to  an  invest- 
ment in  the  technical  infra- 
stnicture  installed  at  the 
point  of  customer  contact. 

- The  increasing  acceptance 
by  senior  management  of 
the  importance  of  IT  as  a 
strategic  business  tool. 

• Although  these  factors 
obviously  provide 
considerable  opportunities 
for  the  DP  department  within 
user  organisations,  they  also 
present  a number  of 
problems  in  terms  of,  for 
example: 

- Shortages  of  appropriately 
qualified  staff 

- A lack  of  experience  in  the 
project  management  of 
con\plex  multisite  projects 

- The  need  to  identify  train- 
ing requirements  for  staff  at 
remote  sites  with  little 
previous  exposure  to  the 
administration  of  IT  sys- 
tems 

• Despite  the  potential  of  IT  to 
assist  in  the  realisation  of  a 
strategic  goal,  the  user 
community  has  a low 


expectation  of  success  from 
investment  in  IT.  In  response 
to  this  scepticism,  Unisys  has 
paid  particular  attention  to 
the  need  to  provide,  and  to  be 
seen  to  provide,  a well 
focussed,  well  planned, 
quality  service  that  meets  the 
operational  requirements  of 
the  client  and  is  also 
delivered  on  time  and  within 
budget.  This  factor  also 
explains  the  stress  placed  on 
human  factors  within  the 
provision  of  the  service.  It  is 
known  that  such  projects  will 
only  succeed  if  all 
participants  accept  the 
operational  benefits  to  be 
derived  and  are  sufficiently 
well  trained  to  manage  the 
technology  confidently. 

In  addition  to  the  fact  that  the 
design  of  the  product  closely 
reflects  these  factors,  one  further 
point  reinforces  the  market-led 
approach  adopted  by  the 
company.  Sitestream  is  a U.K. 
product,  tailored  specifically  for 
requirements  identified  within 
the  U.K.  market.  Although 
other  European  operations  are 
looking  at  the  provision  of 
similar  products,  the  intention  to 
offer  Sitestream  as  a pan- 
European  service  is  being 
carefully  evaluated.  It  will  be 
the  responsibility  of  individual 
country  operations  to  identify 
specific  market  requirements 
and  to  develop  products  to  meet 
defined  needs. 

INPUT  Comments 

Although  the  contents  of 
Sitestream  as  a service  product 
appear  to  be  similar  to  many  of 
the  services  currently  being 


promoted  within  the  market,  the 
importance  of  the  product 
should  not  be  underestimated. 

It  provides  a clear  example  of  an 
approach  to  service  product 
development  that  accounts  for 
the  environmental  factors 
influencing  the  industry  and 
that  is  directly  focussed  on  the 
needs  of  the  market. 

The  methodology  adopted  in  the 
development  of  Sitestream 
provides  an  interesting 
comparison  to  the  way  Digital 
has  approached  the  marketing 
of  the  service  product.  Digital, 
by  combining  the  professional 
services  and  customer  services 
operations,  is  providing  a wide- 
ranging  service  package  that 
includes  the  definition  of  a 
business  problem  and  offers  the 
resources  necessary  to  provide  a 
solution  to  the  problem.  The 
boundaries  of  the  business  areas 
that  the  service  is  intended  to 
serve  remain  undefined, 
implying  that  the  service  is 
regarded  as  a resource  to  be 
applied  to  a wide  range  of 
problems  rather  than  a product 
aimed  at  a specific  market. 

Unisys,  however,  has 
consciously  sought  to  define  a 
specific  market  need  that 
satisfies  two  key  requirements: 

• It  must  offer  a level  of 
demand  to  generate  a 
profitable  rate  of  return  for 
the  company. 

• It  must  utilise  the  areas  of 
expertise  possessed  by  the 
company  in  order  to  permit 
the  creation  of  a sustainable 
competitive  advantage. 


INPUT 


© 199)  by  INPUT.  Reproduction  prohibited. 


June  1991 


5 


Silcslream  was  designed  to  meet 
both  the  defined  needs  of  the 
target  market  and  the  specified 
business  objectives  of  Unisys. 

It  should  be  stressed  that 
Sitestream  is  the  first  of  a range 
of  service  products  that  Unisys 


is  currently  developing,  all  of 
which  will  evolve  from  a clear 
focus  on  the  needs  of  the 
defined  market  segment  being 
attacked.  The  importance  of 
Sitestream  is  derived,  therefore, 
not  so  much  from  the  contents 
of  the  service  itself,  but  in  the 


News  from 
the  USA 


'8S888SS888886881 


Novadyne  Teams  with 
Secure  Systems  Group 

Novadyne  Computer  Systems, 
Inc.  has  announced  the  signing 
of  a joint  services  agreement 
with  Secure  Systems  Group,  Inc. 
of  Irvine,  CA.  Secure  Systems 
Group  (SSG)  is  a supplier  and 
maintainer  of  TEMPEST  and 
mggedized  computer  products. 

The  agreement  provides  single- 
source hardware  and  software 
service  packages  to  customers 
who  require  TEMPEST  and  non- 
TEMPEST  systems  maintenance. 
The  companies  will  jointly 


market  the  services  to  airrent 
customers  and  prospects.  For 
most  TEMPEST  sites,  SSG  will 
be  responsible  for  the  TEMPEST 
equipment  and  Novadyne  will 
handle  the  maintenance  of  the 
non-TEMPEST  equipment. 

New  Disaster  Recovery 
Services  available  for 
Amdahl 

Amdahl  Corporation  has 
announced  three  new  disaster 
recovery  services:  disaster 
recovery  planning  and 
implementation,  disaster 
recovery  audits,  and  disaster 


strategic  thinking  that 
underpins  it. 

The  potential  success  of  the 
approach  can  be  judged  by  the 
positive  response  Unisys 
received  in  the  early  days  of 
launching  the  service.  ■ 


recovery  business  impact 
analysis.  These  services  are 
designed  to  aid  the  successful 
recovery  of  computer  resources, 
as  well  as  the  continued 
processing  of  critical  data,  when 
a catastrophe  occurs. 

The  disaster  recovery  planning 
services  are  designed  to  assess 
the  exposure  of  the  company  if 
there  is  a prolonged  or 
indeterminate  loss  of  the  data 
center,  and  then  be  able  to  plan 
for  that  occurrence.  The  disaster 
recovery  audit  is  an 
independent,  objective  audit  of 
the  effectiveness  and  reliability 
of  the  existing  disaster  plan. 

The  business  impact  analysis 
provides  an  evaluation  of  the 
operating,  financial,  and 
regulatory  impact  of  a data 
center  disaster. 

The  services  are  available 
internationally  and  range  in 
price  from  $25,000  to  $200,000.  ■ 


June  1991 


© 1991  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 


6 


Questions 
from  the  U.S. 
Hotiine 


Q:  Has  IBM  enhanced  its 
EMO  program  in  the  last 
year? 

A:  IBM  has  enhanced  the 
EMO  program  to  include 
selected  installed 
machines,  as  well  as  new 
machines.  Commercial 
customers  may  select 
contract  terms  from  24  to 
60  months  for  new 
machines,  and  installed 
equipment  not  currently 
being  marketed.  State  and 
local  government 
customers  may  select 


contract  tenns  from  12  to  60 
months  for  new  machines 
and  up  to  60  months  for 
currently  installed 
machines.  Proposals  are 
price  protected  for  one 
month. 

Q;  How  dows  HP's  predictive 
maintenance  for  the  HP 
3000  work? 

A:  The  predictive  support 
service  allows  customers  to 
use  the  HP  proprietary 
Predictive  Support 
software,  which  reads  and 
analyzes  system  and 
peripheral  logfiles  and 
prints  a status  report  on  the 
system's  functioning.  The 
software  will  also  send  data 
to  HP's  Response  Center  for 
further  analysis  and 
diagnosis  by  HP  customer 
engineers,  who  will 
determine  if  any  on-site 
action  is  necessary.  ■ 


Snippets 


❖ Hoskyns  PLC  reported  an  8%  drop  in 
turnover  to  £102.8  million,  although 
pre-tax  profits  rose  5%  to  £8.6  million. 
The  company  is  anticipating  that 
business  will  continue  to  be  adversely 
affected  by  the  economic  downturn 
and  sees  no  sign  of  an  upturn  in  the 
market. 

♦t*  Digital  has  opened  a £1  million 

disaster  recovery  centre  on  the  Isle  of 
Man  in  the  U.K.,  currently  supporting 
three  contracts. 


❖ Siemens  Nixdorf  Informationssysteme 
had  a loss  of  $214  million  on  a turnover 
of  $2,872  for  the  6 months  to  March  31, 
but  is  currently  seeing  an  increase  in  its 
order  books. 

❖ A "non-threatening"  facilities 
management  service  has  been  launched 
by  the  U.K.'s  Gatton  Synthesis  Ltd.  The 
intention  is  to  relieve  DP  departments  of 
application  support  responsibilities, 
thereby  allowing  them  to  concentrate  on 
new  developments. 


INPUT 


© 1991  by  INPUT.  Roprodudion  prohibllecl. 


June  1991 


Service  Update 


7 


U.S.  Snippets 


Wyse  has  recently  released  four  new 
and  revised  service  programs.  The  first. 
Quality  on  Arrival  (QOA),  provides  a 
new  procedure  for  returning  defective 
products.  End  users,  VARs,  or 
distributors  retum  the  products  directly 
to  Wyse,  which  repairs  it  and  sends  it 
back  within  five  business  days  of 
receipt.  The  next  program  has  extended 
the  VP  Express  to  include  repairs  or 
exchanges  of  board-level  products 
within  48  hours  via  Federal  Express  at 
Wyse's  expense.  The  third  has 
combined  the  customer  and  technical 
support  services  into  one  toll-free 
telephone  support  service.  Clients  are 
no  longer  shuffled  from  one  to  another. 
The  fourth  is  a change  in  the  discount 
program.  Wyse  resellers  and  end  users 
can  purchase  reconditioned  equipment 
at  up  to  a 75%  discount. 

Sun  has  increased  its  network  offerings 
through  strategic  partnership 
agreements  with  AT&T  Computer 
Systems  (cabling  and  networking 
products  and  services  to  Sun  for  resale 
to  its  coustomers),  Anixler  Brothers, 
(cabling  and  network  components 
including  bridges,  repeaters,  and 
connectors),  and  Cabletron  (offering 
Cabletron's  complete  line  of  network 
products  and  services). 


Interactive  Communications,  a service 
bureau,  is  offering  UNIX  support 
through  a 900  number  at  the  rate  of 
$1.99  per  minute.  The  1-900-USA-UNIX 
is  staffed  by  professionals  from  Today's 
Computers  Business  Centers. 

♦t*  NCR  and  Amdahl  have  signed  an 
agreement  with  Bell  Atlantic  Business 
Systems  Services  (BABSS)  to  provide 
maintenance  on  their  equipment  as 
subcontractors. 

On-Line  Software  has  introduced  an 
automated  installation  management 
system  for  its  ProSeries  called  Prolnstall. 
The  system  provides  a centralized,  on- 
line facility  for  installing  and 
maintaining  all  ProSeries  products. 


June  1991 


© 1Q91  by  INPUT.  Roproduclion  prohlbHod, 


INPUT 


About  INPUT 


INPUT  provides  planning  information,  analysis,  and  recommendations  for  the 
infonnation  technology  industries.  Through  market  research,  technology 
forecasting,  and  competitive  analysis,  INPUT  supports  client  management  in 
making  informed  decisions. 

Subscription  services,  proprietary  research/consulting,  merger/acquisition 
assistance,  and  multiclient  studies  are  provided  to  users  and  vendors  of  infonnation 
systems  and  services.  INPUT  specialises  in  the  software  and  services  industry 
which  includes  software  products,  systems  operations,  processing  services,  network 
services,  systems  integration,  professional  services,  turnkey  systems,  and  customer 
services.  Particular  areas  of  expertise  include  CASE  analysis,  infonnation  systems 
planning,  and  outsourcing. 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior  management 
positions  in  operations,  marketing,  or  planning.  This  expertise  enables  INPUT  to 
supply  practical  solutions  to  complex  business  problems. 

Fonned  as  a privately  held  corporation  in  1974,  INPUT  has  become  a leading 
international  research  and  consulting  firm.  Clients  include  more  than  100  of  the 
world's  largest  and  most  technically  advanced  companies. 


INPUT  OFFICES 

North  America  International 


San  Francisco 

1280  Villa  Street 

Mountain  View,  CA  94041-1194 

Tel.  (415)  961-3300  Fax  (415)  961-3966 

New  York 

Atrium  at  Glenpointe 
400  Frank  W.  Burr  Blvd. 

Teaneck,  NJ  07666 

Tel.  (201)  801-0050  Fax  (201)  801-0441 


London— INPUT  LTD. 

Piccadilly  House 

33/37  Regent  Street 

London  SWIY  4NF,  England 

Tel.  (071)  493-9335  Fax  (071)  629-0179 

Paris— INPUT  SARL 

24,  avenue  de  Recteur  Poincare 

75016  Paris,  France 

Tel.  (33-1 ) 46  47  65  65  Fax  (33-1 ) 46  47  69  50 


Washington,  D.C. 

INPUT,  INC 

1953  Gallows  Road,  Suite  560 
Vienna,  V A 22182 

Tel.  (703)  847-6870  Fax  (703)  847-6872 


Frankfurt— INPUT  LTD. 

Sudetenstrasse  9 

D-6306  Langgons-Niederkleen,  Germany 
Tel.  (0)  6447-7229  Fax  (0)  6447-7327 

Tokyo— INPUT  KK 
Saida  Building,  4-6 
Kanda  Sakuma-cho,  Chiyoda-ku 
Tokyo  101,  Japan 

Tel.  (03)  3864-0531  Fax  (03)  3864-4114 


Route: 


INPUT 

Service 

Update 


© INPUT 


A Publication  from  INPUT’S  Customer  Service  Programme — International 


July  1991 

IN 

1 .. 

...Applied  Learning  International 

THIS 

6 .. 

...News  from  the  USA 

ISSUE: 

6.. 

7.. 

...Snippets 

...U.S.  Snippets  iltol'fefiil  I 

Applied  Learning  International 


This  month  the  Service 
Update  is  viewing  the 
training  market  by  profiling 
Applied  Learning  International, 
one  of  the  leading  independent 
training  companies  operating  in 
Western  Europe.  Because  IS 
training  is  one  of  the  rapidly 
growing  segments  of  the 
customer  services  market 
(INPUT  is  forecasting  a 
compound  annual  growth  rate 
of  14%  for  the  IS  training  market 
up  to  1996),  the  approach 
adopted  by  a leading  company 
in  the  market  will  be  of  interest 
to  equipment  vendors  that  are 
increasingly  merging  the 
operations  of  their  customer 
services  and  professional 
services  operations. 


The  Company 

Applied  Learning  International 
is  one  of  the  leading  providers 
of  Technology-Based  Training 
(TBT)  worldwide.  The  training 
delivery  modes  are  via 
interactive  terminals  handling  a 
variety  of  multimedia  training 
products.  Delivery  to  the 
customer  is  by  courier  from  a 
warehouse. 

Applied  Learning  International 
was  founded  at  the  end  of  1987 
as  a result  of  a merger  between 
two  companies.  Advanced 
Systems  Incorporated  (ASI)  and 
Deltak  Training  Corporation. 
Previously  these  two  companies 
were  competitors,  each 


supplying  training  products  and 
services — in  part  related 
products  and  services,  in  part 
related  to  the  implementation  of 
infonnation  technology  in  user 
organisations. 

The  new  company  resulting 
from  the  merger.  Applied 
Learning  International,  is  a 
wholly  owned  subsidiary  of 
National  Education  Corporation 
(NEC),  which  is  based  in 
California,  USA.  Applied 
Learning  is  the  largest  division 
of  NEC.  Other  divisions 
include: 

• International  Correspondence 
Schools  (ICS) 


Continued  on  next  page 


Service  Update 


2 

ALI . . .from  page  1 

• Steck-Vaughin,  an 
educational  publishing 
company 

• Motivation  Systems  and  Sales 
Training  Company 

• Vocational  schools 

Worldwide  NEC  achieved  just 
over  $370  million  in  revenue  in 
1990.  Although  this  revenue 
indicates  a progressive  decline 
from  almost  $460  million  in  1988 
and  a net  loss  for  1989  ($29 
million  approx.)  and  1990  ($15 
million  approx.),  these  changes 
are  explainable.  A revenue 
decline  of  about  $31  million 
between  1989  and  1990  is 
attributed  to  Applied  Learning 
training  and  publishing 
revenues  and  is  due  to  the 
introduction  of  new  terms  and 
conditions  for  customer 
contracts  that  result  in  shorter 
contracts  and  more  closely 


matched  revenue  and  cash 
receipts.  The  result  in  contract 
terms  is  to  reduce  revenue  from 
multiple-year  contracts. 

A summary  of  the  financial 
results  of  the  parent  company, 
NEC,  is  provided  in  the 
Exhibit  A. 

Applied  Learning  is  listed  on  the 
New  York  Stock  Exchange 
under  the  name  of  National 
Education;  the  stock  is  a Capital 
Growth  Fund  in  which  all 
profits  are  reinvested  back  into 
the  company. 

Applied  Learning  International 
is  divided  into  two  operational 
units — Domestic  USA  and 
International.  The  International 
division  is  responsible  for  all 
marketing  and  sales  outside  the 
USA,  and  the  products  are 
marketed  in  50  countries 
through  70  offices. 
Representation  in  some 
countries  is  through 


independent  distributors,  and 
all  country-level  subsidiaries 
and  distributors  report  to 
International.  The  International 
management  team  resides  in  the 
U.K.  Head  Office,  which  is 
located  in  Chiswick  on  the 
outskirts  of  London.  However, 
a number  of  International  staff 
are  also  based  in  the  Corporate 
Headquarters  in  Chicago,  USA. 
In  addition  to  the  management 
of  the  two  operating  divisions,  a 
Corporate  Executive  Committee 
co-ordinates  worldwide 
activities. 

The  U.K.  company  is  the  largest 
subsidiary  of  International. 

The  distribution  of  NEC 
revenues  by  geographic  region 
is  illustrated  in  Exhibit  B. 

The  Training  Protducts 

All  training  products  provided 
by  Applied  Learning  are  based 
on  Technology-Based  Training 
(TBT)  and  are  delivered  as 


Exhibit  A 


National  Education  Corporation 
Worldwide  Five-Year  Financial  Summary 
($  Thousands) 


Year 

1986 

1987 

1988 

1989 

1990 

Net  Revenue 

319,047 

396,163 

457,477 

400,828 

371,394 

Net  Income 
(Loss) 

15,191 

(679) 

46,147 

(29,341) 

(14,939) 

Source:  INPUT 


INPUT 


© 1991  by  INPUT.  Reproduclion  pfohfbltod. 


July  1991 


Service  Update 


Exhibit  B 

National  Education  Corporation 
Geographic  Revenue 


Geographic 

Region 

Percentage  of  Revenue 

1988 

1989 

1990 

USA 

80 

81 

83 

Europe 

12 

12 

9 

Canada 

5 

5 

5 

Other  Foreign 

3 

2 

3 

Total 

100 

100 

100 

Source:  INPUT 


multimedia  packages  designed 
to  run  on  interactive  terminals. 
The  media  used  for  training 
include: 

• Computer-based  training 
(mainframe  and  micro) 

• Interactive  video  instruction 

• CD-ROM 

• Linear  videotape 

• Audiotape 

In  cases  where  "live"  training  is 
required,  this  function  would  be 
contracted  out  by  Applied 
Learning. 

The  training  provided  focusses 
on  five  key  areas: 

• Information  professionals — 
aimed  at  technology 


July  1991 


management.  This  is  the  core 
activity  of  Applied  Learning 
and  accounts  for  about  60% 
of  AL's  business  in  Western 
Europe.  Within  this  area, 
activities  are  mostly 
concerned  with  the 
mainframe  environment  and 
are  designed  to  help 
customers  use  mission-critical 
information  technologies  as 
strategic  business  tools,  and 
they  aim  to  provide  the 
management  skills  needed  to 
take  full  advantage  of  the 
systems.  The  scope  of 
training  ranges  from 
programming  to 
management  skills  and 
includes: 

- Strategic  uses  of  computing 

- Information  engineering 

- CASE  tools 


© 1991  by  INPUT.  Reproduction  ptohibrted. 


3 

- Artificial  intelligence  and 
expert  systems 

- Client/server  model 

- Networks  as  a vital 
business  link 

- Systems  Application 
Architecture 

- Relational  database 
management  systems 

- Managing  strategic  systems 

• Departmental  computing — 
aimed  at  information- 
processing skills  primarily  for 
midrange  systems  but  also 
including  mainframes. 
Programmes  focus  on  both 
proprietary  and  open 
systems;  provide  for  the  skill 
needs  of  analysts, 
programmers  and  operations 
staff;  and  range  from  entry- 
level  to  management 
positions.  Included  within 
the  scope  of  this  training  is: 

- Entry  level  and 
programming 

- Systems  analysis  and 
design 

- Systems  Application 
Architecture 

- MVS,  VM,  VSE,  VSl 

- AS/400,  System/36, 
System/38 

- Digital 

- UNIX 


Continued  on  next  page 

INPUT 


4 


/ILi  ..  .from  page  3 

- Database  and  fourth- 
generation  languages 

- DB2andSQL 

- IMSandIDMS/R 

- Data  communications  and 
networks 

- CICS 

• End-user  computing — aimed 
at  providing  courses  to  help 
people  in  all  areas  of  an 
organisation  to  apply  new 
technologies  to  achieve 
business  goals.  The  courses 
can  be  customised  to  include 
training  on  data  security, 
office  automation  and 
mainframe  or  microcomputer 
systems.  Courses  include: 

- Information  centre 
overview 

- Computing  fundamentals 

- Personal  computing 

- Mainframe  computing 

- Departmental  computing 

- Office  information  systems 

• Manufacturing — aimed  at 
providing  comprehensive 
training  related  to  the 


acquisition  of  manufacturing 
and  industrial  skills.  Courses 
focus  on  modem  integrated 
manufacturing  (MIM) 
technologies,  new  technical 
skills  and  the  people  issues 
involved  in  MIM 
implementation.  Courses 
include: 

- Total  Quality  Management 
(TQM) 

- Industrial  skills 

- Just-in-time  (JIT) 

- People,  organisation  and 
culture 

- MRP  II 

- Computer-integrated 
manufacturing  (CIM) 

- Purchasing 

Applied  Learning  also  provides 
a range  of  human  resources 
development  courses. 

The  company  is  active 
throughout  Western  Europe, 
and  the  revenues  in  this 
geographic  area  were  almost 
$45  million  in  1990.  The 
geographic  breakdown  of 
Applied  Learning  International 
revenues  in  Western  Europe  is 
tabulated  in  Exhibit  C. 


The  Issues 

The  two  key  issues  raised  by 
Applied  Learning  are: 

• The  pace  of  change  within  the 
IT  industry  as  a whole, 
including  organisations  and 
products/systems.  The  key 
challenge  presented  by  this 
issue,  for  Applied  Learning, 
is  supporting  the 
management  of  this  change. 

• Implementation  of  workplace 
on-line  training  tools  and 
support.  The  key  challenge 
for  Applied  Learning  in  this 
area  is  being  able  to  provide 
reference  information  to 
support  user  training  needs. 

Other  issues  raised  by  Applied 
Learning  International  related  to 
training  activities  in  Europe 
include  the  following: 

• The  information  services 
function  within  companies  is 
becoming  more  decentralised. 
Therefore,  training  needs 
throughout  companies  are 
becoming  more  fragmented. 
The  challenge  is  how  to 
extend  the  range  of  contacts 
from  the  original  single 
contact  in  an  organisation  in 
order  to  handle  and  penetrate 
a fragmented  organisation. 


INPUT 


O 1991  by  INPUT.  Reproduction  prohlbKod. 


July  1991 


Service  Update 


5 


Exhibit  C 

Applied  Learning  International 
European  Revenues  by  Geographic  Region 


Geographic 

Revenue  ($  Millions) 

Region 

1988 

1989 

1990 

UK/Eirei 

28.6 

30.4 

31.3 

Beneiux^ 

2.5 

2.8 

3.2 

GermanyV 

Switzeriand^/Austria^ 

8.9 

8.7 

8.8 

France/italy/  3 
Spain/Portugai 

0.3 

0.4 

0.4 

Scandinavia/  2 
Finland 

0.6 

0.8 

0.9 

Total 

40.9 

43.1 

44.6 

Annual  Growth 
(Percent) 

5.5 

3.5 

Notes:  1 indicates  subsidiaries 

2 indicates  distributors 

3 indicates  agencies  Source:  INPUT 


an  attempt  to  retain  control. 
The  challenge  for  Applied 
Learning  is  to  manage  the 
change  from  single-contract 
mode  and  the  change  in  user 
working  practices. 

• New  releases  of  industry 
standard  software,  for 
example  Lotus  1-2-3,  create 
problems  related  to  course 
development.  Lack  of  prior 
knowl^ge  concerning  the 
final  release  of  software 
delays  the  course 
development  process.  The 
challenge  is  how  to  pre-empt 
these  delays. 

Applied  Learning  has  found 
that  industry  recession  does 
cause  users  to  reduce  or  cancel 
training  budgets.  However,  the 
company  suggested  that  some 
users  take  a more  sensible 
approach  during  recessionary 
periods  by  taking  advantage  of 
the  recession  to  re-skill  for  the 
future.  Further,  Applied 
Learning  believes  that  recession 
causes  improvements  in  the 
focus  that  users  apply  to 
business  needs  and  that  this 
factor  can  be  beneficial  in  the 
long  term.  ■ 


• Historically  the  company  has 
sold  one-,  three-  or  five-year 
training  contracts.  The 
mechanism  is  that  the 
customer  would  purchase  a 
quantity  of  training  units, 
which  differ  in  size  and  value 
depending  on  the  size  of  the 
contract.  The  use  of  these 
training  units  can  be 


July  1991 


organised  to  suit  the 
customer's  needs  during  the 
contract  period.  An  issue 
related  to  this  business 
methodology  is  that  when  a 
user  organisation 
decentralises,  the  original 
single  contact  retains  the 
training  units  available, 
rather  than  disperses  them,  in 


C 1991  by  INPUT.  R^roduction  prohibited. 


INPUT 


Service  Update 


News  from 
the  USA 


Snippets 


The  sale  of  the  TRW  Customer  Services  Division  to  Phoenix 
Technologies  has  fallen  through.  TRW  states  that  the  agreement  to 
be  acquired  has  expired  and  that  TRW  is  not  seeking  new  buyers. 
The  Customer  Services  Division  will  remain  as  part  of  TRW 
Information  Systems  and  Services  Group. 


♦J*  Bull  has  established  a sales  office  in  Prague,  Czechoslovakia  and 
has  plans  for  a second  Czechoslovakian  office  in  Bratislava.  The 
company  forecasts  the  doubling  of  sales  through  these  offices 
year-on-year  in  the  short  term. 

***  Toshiba  has  announced  the  opening  of  a subsidiary  company  in 
the  Netherlands  to  market  PCs,  fax  machines  and  printers. 

<•  Granada  Computer  Services  (U.K.)  has  announced  the  promotion 
of  Jeff  Stanton  to  the  position  of  managing  director.  The 
appointment  will  pennit  Peter  Edwards  (managing  director  of 
Granada  Computer  Services  Europe)  to  concentrate  on  the 
strategic  development  of  the  European  business.  The  company 
has  also  announced  the  winning  of  a £100,000  contract  to 
maintain  the  shared  computer  unit  of  Avon  County  Council  and 
Bristol  City  Council  in  the  U.K. 

*t*  Unisys  and  KPMG  Peat  Marwick  have  reached  agreement  on  a 
long-term  business  alliance.  The  arrangement  includes  the  joint 
development  and  marketing  of  systems  software  products 
covering  software  engineering  and  4GL  products. 


INPUT 


e 1991  by  INPUT.  Reproduction  probibited. 


July  1991 


U.S.  Snippets 


❖ AT&T  and  NCR  have  created  five  transition  teams  to  oversee  the 
merger  of  the  two  businesses.  The  team  in  charge  of  the  service 
division  is  the  Marketing,  Sales,  and  Hardware  and  Software 
Support  team.  It  consists  of  seven  NCR  executives  and  eight 
AT&T  executives.  Gary  Burnett,  VP  Customer  Services, 
represents  NCR,  and  Curtis  Crawford,  VP  Sales,  Services,  and 
Support,  represents  AT&T. 

Diebold  has  completed  the  first  two  of  five  steps  in  phasing  IBM 
ATM  service  clients  over  to  Diebold  service.  These  phases  are 
for  custoniers  in  the  eastern,  western,  midwestem,  southeastern, 
and  central  U.S. 

*t*  Bell  Atlantic  Business  Systems  Services  is  offering  a free  copy  of 
its  booklet,  "Maintenance  Tips  for  Your  Microcomputer."  Send  a 
self-addressed,  stamped  envelope  to:  PC  Maintenance  Tips, 
Suite  1300,  21 1 E.  Ontario  St.,  Chicago,  IL  6061 1 . 


❖ 


Prime  Computer  has  signed  a joint  marketing  agreement  with 
Software  Clearing  House  Inc.  to  provide  Prime  customers  with 
more  than  30  software  products  and  support  for  systems  running 


UNIX. 


Triticom  has  signed  an  agreement  with  Intelogic  Trace  (IT)  to 
incorporate  its  product,  WatchIT,  into  IT's  LAN  support  product, 
Tech-In-The-Box. 


***  NCR  has  expanded  its  hot-site  disaster  recovery  facility  in  its 
Software  Distribution  Center.  The  new  hot  site  is  a result  of  the 
merger  between  its  Data  Services  and  Customer  Services  Disaster 
Recovery  Services.  The  expanded  site  is  expected  to 
accommodate  at  least  100  potential  customers;  there  are  currently 
50  clients  for  disaster  recovery  services. 


July  1991 


© 1991  by  INPUT,  Reproduction  prohibited 


INPUT 


INPUT  provides  planning  infonnalion,  analysis,  and  recommendations  for  the 
information  technology  industries.  Through  market  research,  technology 
forecasting,  and  competitive  analysis,  INPUT  supports  client  management  in 
making  infomied  decisions. 

Subscription  services,  proprietary  rescarch/consulting,  merger/acquisition 
assistance,  and  multiclient  studies  are  provided  to  users  and  vendors  of  information 
systems  and  services.  INPUF  specialises  in  the  software  and  services  industry 
which  includes  software  products,  systems  operations,  processing  services,  network 
services,  systems  integration,  p^rofessional  services,  turnkey  systems,  and  customer 
services.  Particular  areas  of  expertise  include  CASE  analysis,  itiformation  systems 
planning,  and  outsourcing. 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior  management 
positions  in  operations,  marketing,  or  planning.  This  expertise  enables  INPUT  to 
supply  practical  solutions  to  complex  business  problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a leading 
international  research  and  consulting  firm.  Clients  include  more  than  100  of  the 
world's  largest  and  most  technically  advanced  companies. 


INPUT  OFFICES 


North  America 


San  Francisco 

1280  Villa  Street 

Moui^ain  View,  CA  94041-1194 

Tel.  (415)  961  -3300  Fax  (415)  961-3966 

New  York 

Atrium  at  Clenpointe 
400  Frank  W.  Burr  Blvd. 

Tea  neck,  N]  07666 

Tel.  (201)801-0050  Fax  (201)801-0441 

Washington,  D.C. 

INPUT,  INC 

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Vienna,  V A 22182 

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INPUT 

Service 

Update 


© INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — International 


August  1991 


IN 

THIS 

ISSUE; 


1 Unisys  Launches  Enhanced  Network  Services 

9 EuroPACE — An  Innovative  Training  Operation 

12  ....  ICL-Bell  Atlantic  Joint  Venture 
12  ....NCR-AT&T  Merger 
News  from  the  U.S. 

13  Novadyne:  A New  U.S.  Independent  Maintenance  Company 

14  News  from  the  U.S.  Enquiry  Service 

14  ....Snippets 


Call  CONNECT 
Unisys  Set  to  Launch 
Enhanced  Network  Services 


Unisys  is  set  to  launch  a 
revised  version  of 
CONNECT  its  network 
services.  The  launch,  which  will 
take  place  through  country 
subsidiary  organisations,  is 
scheduled  for  September  1991 
and  will  be  followed  by  a launch 
programme  to  user  groups  in 
October  1991. 

'I  he  original  CONNECT 
programme  was  announced  by 
Llnisys  in  April  1990  and  was 


the  subject  of  a detailed  profile 
by  INPUT  in  the  June  1990  issue 
of  Service  Update. 

In  describing  the  extent  of  the 
new  CONNECT  programme 
Unisys  quotes: 

"The  traditional  approach  to 
network  support  is  to  consider 
ISLANDS.  Unisys  CONNECT 
considers  TOTAL  ENIJ  ITES". 


Unisys  further  quotes  that: 

"The  objective  of  CONNECT 
and  the  reasoning  behind  it  is  to 
make  networking  as  easy  as 
possible  for  all  types  of  user". 

In  the  original  CONNECT 
service,  Unisys  integrated  its 
customer  services  offerings  in  an 
approach  that  concentrated  on 
physical  networks.  With  the 
launch  of  the  new  CONNECT 
service,  Unisys  is  integrating  all 
its  service  operations  into  a total 
cohesive  approach  to 
networking,  addressing  both  the 
physical  and  logical  aspects. 


Continued  on  next  page 


Service  Update 


Uiiisi/s..  .from  page 


CONNECT  Considers  Networks  as 
Total  Entities — Not  as  Islands". 


The  new  CONNECT  service 
ranges  from  conceptual  phase 
through  full  implementation. 

1 he  changes  made  to 
CONNEC  T reflect  a much  wider 
service  offering  achieved  by 
integrating  the  services  of 
Unisys'  Professional  Services 
Division  and  its  Customer 
Services  Organisation — and 
using  this  to  provide  a bridge 


between  these  and  other 
appropriate  Unisys 
organisations. 

I'urther,  the  new  CONNECT 
service  is  designed  to  look  at 
networks  from  the  customer's 
viewpoint,  recognising  that 
networks  have  a designed  life 


cycle  and  that  it  is  necessary  to 
understand  where  the  network 
is  in  this  life  cycle.  Unisys  now 
claims  that  CONNECT  is 
structured  to  meet  network  life 
cycle  requirements.  For 
example,  the  services  oriented 
towards  network  life  cycle,  as 
defined  by  Unisys,  are 
illustrated  in  Exhibit  A. 


As  a consequence  of  the  new 
CONNECT  service,  a customer 
need  no  longer  be  concerned 


with  the  Unisys  service 
infrastructure,  and  indeed, 
Unisys  claims  that  the  customer 
need  not  even  know  specifically 
what  is  required.  All  the 
customer  needs  to  do  is  call 
CONNECT.  With  their  first  call, 
customers'  answers  to  key 
questions  provide  guidance 
about  their  requirements.  From 
this  point,  an  appropriate 
resource  can  be  identified  to 
explore  and  address  the 
customers'  requirements 
further. 

CONNECT  is  a central  point 
that  filters  calls;  it  takes 
ownership  of  the  customer. 

Unisys  is  keen  to  point  out  that 
CONNECT  addresses 
multivendor  issues  and  needs, 
and  end  users'  needs  that  are 
related  to  networking.  Further, 
CONNECT  can  provide  a 
general-purpose  and  repeatable 
packaged  solution,  or  tailored 
customer-specific  solutions. 
Included  in  the  service  offered 
are  those  features  shown  in 
Exhibit  B. 

CONNECT— Strategic 
Direction 

Unisys  claims  that  the  strategic 
directions  that  led  to  the  revised 
CONNECT  services,  and  the 
basis  on  which  the  services  were 
developed,  resulted  from 
research  of  user  needs  for 
networking  and  the  difficulties 
that  can  arise  from 
implementation. 


"Call  CONNECT  —Unisys'  Total 
Solution  to  User  Networking" 


Exhibit  A 

Network  Life  Cycle 

• Planning,  design  and  development 

• Installation 

• Commissioning,  certification  and  implementation 

• Provision  of  “a  la  carte”  service 

• Change  management 

• Operations  management  and  enhancement 


Source:  INPUT 


INPUT 


O 1001  hy  INPUT.  Roproducllon  problbltod. 


August  1991 


Service  Update 


3 


Exhibit  B 

CONNECT — ^The  Main  Features 

• Equipment 

• Software 

-Systems  software 

-Applications 

-Customer-specific  applications 

• Power  systems 

• Structured  wiring 

• Ergonomics 

Source:  INPUT 

Unisys'  research  indicates  that 
user  implementation  of 
networks  is  an  increasing  trend. 
For  example,  the  number  of 
networks  installed  worldwide 
has  doubled  in  the  last  two 
years,  and  this  trend  is  set  to 
continue.  The  research  also 
indicates  that  users  are 
experiencing  a growing  number 
of  problems  in  developing 
efficient  networks. 

Users  are  keen  to  acknowledge 
the  need  for  networks,  and  they 
are  keen  to  improve  and  extend 
them.  However,  the  complexity 
of  the  technology  involved  and 
the  difficulties  experienced  by 
users — in  what  is  a highly 
multi  vendor-oriented 
environment — are  inhibiting  the 
process. 


August  1991 


It  is  against  this  background  that 
the  strategies  for  CONNECT 
have  been  developed.  Exhibit  C 
highlights  the  key  elements  of 
Unisys'  CONNECT  strategies. 

In  developing  CONNECT, 
Unisys  reasoned  that  from  the 
user's  point  of  view: 

• There  is  a problem  with 
finding  and  integrating 
technologies  from  a wide 
range  of  different  vendors. 
Each  vendor  may  be  a 
specialist  in  its  own  field,  but 
who  will  take  responsibility 
for  ensuring  that  all  the 
various  technologies  will 
work  together?  Further,  if 
faults  or  problems  occur  in  a 
network,  which  vendor  is 
responsible  and  who  will 
resolve  the  problems? 


© 1991  by  INPUT,  Reproduclion  prohibited. 


• Many  users  face  problems  in 
enhancing  or  extending 
existing  networks,  and  many 
users  simply  add  to  their 
networks  with  an  unplanned 
and  uncontrolled  approach. 
The  invariable  upshot  of  this 
approach  is  that  the  resulting 
networks  are  inefficient  and 
inflexible.  Such  networks  can 
diminish  productivity  and 
can  place  the  user's  business 
at  risk. 

• When  network 
implementation  and  support 
remain  separate,  fragmented 
services,  users  may  find  they 
are  taking  responsibility  for 
coordination  themselves. 
Inevitably  the  user  will  end 
up  taking  responsibility  for  a 
highly  complex  system,  and 
may  not  have  the  expertise  to 
fully  understand  the  system 
for  which  they  are 
responsible. 

input's  research,  which  was 
published  in  a report  entitled 
The  Challenge  of  Network  Service 
in  Customer  Services  in  May  1990, 
concurs  with  Unisys'  findings. 
The  report  concluded  that  the 
service  and  support  of  networks 
remains  fragmented,  with  few 
vendors  offering  comprehensive 
approaches  to  network  services, 
thus  leaving  users  underserved 
in  a vital  area  of  their 
information  systems 
infrastructure.  The  report 
further  acknowledged  that  there 
was  considerable  user  confusion 
over  network  support  needs  and 
the  likely  development  of 
networks. 


Continued  on  next  page 

INPUT 


4 


UUI SyS  . . .from  pa^e  3 C 

Summary  of  CONNECT  CONNECT— Strategic  Direction 

Services 

The  CONNECT  service  offering 
has  six  distinct  but  interlinked 
services.  These  services  are 
identified  in  Exhibit  A.  These 
services  are  repositioned  in 
Exhibit  D to  emphasize  the  focus 
on  a total  network  solution. 

The  six  key  elements  of 
CONNECT  can  be  summarised 
under  the  following  headings: 

1.  Planning,  Design  and 
Development 

The  major  elements  of  this 
aspect  of  CONNECT  are  listed 
in  Exhibit  E. 

At  this  phase,  Unisys  project 
managers  and  consultants  work 
with  the  customer  to  explore  all 
the  options  for  linking  the  user's 
various  computer  systems 
together.  At  the  encl  of  this 
process,  Unisys  staff  will 
determine  the  best  solution  to 
match  the  user's  business 
needs — both  in  tenns  of 
supporting  current  business 
goals  and  ensuring  that  support 
for  future  business  requirements 
is  taken  into  account. 

During  this  phase  all  activities 
are  controlled  by  a Unisys 
project  manager  who  remains 
the  single  point  of  contact  until 
the  work  is  completed. 


• Integrated  total  solution  to  address  user 
networking  requirements 

- Networking  products  and  services 

- A la  carte  services 

- Multivendor  services 

- Integration  services 

- Project  management  services 

- Consultancy  services 

- Customer  education  and  training 

• Provide  focus  to  help  implement  the  Unisys 
architecture 

• Provide  networking  products  and  services  that 
address  any  stage  of  the  network  life  cycle 

• Provide  networking  products  and  services  that 
are  designed  to  meet  business  needs 


Source;  INPUT 


INPUT 


© 1991  by  INPUT.  Reproducllon  prohiblled. 


August  1991 


Service  Update 


5 


Exhibit  E 

CONNECT — Planning,  Design 
and  Development  Services 


• Analysing  business  requirements 

• Evaluating  the  structure  and  locations  of 
premises 

• Determining  the  optimum  topology  and  network 
products 

• Developing  applications  software  products, 
customised  protocols  and  systems  integration 

• Designing  in  flexibility  and  adherence  to 
standards 

• Preparing  the  complete  networking  blueprint 


Source:  INPUT 


2.  Installation 

Exhibit  F provides  a list  of  the 
elements  of  CONNECT  that 
comprise  the  installation  phase. 

Unisys  provides  complete 
project  management  on  site  at 
every  stage  of  installation. 

The  objective  of  the  installation 
phase  is  to  ensure  that  correct 
methods  are  used  for  installing 
structured  wiring — taking  into 
account  the  structure  of  the 
user's  buildings — and  often 
involves  multiple  sites  in  cases 
where  a wide-area  network  is 
being  installed.  Other  areas  of 
concern  at  this  stage  are  to 
ensure  that  installation  is 
correctly  monitored  for 


Continued  on  next  page 


August  1991 


© 1991  by  INPUT.  Reproduclion  prohibiled. 


INPUT 


Service  Update 


6 


Unisi/s..  .from  page  5 


Exhibit  F 

CONNECT — Installation  Services 


* An  integrated  approach  to  installing  all  the 
components  of  the  network 


All  potential  problem  areas  are 
covered,  ranging  from 
interfacing  with  PTTs  to  joining 
with  an  existing  network. 

Should  faults  occur  during  this 
phase  of  the  project,  immediate 
access  to  advanced  diagnostic 
equipment  helps  in  the  speedy 
resolution  of  problems. 


• Project  management 

• Development  of  co-ordinated  installation  plan 

• Provision  of  optimum  network  products 

• Integration  of  all  components 

• One-stop  shop  total  installation  turnkey  service 


Source;  INPUT 


The  implementation  service 
takes  a strategic  management 
approach  to  this  phase  of  the 
project.  Phase  one  addresses 
pre-implementation  tasks  such 
as  delivery  and  training 
schedules.  Phase  two 
incorporates  all  aspects  of  the 
delivery,  such  as  "cold"  or  "hot" 
staging.  Phase  three  is  a post- 
implementation review  that 
focuses  on  new  or  outstanding 
issues. 


environmental  protection  and 
cosmetic  acceptability. 

During  this  phase  of  the  project, 
the  Unisys  project  manager  is 
the  central  point  of  contact  and 
has  responsibility  for  all  aspects 
of  Unisys  commitments.  This 
responsibility  includes 
completing  the  work  within 
budget  and  on  time,  and 
controlling  execution  of  the  plan 
whether  it  is  done  by  Unisys 
staff  or  by  specialist  contractors. 

3.  Commissioning, 
Certification  and 
Implementation 

The  elements  of  CONNECT  that 
comprise  this  phase  of  the 
project  are  identified  in 
Exhibit  G. 

Objectives  for  the  network 
commissioning  and  certification 
p)iase  are  to  ensure  complete 
management  control  at  each 


Exhibit  G 

CONNECT — Commissioning,  Certification 
and  Implementation  Services 


• Integrated  with  installation  services  or  standalone 

• Evaluation  of  all  network  components 

• Ensuring  physical  and  logical  connectivity 

• Ensuring  network  hardware  and  software  operability 

• Realising  the  complete  networking  blueprint 

• Guarantying  immediate  beneficial  use 


Source:  INPUT 


Step  of  the  project  while 
installation  is  being  carried  out 
and  also  to  methodically  check, 
monitor  and  test  every 
connection  point  in  the  network. 


INPUT 


© 1^1  by  INPUT.  Reproduction  prohibited 


August  1991 


Service  Update 


7 


4.  A La  Carte  Network  Service 

A La  Carte  Network  Service  was 
developed  by  Unisys  to  allow 
users  a choice  in  the  type  of 
support  they  require  for  their 
networks.  It  offers  a complete 
menu  of  network  services;  the 
user  has  simply  to  chose  which 
is  appropriate  to  suit  business 
needs.  The  objective  is  to 
provide  the  user  with 
comprehensive  service  and 
support.  The  main  features  of  A 
La  Carte  Network  Service  are 
highlighted  in  Exhibit  H. 

Through  this  service,  the  user 
gets  a single  contract  to  cover  all 
network  service  and  support. 
This  total  solution  provides  the 
user  with  everything  from 
diagnostics  and  fault 
management  to  software 
maintenance.  The  key  is  the 
provision  of  immediate 
attention  when  needed. 


5.  Change  Management 
Services 

Exhibit  I highlights  the  major 
elements  that  comprise  the 


CONNECT  Change 
Management  Services. 

The  objective  of  this  service  is  to 
allow  the  user  to  implement 


changes  to  the  network  as  the 
needs  of  the  user's  business 
change — for  example,  as  a result 
of  re-organisation,  mergers  and 
acquisitions,  changes  in  business 
practice,  or  changes  that  involve 
office  re-arrangement. 

This  service  also  allows  users  to 
take  advantage  of  new 
technology  as  it  becomes 
available,  which  ensures  that 
their  business  operations  remain 
fully  efficient. 

However,  the  key  focus  of 
Unisys'  Change  Management 
Services  is  "controlled  change". 
This  approach  opposes  the 


Exhibit  I 

CONNECT — Change  Management  Services 

• Physical  and  logical  management  of  changes  in 
equipment  and  network  configuration 

• Project  management 

• Auditing  and  reviewing  of  network  cabling  methods 

• Developing  and  introducing  open  cabling  systems 

• Recommending  methods  and  systems  to  minimise 
the  adverse  effects  of  change 

• Managing  change  to  ensure  networks  always  match 
business  needs 

Source:  INPUT 


Exhibit  H 

CONNECT — A La  Carte  Network  Service 

• The  user  chooses  the  support  that  best  suits  its 
business 

• Provides  expert  support  focussed  on  the  whole 
network 

• Includes  multivendor  support  capabilities 

• Delivers  highly  flexible,  multilevel  services 

• One  single  contract  for  the  whole  network 


Source;  INPUT 


Continued  on  next  page 


August  1991 


© 1991  by  INPUT.  Reproduclioo  prohibited. 


INPUT 


Service  Update 


8 


Unisys..  .from 


page? 


uncontrolled  proliferation  of 
cabling  and  equipment,  which  is 
often  the  result  of  hastily 
implemented  additions, 
extensions  and  enhancements  to 
networks.  Controlled  change  is 
the  key  to  maintaining  efficiency 
and  productivity  levels  within 
the  user's  business  operations. 


This  service  aims  to  ensure  that 
the  user  has  the  opportunity  to 
progressively  enhance  the 
network  to  achieve  the  best 
business  efficiency  possible. 

Unisys  reasons  that  ignoring  a 
network  until  a change  in 
working  practices  forces  a 
change  in  the  network  is  an 
inefficient  approach  that  may 
cause  the  user  to  miss  valuable 


opportunities  for  improved 
performance,  efficiency  and 
improved  cost  effectiveness  of 
the  network. 

The  service  includes  network 
audits  aimed  at  allowing  the 
user  better  control  of  identifying 
redundant  parts  of  the  network 
and  checking  uncontrolled 
proliferation  or  duplicated 
resources.  Also  included  are  the 


6.  Operational  Management 
and  Enhancement 


The  major  elements  of 
CONNECT  Operational 
Management  and  Enhancement 
services  are  listed  in  Exhibit  J. 


"CONNECT— 

A 'Drive  Away'  Network  Solution" 


Exhibit  J 

CONNECT — Operational  Management 
and  Enhancement  Services 

• Auditing  and  reviewing  the  efficiency  of  networks 

• Developing  solutions  to  improve  cost/performance 
ratios 

• Introducing  the  benefits  of  advancing  technology 

• Delivering  packaged  services  for  network 
implementation 

• Monitoring  and  maintaining  compatibility  of 
software  revision  levels 

• Reviewing  the  security  of  networks 

Source:  INPUT 


monitoring  and  maintenance  of 
the  compatibility  of  software 
revisions  and  reviews  related  to 
the  security  of  networks. 

In  conclusion,  the  relaunched 
CONNECT  service  could  be 
described  as  a "drive  away" 
solution  to  user's  networking 
needs.  ■ 


INPUT 


© 1991  by  INPUT.  Reproduction  prohibited. 


August  1991 


Service  Update 


EuroPACE — An  Innovative 
Training  Operation  in  Europe 


EuroPACE  is  a unique 
organisation,  and  is 
believed  to  be  the  only 
organisation  in  its  market  niche 
in  Europe  that  uses  satellite 
communications  as  a delivery 
mode  for  education  and 
training. 

EuroPACE  recognises  that  its 
aims  are  ambitious,  but  also 
believes  that  they  are  realistic. 
The  following  statement 
reflects  EuroPACE  goals: 

“To  help  European 
industry  in  its  urgent  need 
to  stay  competitive  by 
providing  the  most  up-to- 
date  knowledge  relevant 
for  research,  development, 
manufacturing  and 
management  using 
advanced  infomiation  and 
communication 
technologies." 

The  success  of  EuroPACE 
is  such  that  the 
organisation  is  currently 
delivering  about  350  hours 
of  new  training  material 
per  year  via  the  satellite 
link.  In  judging  this 
success,  it  is  necessary  to 
take  into  account  that 
EuroPACE  is  primarily  a 
wholesaler,  not  a retailer; 
subscribers  receiving  the 
material  record  it  and  then 
disseminate  it  within  their 
own  organisations. 

Therefore,  the  actual 
quantity  of  training 
delivered  to  participants  is 


August  1991 


many  times  larger  than  the 
initial  quantity  transmitted  by 
the  EuroPACE  organisation.  The 
common  language  is  English. 

EuroPACE  is  a venture  set  up  in 
1988  by  a number  of  leading 
international  companies  that  are 
sponsors  of  the  organisation. 
These  sponsors  are  listed  in 
Exhibit  K. 


© 1991  by  INPUT.  Reproduction  prohibited. 


9 

These  sponsors  are  continuing 
to  support  the  development  of 
EuroPACE,  and  currently  about 
70  organisations  across  Europe 
regularly  receive  and  record 
broadcasts.  However,  as 
EuroPACE  points  out,  many  of 
the  receiving  organisations  are 
consortia;  therefore,  the  total 
number  of  receiving 
organisations  is  much  higher. 

EuroPACE  headquarters  is 
located  in  Paris,  and  the 
organisation  is  registered  as  a 
French  “Association"  that 
members  have  to  join.  The 
organisation  is  not 
intended  as  a profit- 
making entity.  The 
Chairman  of  EuroPACE 
is  M.  Hubert  Curien,  the 
French  Minister  of 
Research  and  Technology 
and  Professor,  University 
Paris  VI. 

There  are  four  categories 
of  membership  of 
EuroPACE: 

• The  first  two  categories 
cover  small  business 
and  academic 
organisations,  for 
which  the  current 
membership  fee  starts 
at  11,000  ECUs  per  year 
(about  $15,000). 

• Active  members,  for 
which  the  current 
membership  fee  starts 
at  38,500  ECUs  per  year 
(about  $53,000).  Active 
membership  is  for 
companies  or  consortia 
that  wish  to  be 
involved  in  the  future 
planning  of  EuroPACE, 


Continued  on  next  page 

INPUT 


Exhibit  K 

EuroPACE  Sponsors 

— 

• British  Telecom 

• Bull 

• DEUS 

• Digital 

• Fundesco  - Telefonica 

• Fundetec 

• Hewlett-Packard 

• IBM 

• IRI 

• NORIT 

• Philips 

• Thomson 

• CRE 

• SEFI 

Source:  INPUT 


Service  Update 


10 

Euro  PACE.  . .from  page  9 

and  includes  rights  to  attend 
all  programme  advisory 
groups. 

• Full  sponsors  pay  for 
membership  in  EuroFACE 
for  a five-year  period,  which 
for  the  initial  group  ends  at 
the  end  of  1992.  All  sponsors 
of  the  EuroFACE 
organisation  are  board 
members,  and  new  sponsors 
are  permitted  to  join.  They 
initially  paid  180,000  ECUs 
per  year  (about  $245,000)  to 
set  up  the  EuroFACE 
organisation.  However,  the 
annual  sponsorship  fee  has 
now  been  reduced  to  120,000 
ECUs  (about  $165,000). 

EuroFACE  defines  its  target 
market  as  the  continuing 
education  sector,  which  is 
divided  into  the  following 
subsectors: 

• Early  employment 

• Settling  down 

• Mid-life 

• Late  employment 

EuroFACE  has  targeted  the 
early  employment  group  on  the 
basis  that  this  group  is  the  most 
highly  motivated,  and  in  terms 
of  high  technology  topics,  is  the 
group  most  in  ne^  of 
continuous  updating.  For  this 
group,  it  is  assumed  that 
companies  will  pay  for  the 
access  to  EuroFACE  material. 

EuroFACE  further  reasons  that 
for  each  subsector  there  are  four 
motivational  forces  on  which  the 
learning  process  is  dependent: 

• Access 

• Frocess 


• Frice 

• Culture 

EuroFACE  sees  the  medium  of 
satellite-based  communications 
as  a delivery  mode  for  video 
training  that  attacks  two  of  the 
four  motivational  forces — access 
and  price.  EuroFACE  aims  to 
lower  the  price  of  training. 
Although  the  company  initially 
targeteci  the  early  employment 
group,  on  the  basis  that  it  was 
the  group  most  motivated  to 
learn,  it  is  now  seeking  ways  of 
accessing  other  sectors,  in 
particular  management. 

EuroFACE  research  has 
indicated  that  the  lowest  level  of 
motivation  exists  within  the 
mid-life  group.  If  this  sector  of 
the  market  is  to  be  successfully 
accessed,  the  company  culture 
needs  to  be  right  in  order  to 
create  the  right  level  of 
encouragement,  both  within  the 
company  organisation  and 
within  the  individual. 

The  position  that  EuroFACE  has 
taken  on  pricing  is  that  it  should 
be  based  on  production  cost. 
Froduction  costs  are  relatively 
low,  about  5,000  ECUs  per  hour 
(about  $6,900);  therefore,  the 
potential  cost  to  users  is  also 
relatively  low,  providing  that 
sufficient  users  subscribe.  A 
further  point  made  by 
EuroFACE  is  that  the  use  of 
satellite  communications  as  a 
delivery  mode  is  very  efficient. 
Using  satellites,  the  staff  head 
count  is  about  15.  About  60  staff 
would  be  needed  to  package 
material  for  daily  delivery  using 
more  conventional  means,  such 
as  mail  or  courier  delivery,  and 
this  number  would  increase  as 
more  receive  sites  were 
installed. 


EuroFACE  considers  its 
business  as  "self  service" 
learning,  more  selling  a licence 
than  selling  a product. 
Subscribing  members  and 
sponsors  who  receive  the 
material  have  the  right  to  record 
and  edit  the  material  received 
for  distribution  in  their  own 
organisations.  No  limits  are 
placed  on  this  distribution 
provided  it  is  within  the  defined 
organisation  of  member 
companies.  Rights  for  resale  of 
material  can  be  negotiated  with 
EuroFACE  if  desired. 

Broadcasts  are  currently  made 
via  a Eutelsat  1 satellite  which, 
although  relatively  low 
powered,  provides  good 
coverage  throughout  Europe. 
Most  receiving  sites  can  be 
served  by  a 1.8  meter  motorised 
dish  that  costs  between  $1,900 
and  $3,800. 

EuroFACE  offered  the  following 
comments  about  the  issues 
surrounding  its  service: 

• The  use  of  satellites  aids  the 
efficiency  of  delivery,  and 
EuroFACE  is  a vehicle 
delivering  expertise,  whose 
price  does  not  depend  on  the 
number  of  students. 

• Froduction  methodology  is  a 
key  issue.  Feople 
misunderstand  technology 
and  its  driving  forces. 
Training  is  important — 
technology  is  less  so. 

• The  "warm  body"  approach 
to  training  is  less  interactive 
than  many  people  believe. 
Interactivity  as  a critical 
component  of  training  can  be 
a misnomer. 


INPUT 


© 1991  by  INPUT.  Reproduction  probibiled. 


August  1991 


Service  Update 


11 


Exhibit  L 

EuroPACE  Key  Topic  Areas 

• Advanced  manufacturing  techniques 

• Expert  systems  and  artificial  intelligence 

• Micro  electronics 

• Software  engineering 

• Telecommunications 

• Technology  management 

• Information  systems  management 

Source:  INPUT 


• Training  and  its  benefits 
needs  to  be  marketed  and 
sold.  Additionally,  major 
cultural  changes  are  required 
to  break  down  the  barriers  to 
extend  training  across  a wide 
spectnim. 

• From  the  point  of  view  of 
EuroPACE,  there  is  a need  to 
find  both  well  known  and 
unknown  experts  to  support 
its  programme. 

• Mass  market  training  at  low 
cost  is  an  opportunity  for 
EuroPACE. 

• With  regard  to  culture,  it  is 
very  important  that  people 
are  encouraged  to  leam,  or 
that  incentives  are  provided. 
Many  companies  do  not  yet 
have  the  right  culture. 

Currently  the  scope  of  material 
offered  by  EuroPACE  extends 
beyond  INPUT'S  definition  of 
information  services  training. 
Those  courses  offered  that  do 
fall  within  the  scope  of  this 
definition  relate  to  the  key  topics 
listed  in  Exhibit  L: 

Examples  of  courses  provided 
that  relate  to  information 
services,  to  be  broadcast  in  the 
year  beginning  September  1991, 
are: 

• Case-based  Reasoning  (6  hrs.) 

• Software  Quality,  Metrics  and 
Testing  (7  hrs.) 

• Safety-Critical  Control 
Systems  (12  hrs.) 

• Next-Generation  Data  Base 
Systems  (10  hrs.) 


• Video  Communications; 
Coding  Compression  and 
Transmission  (21  hrs.) 

• OSI  Conformance  Testing 
(10  hrs.) 

• Innovation  Management 
(10  hrs.) 

There  are  a number  of  factors 
that  differentiate  the  activities  of 
EuroPACE  from  those  of  other 
companies  that  are  delivering 
videotape-related  training 
products;  these  factors  include 
the  following: 

• Material  is  broadcast  once 
only. 

• Subject  material  tends  to  be 
related  to  leading-edge 
technologies. 

• EuroPACE  conducts  about  12 
live  broadcasts  each  year  on 
"hot"  topics,  such  as  expert 
systems,  EDI  and  quality. 


• EuroPACE  encourages  a 
diverse  use  of  the  material 
broadcast — i.e.,  copying, 
editing,  etc. — to  match  client 
educational  culture. 

• EuroPACE  commissions 
education  and  reportage  and 
then  broadcasts  the  material, 
for  example  the  recent  Super- 
Computer  Conference. 

The  company  uses  satellites  for 
delivery  of  television 
programmes;  surface  mail  for 
delivery  of  printed  documents; 
and  computer  conferencing, 
telephones  and  faxes  for 
communication  and  feedback. 

For  further  information  on 
EuroPACE,  please  send  a fax  to 
the  following: 

Mr.  Neil  Spoonley 

EuroPACE 

CNIT 

La  Defense 

92054  Paris,  France 

Fax  (33)  1 47  76  42  72  ■ 


August  1991 


© 1991  by  INPUT.  Reproduction  prohiblled 


INPUT 


Service  Update 


12 


ICL  and  Beil  Atlantic  Form 
Joint  Venture 


The  current  round  of 
expansionism  at  ICL 
continues.  Following  shortly 
after  the  announcement  that  ICL 
was  to  acquire  Nokia  Data  came 
a new  announcement  that  ICL 
and  Bell  Atlantic  Business 
Systems  Inc.  of  the  U.S.  are  to 
form  a joint  venture. 

The  stated  purpose  of  the  joint 
venture  is  to  provide  total 
managed  services  in  Western 
Europe.  Total  managed  services 
is  claimed  to  represent  a wide 
range  of  customer  services, 
required  by  large  corporations, 
that  go  beyond  just  the 
hardware  maintenance  services 
traditionally  supplied  by 
independent  maintenance 
companies. 

The  new  joint  venture  company 
will  have  its  headquarters  based 
in  London,  U.K 

Bell  Atlantic  and  ICL  will  each 
have  a half  interest  in  the  joint 
venture  company — Bell  Atlantic 
Customer  Services  International, 
and  in  its  operating  companies. 
The  operating  companies  are: 

Sorbus  U.K.  Ltd. 

Bell  Atlantic  Services  clients 
Sorbus  Germany 
Eurotech  Italia 


These  companies  currently 
provide  computer  maintenance 
services  in  the  United  Kingdom, 
France,  Germany,  Switzerland, 
Austria  and  Italy. 


The  new  company  will  offer  a 
wide  range  of  services  for 


INPUT 


mainframe,  midrange  and 
networked  personal  computer 
systems  from  a range  of 
suppliers,  including  IBM  and 
Digital.  Servicing  of  ICL 
computer  systems  will  remain 
the  responsibility  of  ICL. 

Mr.  Tom  Vassiliades,  President 
and  CEO  of  Bell  Atlantic 
Business  Systems  Inc.,  will  serve 
as  Chairman  of  the  joint  venture. 
In  explaining  the  choice  of  ICL 
as  a partner,  Mr.  Vassiliades 
said: 

"ICL  is  unquestionably  a 
successful  computer  systems 
supplier  with  a well-established 
base,  a well-developed 
infrastructure  and  a fine 
reputation.  This  partnership  is 
an  ideal  opportunity  not  only  to 
support  our  business  growth 
plans  but,  more  importantly,  to 
provide  our  customers  with  a 
varied  and  rich  portfolio  of 
services  to  meet  all  their 
business  needs". 

On  behalf  of  ICL,  Mr.  John 
Proctor,  ICL's  Director  of 
Services  commented: 

"This  new  venture  represents 
another  step  in  ICL's  strategy 
for  expansion  in  Europe  and 
emphasises  the  increasing 
importance  of  high-quality 
maintenance  and  support 
services  in  the  information 
technology  market. 

The  combination  of  ICL's 
widespread  and  growing 
European  infrastructure  and 
service  skills,  and  Bell  Atlantic's 


O 1991  by  INPUT.  Reprodudlon  prohibiled. 


Strong  capabilities  and  state-of- 
the-art  service  technologies  for 
non-ICL  equipment,  results  in  a 
partnership  ideally  positioned  to 
bring  the  highest  standard  of 
service  to  organisations 
throughout  Western  Europe".  ■ 


NCR-AT&T 

Merger 

NCR  and  AT&T  have 
moved  closer  to  their 
merger  with  the  joint  filing  with 
the  Securities  and  Exchange 
Commission  for  the  issuance  of 
AT&T  common  stock  in 
connection  with  the  merger  and 
public  offering  of  6.3  million 
shares  of  NCR  common  stock. 
NCR's  proxy  statement  relating 
to  shareholder  approval  was 
also  filed  with  the  SEC. 

The  NCR  shares  sold  under  the 
stock  offering  will  be 
automatically  converted  to 
AT&T  common  shares  as  a 
consequence  of  the  merger.  The 
exchange  ratio  will  be  based  on 
the  average  closing  price  of 
A r&T  stock  during  the  20 
consecutive  trading  days  ending 
on  the  fifth  day  prior  to  the 
special  meeting  of  NCR 
shareholders. 

Morgan  Stanley  & Co.;  Dillon, 
Read  & Co.,  Inc.;  and  Goldman 
Sachs  & Co.  have  been  named 
co-managers  of  the  U.S.  and 
Canadian  portions  of  the 
offering.  The  international 
portion  of  the  offering  will  be 
managed  by  Morgan  Stanley 
International;  Dillon,  Read 
Securities  Limited;  and 
Goldman  Sachs  Limited.  ■ 


August  1991 


13 


News  from  the  U.S. 

Novadyne  Computer 
Systems,  Inc. 


Novadyne  Computer 

Systems,  Inc.  was  fonned 
from  a management  buyout  of 
the  McDonnell  Douglas  Field 
Service  Company  in  June,  1990. 
Novadyne  provides  third-  and 
fourth-party  hardware 
maintenance  services,  software 
support  and  network  services  to 
information  systems  end  users, 
OEMs  and  resellers.  The 
company  also  markets  and 
services  a full  line  of 
information  processing  systems 
in  the  PICK®  and  UNIX® 
marketplaces  through  a national 
network  of  distributors  and 
value-added  resellers. 

During  its  first  year  of 
operation,  Novadyne  has  retired 
1 1 % of  its  buyout  debt,  acquired 
the  service  operations  of 
Distributed  Logic  Corporation 
of  Anaheim,  CA,  and  begun 
construction  on  a new 
headquarters  in  Santa  Ana,  CA. 
Total  revenues  are  expected  to 
be  over  $104  million  this  year. 

The  Power  of  Many 
Combined  as  One 

Novadyne  comprises  the  joint 
capabilities  of  the  fonner 
Microdata,  McAuto  and 
Tymshare  field  service 
organisations,  as  well  as  the 
firms  that  Novadyne  has 
acquired  since  the  merger  of 
these  organisations.  Their 
charter  is  to  provide  flexibility  in 
designing  quality  service 


August  1991 


programs  to  meet  customers' 
service  requirements,  and  in 
essence,  become  a business 
partner  with  customers. 

Client  Base 

Services  are  marketed 
nationwide  to  companies  across 
all  industries,  including  retail, 
transportation,  distribution, 
communications,  health  care, 
educational  organisations, 
federal  government,  and  state 
and  local  government  agencies. 
Major  clients  include  American 
Express,  McDonnell  Douglas 
Systems  Integration  and 
emergency  911  applications 
across  the  country. 

Products  and  Services 

Service  offerings  include  a wide 
variety  of  compukr  systems, 
graphic  workstations,  and 
communications  hardware  from 
over  100  manufacturers.  Major 
manufacturers  covered  include 
DEC,  Tandem,  IBM,  Sun 
Microsystems,  Eujitsu,  Cipher, 
Printronix,  Emulex,  and  Control 
Data. 

Levels  of  service  options  are: 

• Basic  coverage  provides 
normal,  on-site  response 
during  the  principal  period  of 
maintenance  (PPM)  on  a best- 
effort  basis. 

• Basic  Plus  Coverage  provides 
a guaranteed  four- hour,  on- 

©  1991  by  INPUT,  Reproduclion  prohibited. 


site  response  and  a two-hour 
grace  period  after  the  PPM,  at 
no  additional  cost  to  the 
customer. 

• Critical  Coverage  provides  a 
guaranteed  four-hour,  on-site 
response  and  continuous 
work-through  until  the 
problem  is  solved,  at  no 
additional  expense  to  the 
customer. 

Novadyne's  Central  Dispatch 
system  enables  them  to  respond 
to  a customer's  initial  service 
call  24  hours  a day.  The  two 
major  features  of  the  Central 
Dispatch  system  are  the 
automatic  call  handling  and  call 
escalation  programs,  which  are 
designed  to  effectively  track  all 
calls  through  closeout. 

• The  Central  Dispatch  system 
routinely  schedules 
preventive  maintenance, 
opening  a service  call  and 
paging  an  engineer  to  the  site 
when  preventive 
maintenance  is  due. 

• Predictive  maintenance  is 
also  scheduled  and,  if 
authorised  by  the  customer, 
Novadyne's  system  will  dial 
into  the  system,  run 
diagnostic  routines  and  make 
appropriate 
recommendations. 

Novadyne's  logistic  centres 
operate  24  hours  a day  to  ensure 
that  critical  service  needs  are 
met. 

Novadyne  also  offers  a Tandem 
disaster  recovery  program  on 
numerous  equipment 
configurations,  with  tape 
storage  facilities  on  its  premises 

Continued  on  next  page 

INPUT 


Service  Update 


14 

Novadi/iie..  .from  page  13 

for  the  customer's  SYSGEN. 
Using  the  Central  Dispatch 
capabilities,  Novadyne 
guarantees  four-hour 
configuration  response.  As  part 
of  the  program,  customers 
receive  32  hours  of  Disaster 
Recovery  Emulation  on-site  at 
the  Novadyne  Dallas  Recovery 
site,  and  a data  entry  centre  and 
remote  terminal  system  support 
through  the  Recovery  site. 


Under  the  realm  of  fourth-party 
maintenance  services, 
Novadyne  offers  24-hour  spares 
availability,  depot  repair,  and 
full-service  catalog  sales. 

• The  Remarketing  Services 
Group  specialises  in  the  sale 
and  lease  of  hard-to-find 
spare  parts. 

• NOVADIRECT  offers  aill- 
service  catalog  sales  for 


peripherals,  supplies,  and 
accessories. 

Depot  repair  services  are 
offered  through  three  centers 
located  in  Dallas, 
Philadelphia,  and  Irvine, 
California.  The  centers  offer 
more  than  60  state-of-the-art 
fault  isolation  systems  and  a 
Class  100 A cleanroom  with 
servo  writers  for  sealed 
module  disk  assembly.  ■ 


News  from  the  U.S. 

Enquiry  Service 


Ques:  What  maintenance 
support  is  available  for 
ARCHIVE  tape  drive  2525ES 
and  Syquest's  removable 
cartridge  SQ51 10?  Are  on-site  or 
depot  services  available? 


A ns:  Sysquest  just  started 
shipping  theSQSllO  in 
February,  1991.  Therefore,  the 
units  that  are  out  in  the  market 
now  are  still  under 
manufacturer's  warranty. 
Sysquest  expects  that  they  will 
have  a flat  rate  maintenance 
plan  ready  before  the  first  units 


come  off  from  warranty.  All 
maintenance/replacement  will 
be  handled  through  the 
distributors. 

All  of  the  maintenance  for  the 
ARCHIVE  tape  drives  is 
handled  through  Maynard 
Electronics,  a division  of 
ARCHIVE.  The  units  may  be 
repaired  on  a flat  rate  basis, 
exchanged  for  another  "like" 
unit,  or  exchanged  for  a 
different  model  at  varying  fees. 


Snippets 


♦J*  Alliances  Enhance  Single-Point-of-Contact 
Service 

- Bell  Atlantic  Business  Systems  Service  in  the 
USA  has  announced  the  signing  of  two  new 
alliances  to  enhance  its  ability  to  provide 
single-point-of-contract  service  to  customers. 
The  agreements  with  NCR  of  Dayton,  OH, 
and  Amdahl  of  Sunnyvale,  CA,  will  offer 
BABSS  the  opportunities  to  expand  into  new 
niarket  places. 


- UNIX  hotline  telephone  support  in  the  USA 
has  moved  into  the  900  number  pay-per-call 
market.  Service  bureau  Interactive  Commu- 
nications offers  a hotline  staffed  by  reseller. 
Todays  Computers  Business  Centers,  an- 
swering calls  on  UNIX  and  DOS  technical 
issues.  The  service  maintains  a profile  of  the 
user's  configuration  so  that  frequent  callers 
can  jump  to  the  point  of  the  call,  eliminating 
the  preliminary  questions. 


INPUT 


© 1991  by  INPUT.  Reprodudion  prohibited. 


August  1991 


15 


Snippets 


*t*  Tliorn  EMI  Software,  one  of  the  U.K.'s  largest 
computer  services  companies,  has  been 
bought  out  by  its  own  staff  and  management 
in  an  £82  million  (about  $160  million)  buyout. 
The  buyout  was  led  by  the  existing  chairman 
and  CEO,  Mr.  Mike  Smith. 

- The  company  was  renamed  Data  Sciences 
on  August  1st.  Thorn  EMI  will  retain  a 20% 
shareholding  in  the  new  company. 

- In  1990,  as  Thom  EMI  Software,  the  com- 
pany had  a turnover  of  £1 17  million  (about 
$225  million)  and  generated  pre-tax  profits 
of  £6.2  million  (about  $12  million) 

- Data  Sciences  employs  1,950  staff  across  14 
sites,  including  operations  in  Gennany  and 
the  Netherlands. 

*V  Granada  Computer  Services  has  been  in  the 
news  recently  in  the  U.K.  and  has  made  the 
following  announcements: 

- On  20th  June,  Granada  announced  that  it 
had  been  awarded  a maintenance  contract 
by  V.A.G.  (U.K.)  Ltd.  (Volkswagen/ Audi). 
The  contract  covers  a period  of  three  years, 
is  claimed  to  be  worth  £350,000  (about 
$680,000)  and  includes  maintenance  of  an 
IBM  3090  mainframe,  IBM  S36,  PCs  and 
Xerox  laser  printers. 

- On  1st  July,  Granada  announced  that  the 
Avon  (bounty  Council  and  Bristol  City 
Council  had  awarded  it  with  a single- 
source maintenance  contract  valued  at 
£100,000  (about  $195,000).  The  contract 
covers  maintenance  of  an  IBM  mainframe 
and  multivendor  peripherals  at  both  central 
and  distributed  computer  sites.  One  advan- 


tage of  awarding  the  contract  to  Granada 
was  claimed  to  be  the  elimination  of  demar- 
cation disputes  in  a multivendor 
environment. 

- On  4th  July,  Granada  announced  the  ap- 
pointment of  Mr.  Jeff  Stanton  as  the  new 
Managing  Director  of  the  U.K.  operations. 
Mr.  Stanton  will  report  to  Mr.  Peter 
Edwards,  MD  of  Granada  Computer  Ser- 
vices Europe.  Previous  to  this  appointment, 
Mr.  Stanton  had  been  deputy  MD  of 
Granada  Computing  Services  Europe. 

- On  19th  July,  Granada  announced  the 
appointment  of  Mr.  Joe  Connollv  as  Re- 
gional Sales  Manager  for  the  Midlands 
region  in  the  U.K. 

- At  Procurement  '91  in  the  U.K.  (nth-13th 
September)  Granada  will  be  explaining  the 
benefits  of  independent  computer  mainte- 
nance to  computer  users  in  the  U.K.  public 
sector. 

- On  1st  August,  Granada  announced  that  it 
had  been  selected  by  Northern  Electric  in  the 
U.K.  to  maintain  vital  computer  equipment 
used  for  internal  operations.  The  contract  is 
claimed  to  be  worth  over  £125,000  (about 
$240,000)  per  annum,  covers  four  regional 
offices  and  19  depots,  and  guarantees  a four- 
hour  fix  time  on  PC  fileservers. 

*1*  Digital  Equipment  Hong  Kong  has  been 
awarded  a contract  to  maintain  Cathay  Pacific 
Airways'  reservation  terminals  and  associated 
equipment.  The  two-year,  worldwide  contract 
is  worth  over  $3  million  and  covers  about 
4,700  pieces  of  equipment  installed  in  56 
countries — equipment  mostly  supplied  by 
L.M.  Ericsson. 


August  1991 


O 1991  by  INPUT,  noproduciloo  prohibitod 


INPUT 


About  INPUT 


INPUT  provides  planning  infonnation,  analysis,  and  recommendations  for  the 
information  technology  industries.  Through  market  research,  technology 
forecasting,  and  competitive  analysis,  INPUT  supports  client  management  in 
making  inforn\ed  decisions. 

Subscription  services,  proprietary  research /consulting,  merger/acquisition 
assistance,  and  multiclient  studies  are  provided  to  users  and  vendors  of  information 
systems  and  services.  INPUT  specialises  in  the  software  and  services  industry 
which  includes  software  products,  systems  operations,  processing  services,  network 
services,  systems  integration,  professional  services,  turnkey  systems,  and  customer 
services.  Particular  areas  of  expertise  include  CASE  analysis,  infonnation  systems 
planning,  and  outsourcing. 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior  management 
positions  in  operations,  marketing,  or  planning.  This  expertise  enables  INPUT  to 
supply  practical  solutions  to  complex  business  problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a leading 
international  research  and  consulting  firm.  Clients  include  more  than  100  of  the 
world's  largest  and  most  technically  advanced  companies. 


INPUT  OFFICES 


North  America 

San  Francisco 

1280  Villa  Street 

Mouritain  V^iew,  CA  94041-1194 

Tel.  (415)  961-3300  Fax  (415)  961-3966 

New  York 

Atrium  at  Glenpointe 
400  Frank  W.  BurrBlvd. 

Teaneck,  NJ  07666 

Tel.  (201)  801-0050  Fax  (201)  801-0441 

Washington,  D.C. 

INPUT,  INC 

1953  Gallows  Road,  Suite  560 
Vienna,  VA  22182 

Tel.  (703)  847-6870  Fax  (703)  847-6872 


International 

London 
INPUT  LTD. 

Piccadilly  I louse 

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Tel.  (071)  493-9335  Fax  (071)  629-0179 

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INPUT 

Service 

Update 


© INPUT 


A Publication  from  INPUT’S  Customer  Service  Programme — International 

September  1991 


IN 

THIS 

ISSUE: 


1 IBM  Links  Achievement  of  Corporate  Goals  to  Customer  Satisfaction 

Part  1 of  a Major  Review  of  IBM  UK  Customer  Services 

News  from  the  USA 


11  ...NCR/AT&T  Update 
1 1 ...Profile  of  Intelogic  Trace 


1 \ 


'1 


13  ...Snippets 


IBM  Links  Achievement  of  Corporate  Goals 
to  Customer  Satisfaction 

Part  1 of  a Major  Review  of  IBM  UK  Customer  Service 


Some  time  ago  the  chairman 
of  IBM,  Mr.  John  Akers, 
stated  publicly  that  it  was  IBM's 
corporate  goal  to  become  a 
services  company  and  that  by 
the  mid  1990s  IBM  would 
achieve  50%  of  revenues  from 
services. 

This  profile  highlights: 

1.  How  IBM  UK  has  set  about 
implementing  a strategy  with 
a plan  to  achieve  service 
excellence  through 
I commitment  to  customer 
satisfaction  as  a key  element 


2.  That  customer  satisfaction 
rates  the  highest  priority  in 
IBM  and  is  seen  as  a route  to 
successful  financial 
performance 

3.  How  IBM  UK  has  related 
customer  services  incentives 
to  measurable  achievement  of 
customer  satisfaction  goals 

The  profile  relates  specifically  to 
IBM  UK;  all  IBM  country 
subsidiary  organisations  retain  a 
high  degree  of  autonomy. 
However,  other  country 
organisations  can  follow  a 


similar  basic  concept/ approach 
to  that  developed  by  IBM  UK. 

In  pursuance  of  the  IBM 
corporate  goal,  IBM  UK 
Customer  Service  has 
implemented  a plan  that  focuses 
very  clearly  on  achievement  of 
results  through  measurable 
performance.  Exhibit  A 
illustrates  how  IBM  UK  has 
matched  its  implementation 
plan  to  the  corporate  culture  on 
which  achievement  of  the  key 
goal  to  become  a services 
organisation  is  based. 

Continued  on  next  page 


Service  Update 


2 


IBM.  . .from  page  1 


"Customer  Satisfaction  Is  Key  to 
Financial  Performance" 


In  order  to  understand  more 
fully  the  "raison  d'etre"  of  IBM 
UK  Customer  Service  in 
interpreting  the  requirements  of 
IBM's  corporate  goal  it  is 
necessary  to  take  each  of  the 
three  elements  illustrated  in 
Exhibit  A and  explain  them  in 
detail.  These  three  elements  are: 


The  Goal  Defined 

Some  time  ago,  in  1987  to  be 
precise,  IBM  UK  Customer 
Engineering  commenced 
implementation  of  a key 
strategy  aimed  towards  the 
development  of  a revenue 
stream  that  would  be  comprised 


While  progressing  along  this 
chosen  path  the  name  Customer 
Engineering  has  disappeared  to 
become  Customer  Service. 

While  IBM  will  not  release 
precise  data  to  indicate  exactly 
the  degree  of  achievement  in 
meeting  the  revenue  target,  it 
claims  to  be  well  on  course  at 
this  point  in  time.  INPUT'S 
estimate  is  that  currently  (1991) 
the  revenue  split  is  about  80% 
service  - 20%  services,  at  worst. 
INPUT  also  estimates  that  other 
country  subsidiaries  are 
proceeding  more  slowly  along 
this  path. 


Exhibit  A 


IBM  Key  Strategy 


Geographic 
organisation  of 
1 1 self-governing 
service  branches 

Branch  level 
performance 
measurement  and 
rewards  based  on 
results 

Visible 

commitment  to 
quality 


Source:  INPUT 


• The  Goal 

• The  Culture 

• The  Implementation 


of  50%  revenue  contribution 
from  service  and  50%  revenue 
contribution  from  services.  The 
target  date  was  set  for  1995. 


The  service/ services  distinction 
made  by  IBM  requires  further 
explanation  and  that 
explanation  is  provided  in  detail 
in  part  2 of  the  profile  which 


INPUT 


e 1991  by  INPUT.  Reproduction  prohibited. 


September  1991 


Service  Update 


discusses  the  range  of  services 
available  from  IBM  UK. 
However,  the  distinction  is 
much  more  complex  than  just  a 
range  of  service  offerings  and  a 
change  of  name.  Further 
clarification  can  be  provided  as 
follows: 

• The  worldwide  IBM 

Corporation  Annual  Rejx)rt 
contains,  within  the  financial 
results,  a line  item  headed 
"maintenance"  which 
typically  accounts  for  about 
14%  of  total  revenues. 


• Maintenance  as  defined  by 
IBM  means  "maintaining  the 
customer's  system 
availability"  or  "maintaining 
the  customer  in  business". 
Therefore,  maintenance  in 
IBM  terms  will  include 
traditional  equipment 
maintenance  and  a range  of 
non-maintenance  "services". 

• Service  refers  to  traditional 
remedial  activities.  Services 
refer  to  value-added  services. 
Therefore,  revenues  reported 
as  maintenance  by  IBM 
include  revenue  from  value- 
added  services. 

The  Culture 

The  cultural  environment  within 
IBM,  in  which  the  goal  of 
becoming  a services  company  is 
I key,  is  that  successful  financial 


performance  results  primarily 
from  customer  satisfaction  and 
quality.  Other  factors  rank 
lower  in  IBM's  list  of  priorities. 
Exhibit  B provides  an  indication 
of  how  IBM  grades  its 
worldwide  business  and  the 
ranking  that  each  item  holds  in 
the  cultural  hierarchy.  The  key 
factor  highlighted  by  Exhibit  B 
is  that  user  satisfaction  rates 
number  one  priority  and  that 
market  share  and  financial 
performance  take  up  the 
position  of  follower  rather  than 
leader. 


In  developing  this  type  of 
cultural  environment  IBM 
reasons  that 


3 

In  the  first  instance  if  customer 
satisfaction  is  not  achieved, 
and  progressively  improved, 
customers  will  find 
alternative  suppliers,  and 
quickly.  In  IBM  terms, 
customer  satisfaction  is 
defined  as  the  difference 
between  expectation  and 
experience.  Throughout  the 
year  IBM  anonymously 
surveys  customers 
worldwide  to  assess  how 
customers  feel  about  the 
support,  value  and  solutions 
they  receive  from  all  their 
computer  suppliers.  By 
undertaking  this  activity  IBM 
claims  that  it  learns  about 
customer  loyalty  and  whether 
or  not  customers  feel  they 
have  a partnership  with  their 
suppliers.  To  achieve  this 
understanding  IBM,  for 
example,  surveyed  70,000 
customers  in  38  countries  in 
1990. 


Exhibit  B 

IBM  Business  Measurements  and  Priorities 


The 

route 

to 

successful 

financial 


Source:  INPUT 


performance 


Ranking 

Item 

1. 

Customer  satisfaction 

2. 

Quality 

3. 

People 

4. 

Market  share 

5. 

Financial  performance 

"Maintenance  = Maintaining  the 
Customer  in  Business" 


September  1991 


0 1991  by  INPUT.  Reproduction  prohIMed. 


Continued  on  next  page 

INPUT 


Service  Update 


4 

IBM.  . .from  page  3 

• Quality  measures  relate  to  a 
number  of  different  aspects  of 
IBM's  business  activities,  but 
the  corporation  considers  that 
terms  such  as  billing 
accuracy,  first-time  fix  and 
marketing/system  engineer 
skill  are  the  top  concerns  of 
customers.  Other  aspects  of 
performance  in  quality 
measurements  include: 

- On-time  delivery — are  we 
meeting  commitments  to 
customers? 

- Warranty  costs — indicate 
how  well  IBM's  MDQ 
(Market-Driven  (^ality) 
efforts  are  working. 

- Education — provides  a 
measure  of  how  many 
employees  worldwide  have 
received  basic  education  in 
MDQ  methods. 

- Systems  technology  and 
software  quality  will  soon 
be  added  to  the  list  of 
measures. 

Quality  assessment  is  based  on  a 
scoring  system  similar  to  that 
used  for  the  U.S.  Malcolm 
Baldridge  National  (Quality 
award  and  indicates  IBM's 
progress  towards  a goal  of 
achieving  a perfect  score  of  1000 
points  by  1994. 

• In  an  organisation  of  370,0(X) 
employees,  people  are  a key 
factor  and  IBM  takes  the  view 
that  the  opinions  of 
employees  are  a key  measure 
of  how  successful  the 
corporation  is  in 


transforming  its  organisation 
from  one  of  being  technology 
driven  to  one  of  being  market 
driven.  Achievement  of  this 
assessment  is  via  employee 
surveys  in  which  employees 
are  invited  to  express 
opinions  on: 

- How  involved  they  are  in 
market-driven  quality? 

- How  much  progress  they 
are  making  towards  the 
market-driven  quality  goal? 

- Gauging  perception  of 
management  support  and 
how  well  IBM's  goals  for 
market-driven  quality  have 
been  communicated  to 
employees 

• Market  share  and  growth  are 
used  as  measures  of  IBM's 
success  in  primary  product 
and  service  categories  and 
can  be  segment^  by 
country/ geographic  area  or 
by  customer  grouping.  The 
objective  of  including  this 
item  on  the  list  of  IBM 
business  measures  is  to 
enable  executives  to  tell  at  a 
glance  how  IBM  is 
performing  compared  to  the 
market  overall. 

• Financial  performance  indicates 
how  healthy  the  corporation 
is  in  financial  terms  and 
includes  information  on 
historical  performance  and 
future  prospects. 

A more  detailed  example  of 
what  is  known  as  the  "corporate 
score  card"  is  shown  in  Exhibit 
C.  These  documents  are  updated 
monthly. 


Strategy 

Implementation 

As  stated  earlier  in  this  profile, 
the  IBM  UK  strategy  for 
achieving  customer  satisfaction 
is  focused  on  three  key  areas: 

• Organisation 

• Results  orientation 

• Quality  commitment 

The  implementation  of  this 
strategy  as  discussed  in  this 
profile  deals  primarily  with  the 
Customer  Service  organisation, 
but  by  implication  should  also 
concern  the  overall  organisation 
of  IBM  in  the  United  Kingdom. 
An  outline  of  the  IBM  UK 
organisation  is  provided  in 
Exhibit  D.  This  exhibit 
highlights  that  the  overall 
marketing  operations  of  IBM  UK 
divide  into  four  segments  that 
are  comprised  of  three  industry 
sectors  and  one  geographic 
sector.  Briefly: 

• The  Commercial  Sector  is 
divided  into  eight  geographic 
areas  covering  the  whole  of 
the  U.K.  and  also  includes  the 
ADC  and  ABS  business  units. 

• The  Industrial  Sector  covers 
the  manufacturing  sector, 
including,  for  example,  the 
automotive,  steel,  oil  and 
pharmaceutical  industries. 
Also  included  in  this  sector  is 
the  Printing  Business  Unit. 

• The  Banking,  Financial 
Services  and  Retail  Sector 
includes  areas  such  as  Central 
Banking,  City  of  London, 
Insurance  and  Financial 
Services  and  the  Image 
Solutions  Centre. 


INPUT 


0 1991  by  INPUT.  Reproduction  prohibited. 


September  1991 


Service  Update 


5 


Exhibit  C 


IBM  Business  Measurements 


Customer  Satisfaction  iggo 

1991 

1991  Objective  Best  Competitor 

Status 

Plan 

Overall  Satisfaction 

- 

- 

Partnership 

" 

* “ — 

Quality 

Defect  Elimination 

Education  - 

Warranty  Cost 

Billing  Accuracy  - Mktg/SE  Skill  - 

Assessment  - 

On-Time  Delivery  - 

First-Time  Fix 

People 

1990 

1990  Non 

1991  Status 

1991  Status 

Managers 

Managers 

Managers 

Non  Managers 

Market-Driven  Quality  Index 

- 

- 

- 

- 

Participation  Index 

- 

- 

- 

- 

Market  Share 

IBM/Industry  Revenue  Growth 

Y/E  1990 

YTD 

Plan  Outlook  Long-Range 

- 

- 

- - 

Financial 

Performance 

Year-to-Date 

Current  Year 

Steady  State 
Objective 

Actual 

vs. 

Last  Year 

vs. 

Plan 

Plan 

Outlook 

IBM  Revenue 

Gross  Profit  Margin 

- 

- 

- 

- 

- 

- 

Opex 

- 

- 

- 

- 

- 

- 

Debt  Margin 

- 

- 

- 

- 

- 

- 

Capital  Expenditures 

- 

- 

- 

- 

- 

- 

Total  Assets 

- 

- 

- 

- 

- 

- 

Return  on  Assets 

- 

- 

- 

- 

- 

- 

Return  on  Equity 

- 

- 

- 

- 

- 

- 

Free  Cash  Flow 

- 

- 

- 

- 

- 

- 

Continued  on  next  page 

INPUT 


September  1991 


0 1991  by  INPUT.  Reproduction  prohibited. 


Service  Update 


6 

IBM.  . .from  pages 


Exhibit  D 

IBM  UK  Organisation 


Executive 

Board 


Chairman  and  Chief  Executive 
A.B.  Cleaver 


General  Manager 
V N.J.  Temple 


Business 

Management 

Board 


Manufacturing  and_ 
development 

Personnel  and 
corporate  affairs” 

Finance  and 
planning 

Corporate  staffs  — 


FS 

International 

manager 


European 
AIX  systems 


General  council 
and  secretary  ■ 


I 

Marketing  Organisation 

• Commercial 
sector 

• Industrial 

sector 

• Banking,  financial 

services  and  retail 
sector 

• Government  and 
public  services  sector 

t 

European  Services 
Coordination 


Marketing 
— and  services 
operations 


Marketing 
— staff  and 
services 

Personal 
_ systems 
business 
unit 


Source:  INPUT 


INPUT 


0 1991  by  INPUT.  Reproduction  probibtted. 


September  1991 


Service  Update 


7 


• The  Government  and  Public 
Services  Sector  includes  the 
airline  industry,  central 
government,  local 
government  and  health.  Also 
included  in  this  sector  is  the 
Enterprise  Systems  Business 
Unit. 

Exhibit  D also  highlights  that 
the  executive  management  of 
IBM  UK  is  overseen  by  two  new 
boards,  the  Executive  Board  and 
the  Business  Management 
Board.  The  appointment  of 
these  two  boards  occurred  in 
April  1991  and  replaced  the 
former  Management  Committee 
and  Services  Operations 
Committee.  The  role  of  the 
Executive  Board  is  to  set 
company-wide  goals  consistent 
with  direction  from  European 
Executive  Management, 
whereas  the  role  of  the  Business 
Management  Board  is  to 
develop  and  execute  strategies 
and  operating  plans  concerned 
with  achievement  of  country- 
level  goals. 

At  the  mid-year  Managers' 
Briefing  meeting  IBM  UK 
chairman  and  chief  executive, 
Mr.  Tony  Cleaver,  said: 

"Our  prime  objective  now  is  to 
improve  our  customer 
satisfaction  level — and  we  have 
restructured  the  company  in  an 
unprecedented  way  to  make  this 
happen" — "The  way  to  increase 
customer  satisfaction  is  by 
applying  Market-Driven  Quality 
techniques." 

As  part  of  recent  reorganisations 
within  IBM  UK,  the  Customer 
Service  organisation  is  now 
structured  as  11  geographic 
branches  that  are  seif-goveming. 
Formerly  the  organisation  was 
based  on  regions.  Further,  each 

September  1991 


Customer  Service  branch  is 
assimilating  systems 
engineering  responsibility  by 
implementing  a job  role  referred 
to  as  Customer  Op>erational 
Support  Specialist. 

However,  organisational 
changes  are  one  matter;  more 
important  is  that  the  changes 
result  in  measurable 
performance  improvements — 
from  the  company's  point  of 
view  and  from  that  of 
customers.  IBM  UK  claims  that 
it  is  achieving  these 
improvements  in  two  ways — 
through  the  REFLEX 
programme  and  by 
implementing  visible  quality. 

REFLEX  Programme 

In  January  1991,  the  Customer 
Service  organisation  introduced 
REFLEX,  a customer  survey 
programme  that  addresses 
timing  and  action.  The  name 
REFLEX  indicates  the  bounce- 
back  nature  of  the  programme, 
which  for  the  present  applies 
only  to  hardware-relat^  calls. 

The  reasoning  of  IBM  Customer 
Service  behind  the  introduction 
of  REFLEX  is  that  the  existing 
customer  survey,  which  is  still 
in  operation,  is  not  sufficiently 
proactive  or  reactive  enough  for 
Customer  Service.  The 
"normal"  IBM  customer 
satisfaction  survey  is  carried  out 
twice  per  year,  using  a random 
selection  from  the  customer 
base,  and  covers  all  aspects  of 
service. 

REFLEX  is  different: 

• Interviews  are  conducted 
with  the  true  end  user. 


ei991  by  INPUT.  Reprodudlon prohibited. 


• Users  are  interviewed  by 
telephone  and  interviews  are 
focussed  towards  customers 
who  placed  a caU  with 
Customer  Service  the 
previous  week. 

• Each  branch  conducts  100 
customer  interviews  per 
month,  equating  to  1,200  total 
interviews  per  month  and 
14,400  interviews  per  year. 

• The  aim  of  REFLEX  is  to  be 
proactive  and  reactive. 

• Calls  take  less  than  a minute 
of  the  customer's  time,  to 
minimise  disruption  to  the 
customer's  business. 

The  REFLEX  survey  asks  just 
four  questions  of  customers, 
when  interviewed,  on  the  basis 
that  "you  have  used  IBM 
service": 

1 . "When  you  placed  your  call 
for  service,  were  you  satisfied 
with  the  way  that  it  was 
handled?" 

2.  "Did  the  time  between  your 
call  and  the  solution  to  your 
problem  meet  your 
expectations?" 

3.  "Did  our  [IBM]  service 
representative  perform  the 
work  in  an  efficient  manner 
to  your  satisfaction?" 

4.  "Did  our  [IBM]  overall 
service  performance  meet, 
exceed  or  fall  below  your 
expectations?" 

Data  collected  during  REFLEX 
programme  surveys  is  used  in 


Continued  on  next  page 

INPUT 


8 


two  ways.  Firstly,  branch 
manager  performance  is 
measured,  year  to  date,  on 
selected  target  results. 

Secondly,  statistics  collected  as  a 
result  of  the  REFLEX 
programme  are  used  to  calculate 
an  incentive  element  of  each 
Customer  Service  branch 
manager's  salary.  Objectives  for 
the  REFLEX  programme  and  the 
improvements  that  result  from 
its  implementation  are  that  IBM 
is  committed  to  halve  the 
percentage  of  dissatisfied  users 
by  the  end  of  1991.  The  ongoing 
objective  for  REFLEX  is  to 
reduce  the  number  of 
dissatisfied  users  to  zero. 

The  REFLEX  survey  is 
conducted  by  an  independent 
market  research  organisation 
and  interviewers  are  briefed  to 
respond  to  customers  who 
express  great  dissatisfaction. 

The  interviewer  can  ask  if  the 
customer  would  like  their 
concerns  referred  to  the 
appropriate  Customer  Service 
branch  for  immediate  attention. 


performance  matches  customer 
expectation. 

The  internal  impact  of  REFLEX 
has  also  proved  to  be  important. 
According  to  IBM, 
implementation  of  the 
programme  has  led  to  a high 
degree  of  excitement,  discussion 
and  anticipation  within  the 
internal  organisations — raising 
competitive  spirit. 

INPUT  considers  that  by 
implementing  the  REFLEX 
programme  IBM  has 
significantly  raised  the  level  of 
its  conunitment  to  customer 
satisfaction.  Of  particular  note 
is  firstly  the  continuous  nature 
of  the  programme  and  the  way 
results  are  updated  in  almost 
"real-time".  Secondly,  and 
perhaps  most  importantly,  is  the 
way  the  programme  has  been 
develop^  to  provide  a results- 
orient^  component  that 
influences  incentives  at  the 
branch  level. 

At  the  start  of  1991,  when  the 
REFLEX  programme  was 
implemented,  IBM  found  that  a 
relatively  consistent  93.5%  of 


"REFLEX  — A commitment  by  IBM  to 
achieve  totally  satisfied  customers." 


IBM  claims  that  REFLEX  is  a 
clear  indication  to  customers 
that  it  wants  to  offer  high- 
quality  service  and  one  objective 
is  to  provide  a clear  signal  to 
customers  that  IBM  really  cares 
about  their  opinions.  Further, 
by  implementing  REFLEX,  IBM 
wants  to  ensure  that  service 


customers  were  satisfied  or 
delighted  with  the  quality  of 
service  received  from  IBM.  By 
May,  1991  this  figure  had 
increased  to  95%  as  a result  of 
the  REFLEX  programme,  a 
commendable  result.  However, 
taking  into  account  the  large 
number  of  customers,  a 95% 


success  rate  meant  that  each 
Customer  Service  branch  was 
still  disappointing  one  customer 
every  hour,  365  days  per  year. 

Being  obsessed  with  quality  and 
defect  elimination,  IBM  now 
talks  in  terms  of  failure  rate 
instead  of  success  rate.  It  started 
the  year  with  a 6.5%  failure  rate, 
claiming  that  by  August  this  had 
been  reduced  to  2.9%  and  in 
September  to  2.2%. 

The  success  of  REFLEX  in  terms 
of  reducing  failure  rates  has 
surpassed  IBM's  original  target 
of  achieving  a level  of  3%  by  the 
end  of  1991.  Over  the  same 
period,  January  to  September 
1991,  the  number  of  calls 
referred  to  the  Customer  Service 
branches  for  immediate 
attention  is  claimed  to  have  been 
reduced  by  80%. 

Though  it  claims  considerable 
success  in  reducing  failure  rates, 
IBM  does  not  intend  to  relax.  Its 
goal  is  to  achieve  zero  defects; 
IBM  Customer  Service  claims 
that  REFLEX  is  the  most 
powerful  tool  it  has  to  achieve 
this  goal. 

INPUT  contends  that  taking  into 
account  the  sheer  size  of  the  IBM 
customer  base  it  is 
commendable  that  an 
organisation  of  this  size  should 
achieve  such  a high  degree  of 
success  in  customer  satisfaction. 

One  further  aspect  of  REFLEX  is 
that  it  provides  opportimity  for 
an  ongoing  dialogue  with 
customers.  INPUT  contends 
that  regular  communication  is 
also  a key  element  of  improving 
customer  satisfaction. 


INPUT 


0 1991  by  INPUT.  Reproduction  prohibited. 


September  1991 


Service  Update 


9 


Visible  Quality 

As  part  of  IBM's  commitment  to 
customer  satisfaction  the  topic 
of  quality  in  all  aspects  of  the 
business  rates  highly,  not  just 
quality  but  QUALITY.  IBM's 
commitment  to  quality  can  be 
assessed  in  three  parts: 

• Implementation  of  the 
REFLEX  programme 

• Introduction  of  MDQ 
(Market-Driven  Quality) 

• Visible  and  demonstrable 
proof  of  that  commitment 


IBM's  commitment  to 
demonstrable  quality  is  not 
new.  As  early  as  August  1986 
the  Customer  Service 
Organisation  (then  Customer 
Engineering)  was  awarded 
national  BS  5750/ISO  9001 
certification.  This  was  achieved 
in  August  1986  and  not 
"recently"  as  was  reported  in 
the  U.K.  computer  press  earlier 
this  year.  This  award  makes 
IBM  one  of  the  very  early 
qualifiers  for  this  certification 
award. 

Of  more  significance,  in  May 
this  year  IBM  UK  was  awarded 
company- wide  BS  5750 /ISO 
9001  certification  and  claims  to 
be  the  first  major  company  in 
the  U.K.  to  achieve  company- 
wide recognition  at  this  level. 


The  successful  assessment  and 
registration  to  BS  5750/ISO  9001 
was  gained  within  the  British 
Standards  Institute's  (BSD 
"Corporate  Approval" 
programme  and  covers  all  IBM 
UK's  products,  goods  and 
services,  including  the 
marketing  organisation. 

IBM  is  keen  to  point  out  that 
certification  by  the  BSI  is  not 
granted  just  on  the  basis  of  an 
original  sample  audit,  but  is  part 
of  a continual  assessment 
programme.  IBM  indicates  that 
in  practice  the  continual 
assessment  programme  means 
that  the  BSI  will  assess  all  IBM 


UK  sites  at  least  every  two  years 
and  with  only  48  hours'  notice 
given  for  a reassessment  visit. 
Maintaining  registration  is 
dependent  on  the  outcome  of 
these  periodic  reassessments  by 
BSI;  therefore  the  standards 
under  which  certification  was 
first  awarded  need  to  be 
consistently  maintained. 

The  award  of  company-wide  BS 
5750/ISO  9001  was  announced 
by  IBM  UK  Chairman  and  Chief 
Executive  Mr.  Tony  Cleaver  at  a 
senior  management  meeting.  In 
commenting  on  the  achievement 
Mr.  Cleaver  said:  "Achieving 
the  award  is  a valuable  first  step 
on  the  road  to  Market-Driven 
Quality — ^and  of  course  it  is  a 
powerful  marketing  tool,  giving 


visibility  to  IBM  UK's 
commitment  to  quality  in  every 
aspect  of  our  businesses." 

The  announcement  also 
coincided  with  a visit  to  the  U.K. 
by  IBM  Chairman  Mr.  John 
Akers,  who  in  commenting  on 
how  pleased  he  was  at  the 
achievement  said,  "It  is  a 
continuation  of  the  quality  drive 
we  are  putting  the  whole 
Corporation  through." 

Range  of  Services 

In  part  two  of  this  in-depth 
profile  on  IBM  UK,  INPUT  will 
review  in  detail  the  range  of 
services  provided  by  the 
Customer  Service  organisation. 

Part  two  will  be  published  in  the 
October  1991  issue  of  Service 
Update.  As  a preview  of  this 
second  part  Exhibit  E illustrates 
the  approach  adopted  by  IBM. 

In  describing  the  model 
illustrated  in  Exhibit  E,  IBM  uses 
the  anachronym  SPIOME,  which 
can  be  explained  as 


s 

— > Strategy 

p 

— > Planning 

I 

— > Implementation 

o 

— > Operation 

M 

— > Maintenance 

E 

— > Evaluation 

IBM  has 

recently  brought 

together  all  of  its  Consultancy 
and  Services  offerings  under  a 
single  KNOW-HOW  marketing 
banner.  Within  the  SPIOME 
business  cycle,  the  IBM 
Customer  Service  function  offers 
a wide  range  of  services  which 
primarily  address  the  I,  O and  M 
phases. 

Continued  on  next  paee 

INPUT 


"IBM  UK  Achieves  Company- Wide 
BS  5750/ISO  9001  Certification" 


September  1991 


0 1991  by  INPUT.  Reproduction  prohIbKad. 


10 


IBM.  . .from  page  9 


Exhibit  E 

IBM  Advanced  Operational  Support 


The  conceptual  or  “thinking”  part 


The  physical  or  “doing”  part 


Source;  INPUT 


INPUT 


0 1991  by  INPUT.  Reproduction  prohibited. 


September  1991 


Service  Update 


11 


NCR/AT&T  Update 


At  the  end  of  August,  NCR  & 
AT&T  announced  a change 
to  the  original  plan  of  a public 
offering.  The  companies  have 
agreed  to  sell  all  of  the  6.3 
million  shares  of  NCR  common 
stock  in  a direct  placement  at  a 
price  of  $102.75  per  share  to  four 
clients  of  The  Capital  Group, 
Inc.,  a Los  Angeles  investment 
management  organisation.  The 
four  companies  are  Capital 
Research  and  Management 


Intelogic  Trace 

The  Company 

Intelogic  Trace  (I  T)  was  formed 
as  a spin-off  of  Datapoint 
Corporation's  U.S.  customer 
services  division  in  1985, 
acquiring  the  Canadian 
subsidiary  of  Datapoint  in  1990. 

I T has  an  exclusive  agreement 
with  Datapoint  to  maintain 
Datapoint  systems.  Therefore, 

I T has,  in  effect,  been  in  the 
business  of  providing  premium 
computer  maintenance  services 
since  the  late  1960s. 


Company  (manager  of  The 
America  Funds  Group),  Capital 
Guardian  Trust  Company 
(manager  of  institutional 
accounts).  Capital  International 
Ltd.  (London),  and  Capital 
International  S.A.  (Geneva). 

The  NCR  stock  is  being  issued 
to  allow  AT&T  to  account  for 
the  merger  as  a pooling  of 
interests.  The  sale  of  NCR 
shares  will  be  completed  after 


Intelogic  Trace,  headquartered 
in  San  Antonio,  Texas,  offers 
customers  three  basic  categories 
of  full-service  support: 
maintenance  services  for 
business  computing  systems; 
sales  and  leasing  of  equipment 
and  industry-specific  software; 
and  a wide  variety  of  technical 
support  services.  I T offers 
services  throughout  the  U.S., 
Canada,  and  Puerto  Rico.  The 
company  had  total  revenues  in 
1990  of  $153  million,  with  200 
service  locations  and  1,500 
employees. 


NCR  shareholders  approve  the 
merger  at  a meeting  scheduled 
for  the  beginning  of  September. 

In  a later  release,  NCR  and 
AT&T  announced  that  2.839 
shares  of  AT&T  stock  will  be 
exchanged  for  each  share  of 
NCR  stock  in  AT&T's  all-stock 
acquisition  of  NCR.  If  the 
merger  is  approved  by 
shareholders,  AT&T  and  NCR 
expect  to  close  the  merger  the 
following  week.  ■ 


Service  Offerings 

Intelogic  Trace  is  considered  to 
be  one  of  the  largest 
independent  maintenance 
companies  in  the  U.S.,  providing 
third-  and  fourth-party 
maintenance  services.  I T is  an 
Authorised  Service  Provider  for 
many  companies,  such  as  Arix, 
AST,  Compaq,  Facit,  Gestetner, 
GRiD,  Hyundai,  Novell, 
Samsung,  Tele  video,  Toshiba, 
andWyse.  Services  are 
provided  on  an  on-site 
maintenance  basis  as  well  as 

Continued  on  next  page 

INPUT 


September  1991 


e>  1991  by  INPUT.  Repnxliiction  prohibKed. 


Service  Update 


12 


Intelogic..  .from  page  11 

through  carry-in  and  mail-in 
centres  nationwide.  The 
average  turnaround  time  for 
equipment  serviced  through  the 
carry-in  centre  is  from  three  to 
five  days,  with  a 90-day 
warranty  on  parts  included. 

In  response  to  customer 
demands,  Intelogic  Trace 
has  expanded  its  on-site 
maintenance  business  to 
include  over  5,000 
products  from  over  350 
vendors.  Equipment 
maintenance  accounts  for 
over  70%  of  1 T's  total 
revenue.  I T is  attempting 
to  distinguish  itself  in  the 
service  marketplace  as  a 
full-service  provider, 
tailoring  offerings  to  the 
requirements  of  the  client. 
Flexible  service  contracts 
are  written  with 
guaranteed  response  and 
repair  times  according  to  the 
requirements  of  the  client. 
Customers  can  also  take 
advantage  of  special  mail-in 
service  or  24-hour  exchange  by 
courier  programs  according  to 
the  criticality  of  the  system.  1 T 
also  offers  high-level  technical 
support  capabilities,  as  shown  in 
Exhibit  F. 

1 T believes  that  one  important 
criterion  of  quality  is 
promptness  in  the  delivery  of 
products  and  services.  Recent 
innovations  by  1 T include  the 
ANSWER  inventory  distribution 
system,  the  'Tech-in-the-Box" 
electronic  tool  box,  and  two- 
hour  response  time  on  failures 
of  network  file  servers.  The 
Tech-in-the-Box  electronic  tool 
kit  allows  the  technician  to 


trouble-shoot  networks  using  a 
PC/AT  clone  with  special 
hardware  and  software  features. 
The  Tech-in-the-Box  plays  the 
part  of  a known  good  computer, 
connecting  to  the  failing 
peripheral  or  network,  isolating 
failing  components  without 
bringing  down  the  network. 


Intelogic  Trace  also  offers 
special  capabilities  for  IBM 
midrange  systems,  Wang 
systems,  Novell  LANs,  and 
microcomputers. 

• IBM  Midrange  Systems:  The 
Uniplan  pacl^ge  includes 
low-cost  equipment  sales  and 
leasing  alternatives, 
maintenance  services,  and  a 
wide  variety  of  technical 
support  services. 

• Wang  Systems:  A 
comprehensive  service 
pactege  incorporates 
specially  developed 
diagnostics,  guaranteed 
phone  and  on-site  response 
time,  and  ready  access  to 
local  and  regional  parts 


centres.  Refurbished  Wang 
equipment  and  compatible 
peripherals  are  offered,  in 
conjunction  with  a co- 
marketing  agreement  with 
EMC  for  Wang-compatible 
storage  products  (main 
memory  and  high-speed  disk 
subsystems)  for  Wang  VS 
systems. 

• Novell  LANs:  I T,  an 
authorised  Novell 
Support  Organisation, 
offers  premium 
maintenance  and 
support  for  Novell 
users.  IT  has 
developed  an  in-house 
training  program  for 
CEs  covering  the 
NetWare  operating 
system,  system 
management,  service, 
diagnostics,  trouble- 
shooting, and  data 
communications. 

• Microcomputers:  I T 
specialises  in  providing 

maintenance  services  to  firms 
having  microcomputers  from 
multiple  vendors  in 
geographically  dispersed 
locations.  IT  has  broad 
experience,  servicing 
virtually  every  name  brand 
microcomputer.  ■ 


Exhibit  F 

Intelogic  Trace 
Full-Service  Capabilities 


• Conversion  assistance 

• Telephone  support 

• Disaster  assistance 

• Staging  and  integration 

• Installation  services 


Source:  INPUT 


INPUT 


C 1991  by  INPUT.  Reprodudlon  prohibited. 


September  1991 


Service  Update 


13 


Snippets 


❖ In  the  U.K.  it  was  announced  this  September  that  the  French 
company  France  Cables  et  Radio  has  taken  a 30% 
shareholding  in  the  U.K.  company.  Infact  Ltd. 

The  interest  for  customer  services  in  this  announcement  is 
that  Infact  is  an  intelligent  buildings  and  communications 
consultancy.  The  company  is  bas^  in  London  and  as  a 
result  of  the  share  acquisition,  the  existing  U.K.  business  of 
France  Cables  will  be  handled  by  Infact. 

France  Cables  et  Radio  is  a subsidiary  of  France  Telecom  and 
recently  formed  a joint  venture  satellite  services  company 
with  Maxwell  Communications  Corp  PLC.  This  joint  venture 
is  also  London  based. 

❖ An  example  of  successful  application  of  ISDN  to  the  disaster 
recovery  sector  has  been  provided  by  Datashield  Ltd.  This 
example  concerns  a test  involving  the  delivery  of  back-up 
services  across  the  channel  to  France  from  the  U.K.  Involved 
in  this  exercise  were  Sogeris  SA,  a French  disaster  recovery 
supplier,  and  Credit  Mutuel  Maine- Anjou,  a client  of  Sogeris 
operating  in  the  banking  sector  and  based  in  Normandy. 

Tests  were  carried  out  using  a British  Telecom  ISDN  2 
connection  and  these  tests  confirmed  that  Credit  Mutuel  can 
switch  its  operations  over  to  the  Datashield  site  in  Hayes  near 
Heathrow  Airport  in  the  U.K. 

Datashield  is  the  disaster  recovery  arm  of  Data  Sciences  UK 
Ltd.,  the  company  that  was  formed  from  a management 
buyout  of  Thom  EMI  Software  on  1 August  1991  (see 
announcement  in  the  August  1991  INPUT  Service  Update). 

❖ More  news  on  the  subject  of  ISDN — the  U.K.  Post  Office  and 
Gandalf  Digital  Communications  Ltd.  have  announced  an 
agreement  to  develop  an  analogue  voice  card  for  Gandalf's 
ISDN-compatible  Starmaster  system. 

The  initial  contract  resulting  from  this  agreement  is  valued  at 
£3  million  (about  $5.8  million)  and  the  U.K.  Post  Office 
information  technology  division  will  use  the  card  in  its 
private  voice  and  data  network. 

The  card  allows  connection  between  analogue  PABX  systems 
and  Starmaster,  enabling  the  integration  of  voice  and  data 
traffic  and  eliminating  the  need  to  replace  analogue  PABX 
systems  with  newer  digital  versions.  Initially  it  is  planned 
that  about  140  systems  will  be  installed  in  the  network. 


Continued  on  next  page 

INPUT 


September  1991 


0 1991  by  INPUT.  Reproduction  prohibited. 


Service  Update 


14 


Snippets 


❖ In  the  U.K.,  PC  manufacturer  Amstrad  has  provided  what 
could  be  a major  opportunity  for  independent  maintenance 
companies  operating  in  the  PC  sector  of  the  market.  Whilst 
providing  an  opportunity,  Amstrad  may  also  have  created  a 
major  battle  between  companies  fighting  to  gain  contracts  for 
the  servicing  of  Amstrad  PCs  and  associated  p>eripherals. 

This  situation  results  from  a decision  made  by  Amstrad  to 
withdraw  from  providing  free  on-site  maintenance  for  users  of 
the  3000  range  of  PC  equipment.  The  reason  for  this  move  by 
Amstrad  is  to  save  cost  through  reducing  the  level  of  support 
commitment  to  users,  a move  that  reduces  warranty  supp)ort  to 
a "return  to  base"  service.  The  reduction  in  Amstrad  warranty 
support  leaves  dealers  free  to  sell  their  own  on-site 
maintenance  service. 

One  company  to  take  early  advantage  of  the  opportunity  was 
Newbury  Data  Maintenance  in  offering  a one-year  on-site 
warranty  service  to  dealers  for  just  £50  (about  $95)  per  PC.  This 
offer  provides  next-day  service  and  includes  all  parts  and 
labour. 

❖ In  the  USA,  AT&T  has  announced  the  closure  of  its  computer 
repair  and  distribution  centre  based  in  Memphis,  Tennessee. 
Closure  of  the  centre,  which  only  opened  about  one  year  ago, 
will  result  in  the  loss  of  about  230  jobs;  the  activities  carried  out 
there  will  be  taken  over  by  the  extensive  repair  network  of 
NCR. 

❖ Also  in  the  U.S.,  Novadyne  Computer  Systems,  Inc.  has 
announced  the  award  of  a three-year  contract  to  provide 
hardware  service  and  support  to  Southwestern  Bell  Yellow 
Pages  (SBYP).  Novadyne  will  provide  on-site  service  for 
SBYFs  two  main  processing  centres  and  an  on-call  service  at  22 
other  sites  in  Arkansas,  Kansas,  Missouri,  Oklahoma  and 
Texas.  With  headquarters  located  in  St  Louis,  MO,  SBYP 
produces  more  than  400  yellow-pages  and  white-pages 
directories  in  a five-state  territory. 

❖ In  the  U.K.,  the  Milton  Keynes-based  Audio  Installation  and 
Maintenance  Services  Ltd.  has  been  subject  to  a management 
buyout.  The  new  company  will  be  known  as  AIMS  Technology 
Ltd. 

The  management  buyout  was  achieved  with  financial  backing 
from  3i  PLC,  a company  active  in  the  venture  capital  market, 
and  was  led  by  Mr.  Bill  Sparks,  managing  director  of  AIMS 
Technology.  Financial  support  for  the  buyout  was  in  the  form 


INPUT 


0 1991  by  INPUT.  Reproduction  prohibited. 


September  1991 


Service  Update 


15 


Snippets 


of  £40,000  share  capital  (about  $78,000)  on  a 10,000  share  issue. 
Mr.  Sparks  owns  65%  of  the  shares  and  3i  owns  the  remainder. 
Following  the  buyout,  which  occurred  on  27  June  this  year,  the 
new  company  plans  to  clarify  the  separate  divisions  of  the 
company  and  implement  plans  to  expand  into  the  mainland  of 
Europ)e. 

The  company  claims  to  have  signed  a £25,000  (about  $48,000) 
three-year  contract  with  a computer  company  based  in  the 
Netherlands.  This  contract  is  for  the  assembly  of 
communications  cables.  Currently  about  70%  of  the  company's 
business  is  oriented  towards  the  IBM  market  in  the  areas  of  data 
services  and  channel  cables.  However,  the  company  does  not 
deal  directly  with  IBM,  but  rather  through  the  rcM  route 
including  companies  such  as  StorageTek  and  Amdahl. 
Remaining  business  is  achieved  from  data  communications 
cables  (about  20%)  and  environmental  noise  controllers  (about 
10%). 

The  data  services  division  of  AIMS  is  concerned  with 
consultancy,  project  management  and  the  environmental  needs 
associated  with  the  installation  and  commissioning  of  computer 
systems. 

❖ In  Germany,  BASF  AG  has  become  the  sole  owner  of  Comparex 
Informationssysteme  GmbH,  following  the  sale  by  Siemens  AG 
of  its  33.5%  shareholding  in  Comparex  to  BASF.  Despite  the 
recession  that  is  hitting  the  computer  industry  across  Western 
Europe,  Comparex  has  reported  a 3%  increase  in  sales  for  the 
first  half  of  1991.  Turnover  from  services  provided  by 
Comparex  is  rising  and  now  accounts  for  about  $58  million,  or 
19%  of  turnover. 

❖ U.S.  company  3Com  Corp.  is  considering  plans  for  its  first 
European  manufacturing  facility.  Initially  this  new  facility  will 
manufacture  Ethernet  network  adaptors  but  later  will  expand  to 
include  additional  products.  At  present,  plans  favour  the  Irish 
Republic  as  a location  for  the  new  facility  and  a temporary 
facility  will  open  near  Dublin  towards  the  end  of  1991.  ■ 


September  1991 


C 1991  by  INPUT.  Reproduction  prohibited. 


INPUT 


About  INPUT 


INPUT  provides  planning  information,  analysis,  and  recommendations  for  the 
information  technology  industries.  Through  market  research,  technology 
forecasting,  and  competitive  analysis,  INPUT  supports  client  management  in 
making  informed  decisions. 

Subscription  services,  proprietary  research /consulting,  merger /acquisition 
assistance,  and  multiclient  studies  are  provided  to  users  and  vendors  of  information 
systems  and  services.  INPUT  spedaKs^  in  thesqftware  and  services  industry 
which  includes  software  products,  systems  operations,  processing  services,  network 
services,  systems  integration,  professional  services,  turnkey  systems,  and  customer 
services.  Particular  areas  of  expertise  include  CASE  analysis,  information  systems 
planning,  and  outsourcing. 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior  management 
positions  in  operations,  marketing,  or  planning.  This  expertise  enables  INPUT  to 
supply  practical  solutions  to  complex  business  problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a leading 
international  research  and  consulting  firm.  Clients  include  more  than  100  of  the 
world's  largest  and  most  technically  advanced  companies. 


INPUT  OFFICES 


North  America 

San  Francisco 

1280  Villa  Street 

Mountain  View,  CA  94041-1194 

Tel.  (415)  961-3300  Fax  (415)  961-3966 

New  York 

Atrium  at  Glenpointe 
400  Frank  W.  Burr  Blvd. 

Teaneck,  NJ  07666 

Tel.  (201)801-0050  Fax  (201)  801-0441 

Washington,  D.C. 

INPUT,  INC 

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Vienna,  VA  22182 

Tel.  (703)  847-6870  Fax  (703)  847-6872 


International 

London 
INPUT  LTD. 

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INPUT 


Service 

Update 


Route; 


© INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — International 

October  1991 


IN 

THIS 

ISSUE: 


1 ...IBM  Offers  a Wide  Range  of  Services 

Part  2 of  a Major  Review  of  IBM  UK  Customer  Service 

16  ...Granada  Update 

17...  News  from  the  USA 
IBM  Offers  Software 

18  ...Snippets 


IBM  Offers  a Wide  Range  of  Services 

Part  2 of  a Major  Review  of  IBM  UK  Customer  Service 


Last  month's  Service  Update 
highlighted  IBM's  linkage  of 
the  achievement  of  corporate 
goals  to  customer  satisfaction, 
and  the  programmes  that  have 
been  implemented  by  IBM  UK 
to  achieve  these  goals. 

Part  2 of  this  in-depth  profile  on 
IBM  UK  provides  a detailed 
review  of  the  range  of  services 
provided  by  IBM  UK  Customer 
Service. 

At  the  outset  it  is  worth 
restating  that  maintenance  as 
defined  by  IBM  means 
"maintaining  the  customer's 
system  availability"  or 
"maintaining  the  customer  in 
business."  Therefore, 


maintenance  in  IBM  terms  will 
include  traditional  equipment 
maintenance  and  a range  of  non- 
maintenance services. 

Part  1 of  this  major  review  of 
IBM  UK  Customer  Service  gave 
a preview  of  the  approach  to 
service  adopted  by  IBM.  This 
approach  is  illustrated  in 
Exhibit  A. 


In  describing  the  model 
illustrated  in  Exhibit  A,  IBM 
uses  the  acronym  SPIOME: 


S — > Strategy 
P — > Planning 
I — > Implementation 
O — > Operation 
M — > Maintenance 
E — > Evaluation 

IBM  has  recently  brought 
together  all  of  its  Consultancy 
and  Services  offerings  under  a 
single  KNOW-HOW  marketing 


banner.  Within  the  SPIOME 
business  cycle  the  IBM 

Continued  <?n  next  page 


"Maintenance  = Maintaining  the 
Customer  in  Business" 


Service  Update 


2 

IBM.  . .from  page  1 

Customer  Service  organisation 
offers  a wide  range  of  services 
that  primarily  address  the  I,  0, 
and  M phases. 

Another  factor  highlighted  in 
Part  1 of  this  profile  is  that  IBM 
Customer  Service  was  awarded 
national  BS  5750/ISO  9001 
certification  in  August  1986. 
Also,  in  May  this  year,  IBM  UK 


was  awarded  companywide  BS 
5750/1S0  9001  certification, 
which  covers  all  IBM  UK 
products,  goods  and  services. 
Therefore,  the  IBM  UK 
operations  contain  an  element  of 
constant  quality  monitoring  and 
a visible  commitment  to  quality. 
It  is  against  this  background  of 
commitment  that  the  range  of 
services  now  offered  by  IBM  UK 
should  be  judged. 


The  range  of  services  available 
from  IBM  UK  Customer  Service 
now  extends  well  beyond  the 
provision  of  traditional 
maintenance. 

IBM  Service  Package 

The  elements  of  IBM  Advanced 
Operational  Support  are 
illustrated  in  Exhibit  A;  this 
exhibit  highlights  the  business 
cycle  that  is  concerned  with  a 


Exhibit  A 


IBM  Advanced  Operational  Support 

The  conceptual  or  “thinking"  part 


Maintenance 


Operation 


Implementation 


X / / 


The  physical  or  "doing”  part 


Source:  INPUT 


INPUT 


e 1991  by  INPUT.  Reproduction  prohibited. 


October  1991 


Service  Update 


I 

customer's  implementation  of 
an  information  technology 
solution  to  meet  a business 
requirement.  Exhibit  A 
provides  identification  of  two 
clearly  defined  phases  of  an  IT 
business  solution  or  strategy; 

• The  conceptual  phase,  in 
which  the  customer  decides 
on  the  precise  requirements 
of  an  IT  solution  and  how 
those  requirements  can  be 
met  by  defining  the  system 
configuration. 

• The  physical  phase,  in  which 
the  IT  solution  is 
implemented  within  an 
infrastructure  of  services  to 
support  the  operational 
requirements  of  the  system. 

In  developing  Advanced 
I Operational  Support,  IBM  has 
reasoned  that  choice  of  solution 
is  only  the  first  part  of  a long 
and  continuing  cycle  of  events. 
The  second  part  of  this  cycle  is 
recognition  that  installation, 
operation  and  maintenance  are 
crucial  if  the  user  is  to  achieve 
optimum  system  performance 
and  productivity. 

It  is  in  recognition  of  the 
increasing  importance  of  this 
second  part  of  the  business  cycle 
that  IBM  has  focussed  on  user 
satisfaction  as  a key  element  of 
ongoing  business  relationships, 
and  has  extended  the  range  of 
services  offered  to  ensure  full 
coverage  of  user  requirements. 
Part  1 of  this  profile  on  IBM 
highlighted  the  fact  that  IBM  has 
placed  customer  satisfaction  at 
the  top  of  its  list  of  priorities.  In 
order  to  achieve  high  levels  of 
I customer  satisfaction,  IBM  must 
* provide  a full  range  of  services 
to  meet  customer  needs.  In 


October  1991 


brief,  it  must  be  seen  by  the 
customer  as  a business  partner. 

In  1987,  IBM  UK  Customer 
Service  started  on  the  path 
toward  becoming  a full-service 
provider.  The  success  the 
company  achieved  can  be  seen 
in  the  range  of  services  offered 
today. 

The  extent  to  which  the  IBM 
Customer  Service  organisation 
contributes  to  the  range  of 
services  offered  to  customers  is 
illustrated  in  Exhibit  B.  This 
exhibit  indicates  how  the 
Customer  Service  organisation 
satisfies  the  I,  O and  M parts  of 
the  IBM  Advanced  Operational 
Support  concept. 

The  range  of  services  provided 
by  IBM  Customer  Service  falls 
into  three  clearly  defined 
categories,  briefly  described  as 
follows: 

• Implementation  relates  to: 

- The  physical  planning  and 
installation  services  for  a 
wide  range  of  IBM  prod- 
ucts, including  a 
customised  installation 
service  for  pre-configuring 
and  customising  IBM  and 
non-IBM  products.  Second- 
user  equipment  can  also  be 
included. 

- IBM  Cable  Design  and 
Installation  services  are 
aimed  at  new  computer 
systems  or  network  installa- 
tions (including  reloca- 
tions). These  services 
include  the  IBM  Cabling 
Systems,  which  offer  a 
complete  solution  for  data 
communications  wiring  and 
fibre  optic  cabling. 

e 1991  by  INPUT.  Reprcxludlon  prohibited 


- Site  services  are  designed  to 
provide,  where  necessary, 
the  correct  working  envi- 
ronment for  the  computer 
system — for  example, 
special  power  supplies  or 
wiring.  The  service  can  also 
provide  an  environmental 
check  to  ensure 
optimisation  of  the  com- 
puter environmental  facili- 
ties. 

- Software  migration  and 
conversion  services  are 
aimed  at  ensuring  that  these 
activities  are  carried  out  in  a 
controlled  and  secure  way. 
The  service  includes  migra- 
tion aid  facilities,  and 
training  and  support  of 
customer  staff. 

- During  the  implementation 
phase,  IBM  offers  degrees  of 
support  to  users  ranging 
from  the  provision  of 
additional  resources  to  full 
responsibility  for  project 
management. 

• Operational  services  include: 

- Help-desk  services  provide 
access  to  IBM's  automated 
help  desk  and  services  can 
be  customised  to  include 
diagnostic  and  preventive 
aids.  IBM  reasons  that  one 
help-desk  specialist  is 
required  for  every  200  end 
users. 

- Software  loading  services 
provide  IBM  specialists  to 
load  new  systems  software 
or  updates  at  the  customer's 
site. 

- Monitoring  services  are 
aimed  at  providing  checks 

Continued  on  next  page 

INPUT 


Service  Update 


4 


IBM.  . .from  page  3 


Exhibit  B 


IBM  Advanced  Operational  Support 


f ^ ' Aspects  Addressed 
, ,,  by  Customer  Service 

s 

p 

1 0 M 

E 

Implementation 

Operation 

Maintenance 

• Installation 

• Help  Desk 

• IBM  maintenance 

• Connectivity 

• Software  conversion 

• Non-IBM  maintenance 

• Cabling 

• Monitoring 

• Business  recovery 

• Environmental 

• Automated  operations 

• Facilities  monitoring 

• Software  migration 

• Software  management 

Source:  INPUT 


on  a number  of  site  ele- 
ments that  influence  com- 
puter operations.  These 
checks  include  the  monitor- 
ing of  hardware,  software 
and  the  operational  envi- 
ronment. 

- IBM  provides  a variety  of 
automated  service  offerings. 
One  example  is  IBM 
Net  View,  which  provides  a 
complete  package  of  auto- 
mat^ network  manage- 
ment facilities. 

• "Maintenance"  service 
comprises  a range  of 
maintenance  and  non- 
maintenance services  as 
follows: 


- Traditional  maintenance 
services  include  the  war- 
ranty and  long-term  main- 
tenance of  IBM  equipment, 
and  also  the  maintenance  of 
non-IBM  equipment. 

- Business  recovery  services 
are  aimed  at  providing 
disaster  prevention  and 
disaster  recovery  facilities 
for  customers.  The  service 
offered  includes  contin- 
gency planning,  testing,  the 
allocation  of  standby  equip- 
ment at  either  a fixed  or 
mobile  site,  and  the  provi- 
sion of  alternative  sites. 

- Facilities  monitoring  ser- 
vices provide  continual  or 


regular  checks  on  the 
system  environment  and 
advice  on  preventive  or 
remedial  actions. 

- Software  management 
services  provide  the  cus- 
tomer with  the  capability  of 
implementinng  new  hard- 
ware and  software  func- 
tions and  provide  health 
checks  on  the  status  of  the 
system  and  software  main- 
tenance tools. 

This  brief  overview  of  the  key 
elements  of  the  service  offerings 
of  IBM  Customer  Service  is 
intended  to  provide  a measure 
of  the  extent  of  offerings 
available.  However,  the  full 


0 1991  by  INPUT.  Reprcxludlon  prohibited. 


INPUT 


October  1991 


Service  Update 


range  of  services  is  more 
comprehensive  and  it  is 
necessary  to  study  these  in 
depth  in  order  to  gain  a full 
understanding  of  the  level  of 
detail  they  contain. 

IBM  Services  in  Detail 

1.  Implementation  Services 

A listing  of  the  full  range  of 
services  offered  by  113M  UK 
Customer  Service  that  satisfy  the 
Implementation  phase  of  the 
business  cycle  is  provided  in 
Exhibit  C. 

The  following  explanation 
provides  a more  detailed 
description  of  IBM's 
implementation  services. 

Machine  Installation  and 
Relocation  Service  - This  service  is 
intended  to  cover  situations 
beyond  normal  installation 
requirements.  For  new  IBM 
products,  except  those 
designated  as  Customer  Set-Up 
(CSU),  installation  and 
associated  activities  are 
normally  included  in  the 
purchase  price.  These  activities 
usually  include  installation 
planning,  disposal  of  displaced 
IBM  equipment  and 
rearrangement  of  equipment 
into  the  new  configuration. 

Chargeable  service  for 
installation  applies  to: 

• Customers  who  require  IBM 
to  install  Customer  Set-Up 
(CSU)  equipment 

• Situations  requiring 
installation  or  relocation 
work  that  is  not  the  result  of 
purchasing  additional  new 
IBM  products 


• Installation  of  second-user 
IBM  equipment 

• The  movement  of  data 
processing  sites,  where  IBM 
will  take  full  responsibility 
for  relocation,  including 
transportation  if  required. 
IBM  and  non-IBM  equipment 
may  be  included. 

• Storage  of  equipment  for 
periods  of  up  to  60  days 
However,  IBM  does  not 
guarantee  the  confidentiality 
of  data  while  equipment  is  in 
storage  or  transit,  although  it 
states  that  all  reasonaable 
steps  will  be  taken  to  achieve 
confidentiality. 


Customised  Installation  Services  - 
The  objective  of  this  service  is  to 
provide  customers  with  a pre- 
configured and  pre-tested 
system  prior  to  final  installation 
The  criteria  are  that  the 
customer  must  have  taken 
ownership  of  the  equipment 
involved  prior  to  IBM 
performing  the  tasks  required. 
Basic  components  of  the  service 
are: 


5 

• Integration  and  customisation 
of  customers'  hardware  and 
software  into  an  agreed  end- 
user  configuration 

• System  and  pilot  testing  prior 
to  final  installation 

• Consolidating  and 
configuring  to  meet  staged 
product  deliveries 

• Pre-configuring  and  special 
packaging  of  units  to  allow 
connection  immediately  after 
unpacking 

• Complete  system  testing  to 
agreed  criteria 


Source:  INPUT 


• Operator  training 

Products  that  qualify  for  this 
service  include: 

• Processors  up  to  the  AS/4()0 
and  Enterprise  System/9370 

• IBM  Personal  Computer  and 
Personal  System/2  products 

Continued  on  next  page 


Exhibit  C 

Implementation  Services  Offered  by  IBM 


• Machine  Installation  and  Relocation  Service 

• Customised  Installation  Services 

• Connectivity  Services 

• Cabling  Design  and  Installation  Services 

• ANO/MVS  Implementation  Services 

• Environment  Health  Check  Service 


October  1991 


O 1901  1^  INPUT  ntj()fO(iuLllo(i  pioliIbhiKl 


INPUT 


Service  Update 


6 


• Teleprocessing  equipment 
and  communications 
controllers 

• Workstations  and  POS 
terminals 

The  service  can  include  non-IBM 
equipment,  and  software  can  be 
IBM,  IBM  approvetl,  aislomer 
written  or  purchased. 

In  general  terms,  this  is  a flexible 
service  that  can  be  structured  to 
meet  specific  customer  needs. 
Customers  can  also  take 
advantage  of  the  service  to  run  a 
pilot  system,  thus  avoiding  the 
risks  associated  with  running  a 
new  system  for  the  first  time  in  a 
live  environment. 

Examination  of  the  products 
that  qualify  for  the  IBM 
Customised  Installation  Service 
clearly  indicates  that  the  service 
is  primarily  focussed  on 
customers  implementing 
midrange  distributed  processing 
systems  and  networks. 

Connectivity  Services  - This 
offering  concerns  the  provision 
of  specialist  constancy,  design 
and  installation  services  for  IBM 
fibre  optic  cabling.  The  service 
is  aim^  at  customers  who  are 
designing  a new  building, 
installing  a new  system, 
expanding  a network  or  moving 
to  a new  location. 

Using  this  system  of  cabling, 

IBM  states  that  direct  channel 
connection  is  no  longer 
restricted  to  the  computer  room 
and  that  direct  channel 
connection  is  possible  in  up  to 
3-km  increments. 


IBM  claims  that  this  service  is  a 
complete  solution  to  customer 
needs.  Services  that  contribute 
to  this  complete  solution  are: 

• Consultancy,  available  from 
the  conceptual  phase 

• Complete  design  service 

• Fibre  optic  cabling  system 
design  for  new  and  old 
buildiiigs 

• Use  of  CAD  techniques  for 
cabling  system  design 

• Design  that  includes 
flexibility  to  accommodate 
planned  growth 

• Choice  of  IBM  or  IBM- 
supervised  installation 

• Installation  supervised  by 
experienced  IBM  project 
managers 

• IBM  technical  backup  and 
support 

• Contracts  that  are  flexible  and 
designed  to  suit  specific 
customer  requirements 

• A one-year  warranty  is 
provided  on  all  IBM  designed 
and  installed  cabling  systems 

Cabling  Design  and  Installation 
Services  - This  offering  concerns 
the  provision  of  services  related 
to  the  implementation  of  a 
structured  wiring  system  at  a 
customer's  site.  The  service 
includes  provision  of  standard 
data  outlets  in  all  work  areas, 
along  with  telephone  and  power 
connections. 


As  part  of  the  complete  package, 
IBM  will  provide  an  installation 
team  to  carry  out  the  physical 
installation  under  the 
supervision  of  an  installation 
controller.  In  cases  where 
physical  installation  is  not 
carried  out  by  IBM,  a design 
specification  is  provided  that 
contains  all  the  infonnation 
required  by  the  installer;  for 
example: 

• Full  specifications  for  cables, 
frames,  outlets  and  cable 
routing 

• Standards  of  workmanship, 
including  relevant  installation 
standards,  codes  of  practice, 
national  and  local  regulations 

• Listing  of  equipment  and 
materials  required  to 
complete  the  installation 

• Conceptual  cabling  design 
complete  with  wiring 
schematics 

• Cabling  schedules,  giving 
types,  routing,  termination 
addresses  and  estimated 
cable  lengths 

• Installation  of  tnmking, 
cabling  and  equipment  racks, 
with  marked  drawings 
showing  routes,  quantities 
and  the  physical  location  of 
outlets  and  racks 

If  required,  IBM  will  assume  a 
project  management  and 
consultancy  role  during 
installiition.  In  this  case,  IBM 
will  provide  training  for 
nominated  subcontractors. 

The  basic  elements  of  the  IBM 
Cable  Design  and  Installation 
services  comprise  the  following: 


INPUT 


© 1991  by  INPUT.  Reproduction  prohibited. 


October  1991 


Service  Update 


• Design  and  installation — a 
customised,  single-source 
service  to  design  and  install 
an  IBM  cabling  system 

• A one-year  warranty  on 
installation  by  IBM 

• An  IBM  structured  cabling 
system  providing  simple 
installation  for  multiple 
applications 

• Specialised  components;  for 
example,  one  simple  plug 
acting  as  both  male  and 
female  connection,  and  when 
combined  with  a faceplate 
also  acting  as  a wall  socket 

• Elimination  of  multiple 
wiring;  the  IBM  cabling 
system  is  an  alternative  to 
coaxial,  twinaxial,  twisted 
pair  and  other  specialised 
cabling 

• Improved  connectivity, 
providing  multiple 
configuration  options — for 
example,  chain,  ring,  star  and 
mixed  systems.  Further,  the 
system  allows  progressive 
migration  to  an  IBM  Token- 
Ring  Network. 

ANO/MVS  Implementation 
Services  - This  service  offering 
provides  IBM  expertise  to 
customers  who  require 
implementation  of  IBM 
Automated  Network 
Operations/ MVS  (ANO/ 

MVS) — a Licensed  Programme. 

The  service  is  intended  to  ensure 
a smooth  and  successful 
installation  of  ANO/MVS,  and 
includes: 

• A pre-installation  meeting  at 
the  start  of  the  project.  The 
purpose  of  this  meeting  is  for 


IBM  to  explain  what  actions 
are  necessary  prior  to 
installation  and  to  devise  a 
schedule  for  the  various 
stages  of  implementation/ 
installation. 

• A further  review  takes  place 
prior  to  the  start  of  on-site 
activities,  to  ensure  that 
customer  requirements  are 
correctly  defined. 

• IBM  staff  will  carry  out  the 
installation  of  IBM  NetView, 
if  this  is  not  already  installed, 
and  ANO/MVS.  These 
products  are  then  customised 
to  achieve  the  objectives 
defined  and  agreed  upon  at 
the  planning  sessions. 

• Following  a thorough  testing 
of  the  new  installation,  IBM 
will  then  train  the  customer's 
network  operators  and 
systems  programmers  to  use 
ANO/MVS  in  their  own 
environment.  This  training 
includes  hands-on  practical 
experience  and  instruction  on 
how  to  use  the  newly 
installed  facilities. 

Environmental  Health  Check 
Service  - This  service  is  aimed  at 
providing  customers  with 
confidence  that  the  environment 
of  their  computer  room  meets 
the  standards  required  for 
trouble-free  operations  and 
safety.  The  service  comprises 
on-site  checks  that  are  normally 
completed  within  one  day;  to 
ensure  that  measurements  are 
realistic,  checks  can  be  carried 
out  under  live  operating 
conditions.  The  process  of 
carrying  out  environmental 
checks  is  claimed  by  IBM  to  be 
non-disruptive  to  the  customer's 
normal  computer  operations. 


7 

On-site  checks  carried  out  cover 
the  following  areas: 

• Room  temperature  and 
humidity 

• Floor  resistance 

• Pedestal-to-pedestal 
resistance 

• Power  supply  voltages,  50  Hz 
and  400  Hz  supplies 

• System  earthing 

• Chilled  water  cooling  systems 

• Other  areas  specific  to 
individual  sites 

Checks  can  be  carried  out  at 
intervals  defined  by  an  agreed 
schedule  or  on  an  "as  required" 
basis. 

Following  completion  of  the 
checks  IBM  will: 

• Provide  the  customer  with  a 
comprehensive  report 

• Advise  the  customer  of 
existing  problems  and  how  to 
achieve  their  elimination  or 
control 

• Identify  potential  future 
problem  areas 

• Advise  the  customer  of  the 
impact  of  the  planned 
changes  on  the  computer 
room  environment 

• Provide,  if  required, 
additional  services  to  co- 
ordinate remedial  or 
preventive  actions 


Continued  on  next  page 


October  1991 


O 1991  by  INPUT.  Reproduction  prohibited 


INPUT 


Service  Update 


8 

IBM.  . .from  page  1 
2.  Operational  Services 

Exhibit  D provides  a listing  of 
the  full  range  of  operational 
services  available  from  IBM 
Customer  Service  in  the  U.K. 

A more  detailed  description  of 
these  services  is  provided  in  the 
following  explanation. 

CICS  Application  Migration 
Service  (CICS/AMS)  - IBM 
Customer  Service  has 
introduced  a service  for  CICS 
customers  aimed  at  enhancing 
application  reliability  and 
compatibility.  This  specific 
service  provides  assistance  to 
customers  in  the  conversion  of 
applications  from  the  macro 
level  to  the  more  strategic 
command  level  interface. 
Additionally,  migration  to  IBM 
CICS/ESA  Version  3 requires 
use  of  the  command-level 
interface. 

The  objective  of  the  IBM  CICS 
Application  Migration  Service 
(CICS/AMS)  is  to  simplify  the 
process  and  reduce  the 
workload  for  the  customer 
involved  in  the  conversion 
exercise.  Included  in  the  service 
is  off-site  processing  of 
applications  and  an  on-site 
fe^back  session  with  the 
customer. 

Applications  source  code, 
written  in  Assembler  or  COBOL, 
is  sent  to  IBM  on  tape  or 
cartridge.  This  source  code  is 
then  processed  by  the  CICS 
Application  Migration  Aid 
(CICS/AMA),  an  IBM  Licensed 
Programme  that  performs  some 
conversion  to  the  command- 
level  interface.  Simple  macros 


Exhibit  D 

Operational  Services  Offered  by  IBM 


• Help-Desk  Service 

• CICS  Application  Migration  Service  (CICS/AMS) 

• Software  Conversion  Service  - ACF2  to  RACF 

• Automated  Network  and  Automated  Console 
Operations  Service 

• Change  Delivery  and  Implementation  Manager 

• IBM  Support  Network 

Source:  INPUT 


are  fully  converted  and  require 
no  further  attention. 

The  use  of  CICS/ AM  A allows 
only  partial  conversion  of 
complex  macros.  Therefore, 
after  the  customer's 
programmes  have  been 
processed,  the  IBM  Software 
Services  Engineer  returns  them 
and  conducts  the  feedback 
session  with  the  customer. 
During  this  feedback  session  the 
extent  of  automatic  conversion 
and  how  to  interpretate  CICS/ 
AMA  output  is  explained.  Also, 
detailed  instructions  are 
provided  to  allow  the  customer 
to  complete  the  conversion  from 
detailed  knowledge  of  the 
application  and  its  design. 

IBM  claims  that  this  service 
provides  customers  with  the 
functionality  of  CICS/AMA 
without  installation  and 
operational  overheads.  Also, 
providing  access  to  command- 
level  programmes  offers 
increased  functionality  and 
relief  from  virtual  storage 
constraints. 


Software  Conversion  Service  - 
ACF2  to  RACF  - This  service 
gives  customers  the  opportunity 
to  improve  the  security  of  their 
computer  systems  by  migrating 
from  ACF2  to  RACF.  This  IBM 
Software  Conversion  Service 
consists  of  an  initial  positioning 
review,  the  migration  of  ACF2 
operation  to  RACF  format,  and 
the  ability  to  run  RACF 
alongside  ACF2.  Also, 
additional  modules  can  be 
customised  and  IBM  will 
provide  customer  staff  training 
and  conduct  a post-conversion 
review. 

The  essential  focus  of  the  service 
provides: 

• A review  of  the  existing 
security  system, 
concentrating  on  the 
auditing,  administration  and 
technical  implementation  of 
current  security  software. 

The  customer's  future  plans 
are  also  taken  into  account  to 
ensure  investment  protection. 
At  this  stage  an  "RACF 
positioning  and  conversion 
report"  is  produced  which 


INPUT 


C 1991  by  INPUT.  Reproduction  prohibited. 


October  1991 


Service  Update 


fomis  the  base  document  for 
delivering  the  rest  of  the 
service;  this  report  is  also 
used  for  the  optional  resource 
module. 

• A migration  aid  facility  to 
translate  ACF2  rules  to  RACF 
commands,  including  the 
training  of  customer  staff  in 
its  use.  This  facility  can  be 
used  any  number  of  times  on 
the  designated  system  and 
any  problems  experienced  in 
its  use  will  be  supported  by 
the  IBM  Software  Support 
Centre. 

• A co-existence  facility  allows 
RACF  and  ACF2  to  run 
alongside  each  other,  a 
requirement  of  which  is  that 
MVS  be  installed  in  the  target 
system.  I'he  co-existence 
facility  allows  ACF2  and 
RACF  to  co-exist  on  the  same 
system  in  the  following 
modes: 

- ACF2  makes  security 
decisions  and  RACF  reports 
on  its  intended  actions 

- RACF  makes  security 
decisions  and  ACF2  re- 
mains on  the  system,  but  in 
quiet  mode 

The  capability  for  co-existence 
between  RACF  and  ACF2 
ensures  adequate  testing,  fine 
tuning  and  password 
conversion  while  maintaining 
user  transparency  during  the 
conversion  phase. 

Following  completion  of  the 
conversion,  a post-conversion 
review  is  conducted  with  the 
customer  to  verify  the  health  of 
the  customer's  IT  security 
disciplines. 


October  1991 


Automated  Network  Operations 
and  Automated  Console  Operations 
Service  - The  objective  of  this 
service  is  twofold: 

• Automatic  Network 
Operations  (ANO)  provides 
access  to  IBM  NetView, 
which  allows  customers' 
network  operators  a facility 
for  automated  operation  of 
network  problem 
determination  and  help-desk 
facilities. 

• Automated  Console 
Operations  (ACO)  provides 
automated  subsystem 
initialisation  and  tennination, 
resource  monitoring  and 
recovery. 

Both  of  these  service  offerings 
provide  for  full  aistomised 
installation  of  IBM  NetView  and 
customer-selected  automation 
facilities,  as  well  as  on-site 
training  for  operators  and 
systems  programmers. 

The  automated  help  desk,  part 
of  the  Automated  Network 
Operations  Service,  can  be 
customised  to  include  diagnostic 
or  preventive  measures  unique 
to  the  customer's  network. 

The  Automated  Console 
Operations  service  is  claimed  by 
IBM  to  improve  operator 
productivity,  reduce  operational 
complexity,  improve  system 
availability  and  provide  better 
system  control.  The  service 
provided  by  IBM  includes 
planning,  installation,  customer 
training  and  support. 

Automated  facilities  provided 
by  the  installation  of  Automated 
Console  Operations  include: 

• Message  suppression 


O 1991  by  INPUT.  Reproduction  prohibited 


9 

• Subsystem  initialisation  and 
termination 

• System  and  subsystem 
resource  monitoring 

• Subsystem  resource  recovery 

IBM  provides  a single  point  of 
contact  for  remote  telephone 
support  for  90  days  following 
completion  of  on-site  services. 

A summary  of  the  major 
elements  of  these  IBM  Network 
services  is  as  follows: 

• Customised  network 
automation  facilities 

• IBM  NetView  iivitallation, 
customisation  and  testing 

• On-site  training  and 
implementation  planning 

• Error  identification  and 
diagnostics 

• Automated  help  desk 

• Ninety-day  remote  assistance 
and  technical  support 

3.  "Maintenance"  Services 

IBM  uses  the  term 
"maintenance"  to  describe 
services  related  to  maintaining 
availability  of  the  customer's 
system.  These  services  include 
traditional  hardware 
maintenance  services  and  a 
range  of  non-maintenance 
services.  Exhibit  E provides  a 
listing  of  the  services  that  IBM 
provides  under  the  heading  of 
"maintenance"  and  a more 
detailed  explanation  of  these 
service  offerings  is  provided  in 
the  following  descriptions. 

Continued  on  ru’xl  pane 

INPUT 


10 


IBM.  . .from  page  9 

Maintenance  Services  - The  IBM 
System  Service  Agreement 
(SSA)  is  aimed  at  providing 
customers  with  a flexible 
approach  to  equipment 
maintenance.  Customers  may 
choose  to  extend  maintenance 
coverage  to  three,  four  or  five 
years,  and  by  making  payment 
in  advance  have  the  opportunity 
to  reduce  costs  considerably. 
Under  the  terms  of  the  System 
Service  Agreement,  which  is 
restricted  to  IBM  products, 
customers  can  select  the  type  of 
service  and  the  hours  of 
coverage  required. 

The  IBM  Service  Agreement 
provides  for  coverage  in  the 
form  of  a Total  System 
Agreement  subject  to  the  system 
containing  a complete 
qualifying  processor 
configuration.  In  this  case  the 
agreement  can  cover  all  directly 
attached  IBM  equipment 
including  the  IBM  PC  and 
Personal  Systems  ranges. 
Qualifying  processors  for  the 
Total  Systems  Agreement  are: 

• AS/400 

• System/38  5363 

• Enterprise  System /9370 

• Enterprise  System/9000  9221 

• IBM  RISC  Syi,tem/6000 

• IBM  Com  300 

Under  the  System  Service 
Agreement,  payments  made  by 
customers  cover  parts,  labour, 
technical  and  management 
support.  An  annual  hardware 
and  software  system  review  is 
also  provided  for  all  systems 
covered  by  the  agreement,  and 
customers  can  receive  training 
and  assistance  in  the  use  of  the 


Electronic  Customer  Support 
facility,  if  this  feature  is  fitted  to 
their  system. 


Monday  to  Friday.  Extended 
hours  of  coverage  are 
available,  and  coverage  can 


Exhibit  E 

“Maintenance”  Services  Offered  by  IBM 

— 

• Maintenance  Services 

• Non-IBM  Add-In  Service  for  IBM  PCs 

• Business  Recovery  Centre  Service 

• Mobile  Business  Recovery  Service 

• Business  Recovery  Service  Enhancements 

• SiteView  Services 

• Uninterruptible  Power  Supply  Service 

• MVS  Express/ProductPac/ServicePac 

• MVS  Software  Management  Service 

• MVS  Operational  Exception  Service 

• VSE  Software  Management  Service 

• Equipment  Collection  Service 

Source:  INPUT 


Customer  options  provided  by 
the  IBM  System  Service 
Agreement  include: 

• The  term  of  the  agreement 
ranges  from  three  to  five 
years  from  system  installation 
date,  or  from  the  start  date  of 
the  agreement. 

• The  type  of  service  required 
niay  be  chosen  by  the 
customer  depending  on  the 
applicable  types  of  service  for 
each  machine  included  in  the 
agreement. 

• Basic  hours  of  coverage  are 
from  8.00  to  19.00  hours. 


be  extended  individually  for 
each  machine  in  the 
configuration  or  can  be 
extended  to  cover  the 
complete  system. 

• All  additions,  model  changes 
and  features  added  to  the 
customer's  system  may  be 
automatically  included  under 
the  terms  of  the  agreement. 
Additional  charges  may  be 
made  for  additions  based  on 
the  outstanding  term  of  the 
agreement. 

• If  ownership  of  the  system 
changes,  the  System  Service 
Agreement  may  be  assigned 


INPUT 


C 1991  by  INPUT.  Reproduction  prohibited. 


October  1991 


Service  Update 


lo  the  new  owner.  This 
transfer  facility  is  restricted  to 
customers  within  the  U.K. 
and  is  subject  to  prior  written 
consent  from  IBM. 

• The  single  charge  for  the 
agreement  is  payable  within 
30  days  of  processor 
installation  or  agreement  start 
date  and  takes  account  of  any 
warranty  periods  that  apply. 
Once  this  charge  is  paid  in 
advance  for  the  complete 
term  of  the  agreement,  the 
customer  is  fully  protected 
against  any  maintenance 
price  increases  related  to 
products  included  in  the 
agreement. 

• Charges  may  be  included  in 
an  IBM  Total  System  Lease, 
along  with  the  purchase  price 
of  the  hardware  and  software 
elements  of  the  customer's 
system. 

• Cancellation  of  the  agreement 
can  be  made  after  the 
agreement  has  been  in  force 
for  at  least  12  months. 
Termination  can  be  achieved 
by  giving  IBM  three  months' 
notice  in  writing;  any  unuscHl 
portion  of  the  agreement  will 
be  refunded  less  any 
applicable  tennination 
charges. 

Non-IBM  Add-In  Service  - This 
service  is  offered  by  IBM  in 
recognition  of  the  wide  range  of 
add-ins,  available  from  a wide 
range  of  manufacturers,  for  IBM 
personal  computer  systems  and 
the  problems  that  these 
additions  can  cause  for 
customers  if  problems  or 
failures  occur.  The  service  is 
aimed  specifically  at  the  range 
of  non-IBM  add-in  memory 

October  1991 


cards,  adaptor  cards,  emulation 
cards,  hard  disks  and  power 
supplies. 

Within  the  context  of  this 
service,  IBM  Customer  Service 
will  identify  the  specific  failing 
non-IBM  product  and  offer  a 
replacement  to  solve  the 
problem.  Although  IBM  admits 
that  it  cannot  guarantee  to 
replace  all  non-IBM  add-ins  due 
to  the  wide  range  available,  it 
does  offer  the  service  for 
commercially  available  non-IBM 
add-ins  for  specific  products. 
These  products  are: 

• IBM  Personal  Computer  AT 

• IBM  Personal  Computer  XT 

• IBM  Personal  System/2 

Further,  if  the  failing  non-IBM 
add-in  item  is  not  commercially 
available,  IBM  will  endeavour  to 
suggest  a functionally 
equivalent  item. 

The  service  is  available  through 
the  IBM  Customer  Service  U.K.- 
wide network  of  service  points 
or,  where  applicable,  it  can  be 
complementary  to  an  IBM  on- 
site Maintenance  Agreement. 

Charges  for  replacement  non- 
IBM  parts  are  based  on 
individual  quotations;  non-IBM 
parts  fitted  to  the  aistomePs 
equipment  are  covered  by 
warranty  for  90  days. 

Other  essential  features  of  the 
Non-IBM  Add-In  Service  are: 

• Single  local  telephone 
number  for  all  hardware 
service  calls 

• Fixed  labour  charge  for 
diagnostic  and  replacement 


© 1991  b/  INPUT  Reproduaion  pfohibilud 


11 

work  carried  out  by  an  IBM 
Servicepoint 

• Provision  of  price  quotations 
and  estimated  delivery  times 
for  non- IBM  replacements 
before  work  begins 

Business  Recovery  Centre  Service  - 
This  service  provides  customers 
with  access  to  an  IBM  Recovery 
Centre  in  the  event  of  a disaster 
occurring  at  the  customer's 
computer  site.  In  addition  to 
providing  a recovery  site,  IBM 
provides  a range  of  services  to 
aid  customer  planning,  testing 
and  recovery  procedures. 

The  service  provided  by  IBM 
comprises  three  key  modules: 

• Planning — Involves  seminars 
for  customer  senior 
management  to  raise 
awareness  levels  and  examine 
the  potential  impact  of  a 
computer-site  disaster  on  the 
customer's  business.  An 
essential  element  of  this  part 
of  the  service  is  the  provision 
of  a Business  Recovery 
Planning  Workshop  Service, 
the  aim  of  which  is  to 
produce  a plan.  One  major 
objective  of  this  plan  is  to 
identify  the  key  applications 
that  are  critical  to  the  survival 
of  the  customer's  business. 

The  workshop  is  also  usc\i  to 
identify  hardware,  software 
and  network  requirements, 
key  personnel  and  support, 
and  to  produce  a plan  for 
Business  Recovery  Centre 
Service  facilities  and  their 
use.  At  completion,  an  IBM 
certified  Business  Recovery 
Plan  will  have  been 
developed.  IBM  claims  that 
some  insurance  companies 

Continued  on  next  page 

INPUT 


Service  Update 


12 

IBM.  . .from  page  II 

are  prepared  to  offer 
attractive  premiums  to  clients 
with  certified  IBM  Business 
Recovery  Plans.  In  addition, 
IBM  will  provide  training  for 
the  customer's  staff  in 
business  recovery  procedures 
and  principles. 

• Testing — At  this  stage  the  key 
activity  is  to  test  the 
procedures  developed  by  the 
Business  Recovery  Plan  and 
familiarise  the  customer's 
staff  with  implementation  of 
the  plan.  To  test,  two  shifts 
are  available  providing 
coverage  between  8.00  hours 
and  24.00  hours  each  week 
day.  At  the  end  of  the  test,  an 
IBM  observer  provides  a full 
report,  giving  feedback  and 
suggesting  enhancements  to 
the  plan.  Additional  services 
available  at  this  stage  include: 

- Remote  operations  bridge, 
if  more  convenient 

- Network  support 

- Readiness  review  for 
second  and  subsequent 
years  to  update  the  plan 

• Recovery — Immediately 
following  a call  from  a 
customer  notifying  IBM  that  a 
disaster  has  happened,  the 
IBM  Business  Recovery 
Centre  will  be  prepared  to 
receive  the  customer. 

Facilities  are  available  24 
hours  per  day.  The 
customer's  contract  provides 
for  selection  between  two 
options  in  the  event  of  a 
disaster  occurring: 


- A 31-day  contract  includes 
use  of  recovery  centre 
facilities  for  31  days  at  no 
extra  charge,  with  extension 
available  for  a further  30 
days  on  a daily  fee  basis. 

- A daily  contract  provides 
access  to  the  recovery  centre 
for  up  to  61  days  on  the 
basis  of  a daily  fee. 

The  IBM  Business  Recovery 
Centre  Service  is  claimed  to 
support  very  large 
configurations  and  provide  a 
flexible  network  service. 

Mobile  Business  Recovery  Service  - 
This  service  is  aimed  at 
providing  AS/400  users  with  a 
mobile  alternative  to  a fixed-site 
recovery  service.  The  service 
provid^  by  IBM  includes 
planning  and  consultancy  to 
ensure  that  procedures  to  cover 
disasters  are  defined  and 
implemented.  Following 
completion  of  the  planning 
phase  a customer  is  provided 
with  up  to  two  days  of  on-site 
testing,  followed  by  an  annual 
test  of  the  procedures  and 
facilities. 

The  IBM  Mobile  Business 
Recovery  Unit  is  a self- 
contain^,  fully  configured  AS/ 
400  with  associated  input/ 
output  devices  and  up  to  12 
workstations.  Upon  arrival  at 
the  chosen  site,  attachment  to  an 
available  power  source  can  be 
made  or,  alternatively,  a power 
source  can  be  provided.  The  on- 
board Uninterruptible  Power 
Supply  provides  protection  from 
power  disturbances  and 
outages.  The  design  of  the 
mobile  unit  includes  access 
ports  for  connection  to 
remaining  local-area  networks 
and  wider  connectivity. 


The  environment  of  the  mobile 
unit  is  fully  controlled  with  IBM 
NetView  monitoring  where 
applicable. 

The  unit  will  remain  on  the 
chosen  recovery  site  until  the 
customer's  computing  facilities 
are  fully  independent.  IBM 
considers  that  this  period  would 
normally  be  within  seven  days 
for  hardware  or  software 
facilities,  or  30  days  for  more 
serious  disasters.  This  period 
can  be  extended  for  an 
additional  charge. 

Even  though  this  Mobile 
Business  Recovery  Service  is 
primarily  aimed  at  AS/400 
customers,  IBM  claims  that  it 
may  be  possible  for  other 
systems  users  to  be 
accommodated.  This  additional 
capability  applies  where 
migration  from  other  systems  to 
an  AS/400  can  be  practically 
included  as  part  of  the  recovery 
plan. 

Business  Recovery  Service 
Enhancements  - In  addition  to  the 
previous  two  disaster  recovery 
services  discussed,  IBM  also 
provides  two  enhancements  to 
these  services: 

• Relocatable  disaster  recovery 
facilities — In  the  event  of  a 
major  disaster,  IBM  can 
arrange  delivery  and  erection 
of  a complete  computer  room 
at  the  customer's  chosen  site. 
Modular  units  can  be 
delivered  and  erected  in  a 
matter  of  days  to  provide  a 
safe  and  secure  computer 
environment.  As  a 
permanent  facility,  these 
modular  structures  will 
handle  the  full  IBM  processor 
range,  including  the  3090 


INPUT 


O 1991  by  INPUT.  Reproduction  problbNed. 


October  1991 


Service  Update 


product  family.  Facilities 
provided  include  raised 
flooring,  suspended  ceilings, 
air  conditioning,  and  full 
power  facilities  including  a 
generator  if  required. 
Availability  of  the  facility  is 
for  up  to  two  years  with 
optional  extension  for  a 
further  two  months. 

• Fixed  disaster  recovery 
centre — This  centre  is  based 
in  South  London  and  offers 
comprehensive  computer  and 
office  facilities.  The  centre 
provides  approximately  6,000 
square  feet  of  dedicated  open 
plan  computer  room  space 
with  an  additional  2,000 
square  feet  of  office  space. 

The  main  computer  room  has 
facilities  to  accommodate 
large  mainframe 
configurations  including 
power  distribution,  air 
conditioning,  water  chilling 
and  power  frequency 
conversion.  For  example,  400 
KVA  of  dedicated  computer 
power  supply  is  available  and 
fifty  13-amp  double  sockets 
are  located  throughout  the 
computer  room  and  office 
area.  Forty  telephone  lines 
are  installed  for  voice,  data  or 
fax  communications,  and  a 
32-line  switchboard  is 
connected  for  immediate  use. 
Use  of  the  centre  is  normally 
for  a period  of  up  to  nine 
months,  with  an  option  for 
the  customer  to  negotiate  a 
further  three  months  for  an 
additional  charge. 

SiteView  Services  - In  providing 
this  service  offering,  IBM 
provides  customers  with  an 
environmental  site  monitoring 
facility.  Environmental 
conditions  on  the  customer's 


October  1991 


computer  site  can  be  monitored 
through  optionally  available 
Robertshaw  Intelligent  Building 
System  sensors  with  monitoring 
facilities  covering  heating, 
ventilation,  air  conditioning, 
lighting,  power  and  security 
systems. 

The  transaction  and  application 
monitoring  is  carried  out  via  an 
IBM  3270  interface  to  a 
programme  developed  by  IBM 
in  conjunction  with  the 
aistomeTs  operations  staff. 

Whenever  an  environmental 
threshold  is  exceeded,  or  if  there 
is  an  unexpected  result  from  the 
transaction  and  application 
monitoring,  an  automatic  "alert" 
message  is  sent  to  the  IBM 
SiteView  Monitoring  Centre. 
This  centre  is  located  at  an  IBM 
location  and  is  staffed  24  hours 
per  day. 

Following  an  alert,  IBM  will 
automatically  notify  nominated 
customer  contacts  via  message 
pagers. 

IBM  SiteView  Automation 
Monitoring  enables  the 
customer  to  extend  the  service  to 
high-activity  MVS-based 
systems.  Using  this  service 
provides  for  the  monitoring  of 
networks,  transactions  and 
applications;  alerts  from  any 
source  can  be  handled  by  the 
system. 

Uninterruptible  Pmver  Suppli/ 
Service  - This  service  provides  a 
source  of  uninterruptible  power 
to  AS/ 400  users.  The  service 
offered  by  IBM  includes: 

• Consultancy — Advice  on  the 
most  appropriate  unit  based 
on  the  customer's  current 


C 1991  by  INPUT.  Reprodudlon  prohibited. 


13 

AS/400  configuration  and 
planned  growth 

• Delivery  to  anywhere  within 
the  U.K.  at  no  extra  charge 

• Installation 

• Commissioning — Including  a 
full  test  of  the  customer's 
system  and  the  installed 
power  supply 

• Warranty — Provided  for  a 
period  of  twelve  months  with 
an  option  to  extend  this  for  an 
additional  period  of  two 
years 

IBM  offers  a range  of 
uninterruptible  power  supplies 
extending  from  6 KVA  up  to  100 
KVA  ratings. 

MVSIExpress,  MVS/ProductPac, 
MVSjServicePac  - With  this 
service,  IBM  provides  three 
software  offerings  designed  to 
ensure  that  MVS  software  is 
quickly  installed  and  easily 
maintained. 

MVS/Express  allows  customers 
who  need  a basic  MVS  operating 
system  installed  quickly  to  have 
it  installed  in  one  day.  The  basis 
of  this  service  is  a pre-generated 
and  tested  MVS  system  with  the 
IBM  Licensed  Programmes 
already  installed.  Installation  is 
carried  out  at  the  customer's  site 
by  an  IBM  Programme  Support 
Representative  and  includes  full 
testing  and  verification. 

All  products  available  in  IBM/ 
CBIPO,  plus  IBM  CIS  and  IMS, 
are  supported  by  MVS  Express. 

MVS/ProductPac  is  a software 
package  in  which  the 
installation  procedures  and 

Continued  on  next  page 

INPUT 


Service  Update 


14 

IBM.  . .from  page  13 

documentation  have  been 
specifically  customised  to  match 
a customer's  system.  The 
service  includes  all  the 
machine-readable  material 
required  to  install  selected  IBM 
Licensed  Programmes  and  their 
maintenance.  Also  included  are 
fully  updated  technical  changes. 
Programme  Temporary  Fixes 
(PTF's)  and  the  latest  Preventive 
Service  Planning  (PSP).  MVS/ 
ProductPac  comes  complete 
with  an  individually  produced 
step-by-step  installation  guide 
which  consolidates  all  the 
information  required  by 
individual  customers. 

MVS/ServicePac  is  a software 
package  developed  by  IBM  to 
anticipate  and  correct  potential 
software  problems  before  they 
arise.  The  service  consists  of  a 
package  of  Programme 
Temporary  Fixes  and 
installation  procedures  that  are 
based  on  information  collected 
through  IBM's  worldwide 
communications  network  and 
database,  which  logs  all 
customer  software  problems 
and  their  solutions.  IBM 
personnel  use  this  information, 
in  conjunction  with  data 
supplied  by  the  customer,  to 
create  the  appropriate  level  of 
software  maintenance  for  a 
specific  customer  system. 

MVS  Software  Management 
Service  - This  service  provides  a 
flexible  software  management 
system  customised  to  meet  the 
requirements  of  individual 
customers.  Customising  takes 
into  account: 

• Current  service  level 

• System  software  complexity 


• Current  system  management 

• System  modifications 

• Customer's  support  staff 

In  providing  the  service,  IBM 
has  developed  three  levels  of 
service  for  customers. 

• Basic  Service 

- Customised  service  to 
achieve  and  maintain  the 
ideal  service  level 

- Follow-up  customer  re- 
views 

• Enhanced  Service 

- Includes  Basic  Service 

- Provides  user  monitoring 
for  potentially  critical  errors 

- Packaged  Corrections 
Service  for  which  electronic 
delivery  may  be  used 

• Enhanced  Service  Plus 

- Includes  Enhanced  Services 

- On-site  installation  of  all 
provided  service  updates 

MVS  Operational  Exception 
Service  - IBM  has  developed  this 
service  to  allow  customers  to 
monitor  the  key  operational 
elements  of  an  MVS  system. 

The  product  on  which  this 
service  is  based  is  OPEX,  a 
product  originally  developed  by 
IBM  for  in-house  use. 

The  service  provided  by  IBM 
includes  training  the  customer's 
staff  in  the  use  and  support  of 
OPEX  programmes, 
documentation,  and  assistance 
with  the  installation  of  OPEX. 
Installation  can  be  achieved  in 
one  day. 

The  essential  elements  of  the 
service  are  as  follows: 

• Only  monitored  exceptions 
and  relevant  information  are 
displayed. 


• OPEX  interprets  information 
before  it  is  displayed. 

• Monitoring  consoles  can  be 
consolidated  if  used  in 
conjunction  with  IBM 
NetView. 

• Early  warnings  enable  pre- 
emptive action. 

• Responses  can  be  automated 
if  used  with  products  such  as 
IBM  NetView. 

• Ongoing  support  is  provided 
by  IBM's  Software  Support 
Centre. 

• Simple  customisation  is 
provided. 

VSE  Software  Management 
Service  - This  IBM  service  is 
aimed  at  assisting  customers  in 
keeping  their  VSE  software 
fully  up  to  date.  In  developing 
the  service,  IBM  adopted  a 
flexible  approach  allowing 
customers  a number  of  options. 
For  example,  customer  choices 
include: 

• The  number  of  products  to 
be  included  in  the  service 

• The  type  of  service  required, 
for  example: 

- Refreshing  VSE  software  to 
include  recent  fixes 

- Updating  to  a new  version 

- Refreshing  and  updating, 
plus  the  installation  of  new 
IBM  licensed  programmes 

- Installing  a VSE  system  on 
a new  processor 

The  standard  service  includes  a 
visit  to  the  customer's  site  and 


INPUT 


0 1991  by  INPUT.  Reproduction  prohibited. 


October  1991 


Service  Update 


the  installation  of  a VSE  system, 
containing  recent  preventive 
maintenance,  twice  per  year. 
Work  is  carried  out  during 
normal  working  hours. 

Enhancements  to  the  standard 
service — for  example,  visits 
outside  normal  working  hours — 
are  negotiable. 

Equipnu’tit  Colleclion  Service  - In 
addition  to  the  range  of  services 
previously  discussed,  113M  also 
offers  an  Equipment  Collection 
Service  (ECO)  that  provides  for 
the  environmentally  friendly 
disposal  of  IBM  products,  parts 
or  supplies  that  have  reached 
the  end  of  their  productive  life 
cycle. 

This  service  applies  to  all 
owners  of  IBM  products,  parts 
or  supplies. 


In  Conclusion 

To  conclude  this  somewhat 
lengthy  and  detailed  two-part 
profile  of  IBM  UK  Customer 
Service,  it  is  appropriate  for 
INPUT  to  summarise  and 
comment  on  the  key  points  that 
emerge.  The  key  achievements 
of  IBM  can  be  outlined  as 
follows: 

• Commitment  to  quality 

• Recognition  of  customer 
needs 

• Development  of  a wide  range 
of  services 

• Understanding  of  the  need 
for  flexibility 


October  1991 


IBM's  stated  commitment  to 
quality  is  demonstrated  in  many 
areas.  Firstly,  as  an  early 
qualifier  for  BS  5750/ISO  9001 
certification,  achieved  in  1987, 
and  more  recently, 
companywide  certification  to 
this  quality  standard.  INPUT 
contends  that  this  level  of  visible 
commitment  to  quality  is  a clear 
indication  of  intent. 

Commitment  to  cjualily  is  one 
aspect,  but  that  commitment 
needs  to  be  demonstrated  by 
measurable  results.  By 
implementing  the  REFLEX 
programme,  IBM  has  provided  a 
platform  for  measurable  quality 
to  be  achieved  and  also  for 
quality  performance  to  be 
recognised.  INPUT  considers 
that  achievement  of  a satisfied 
aistomer  base  is  a good 
foundation  on  which  to  build 
ongoing  relationships  with 
customers. 

The  success  of  the  REFLEX 
programme  should  not  be 
underestimated.  In  just  nine 
months  from  the 
implementation  of  REFLEX,  the 
percentage  of  dissatisfied 
customers  has  been  reduced 
from  6.5%  to  2.2%.  Further,  the 
level  of  success  achieved  by 
REFLEX  has  exceeded  IBM's 
targets  by  a relatively 
substantial  margin — the  original 
target  was  to  achieve  a level  of 
3%  by  the  end  of  1991.  The 
degree  of  success  achieved  by 
IBM  is  encouraging  and  inspires 
confidence  that  it  is  committed 
to  achieving  its  goal  of  zero 
defects. 

A second  IBM  goal,  stated  in 
Part  1 of  the  profile,  was  to 
become  a services  company. 

The  success  that  IBM  UK  has 


C 1991  by  INPUT  Reproduction  prohibilod. 


15 

achieved  is  highlighted  by  the 
range  of  services  now  offered  by 
the  Customer  Service 
organisation.  However, 
structuring  a wide  range  of 
services  is  just  one  aspect;  a 
more  important  factor  is  that 
these  services  address  a 
customer  need.  Further,  the 
service  offerings  need  to  include 
elements  of  flexibility  to  match 
the  requirements  of  individual 
customers. 

The  first  point  to  note  is  that 
most  of  the  services  offered  by 
IBM  UK  Customer  Service 
contain  the  important  element  of 
flexibility.  Study  of  the  service 
offerings  will  highlight  the 
potential  for  customisation  to 
meet  the  requirements  of 
specific  customers.  One 
example  of  this  approach  is 
prov^  by  the  Help-Desk 
Service,  which  can  be 
customised  to  include  diagnostic 
and  preventive  aids. 

The  second  point  to  note  is  that 
most  of  the  services  offered 
provide  customers  with  an 
opportunity  to  reduce  the 
burden  of  administrative  and 
housekeeping  activities 
associated  with  nmning 
computer  operations.  In 
providing  this  type  of  service, 

IBM  has  recognised  that 
customers  are  becoming 
increasingly  interested  in  the 
provision  of  information,  but 
less  interested  in  the  mechanics 
of  computer  operations. 

Important  examples  of  IBM's 
activities  in  this  area  are  the 
services  that  provide  site/ 
system  monitoring,  software 
installation,  software 
maintenance  and  system 
security. 

Continued  on  next  page 

INPUT 


Service  Update 


Granada  Update 

Granada  Computer  Services 
Announces  More  Successes... 
and  More  Changes 


16 

IBM.  . .from  page  15 

However,  there  is  one  specific 
service  offered  by  IBM  that 
clearly  addresses  a key  customer 
need — the  provision  of  disaster 
prevention  and  recovery 
services.  Until  about  two  years 
ago,  equipment  vendors,  with 
the  exception  of  Hewlett- 
Packard,  were  noticeable  by 
their  absence  in  this  sector  of  the 
service  market.  This  absence 
was,  in  INPUT'S  opinion,  a 
failure  to  recognise  customer 
needs  and  resulted  in  leaving 
aistomers  exposed  to 
unnecessary  risks. 

IBM  has  now  addressed 
customer  needs  for  business 
protection  and  in  doing  so  has 
structured  a wide  range  of 
disaster  prevention /recovery 
services.  It  would  appear  from 
the  range  of  services  offered  that 
most  eventualities  have  been 
covered.  Further,  the  choice 
offered  to  customers  contains 
the  important  element  of 
flexibility. 

Following  completion  of  this 
detailed  profile  of  IBM,  the  IBM 
customer  base  should  be  left 
with  two  clear  messages: 

• IBM  is  fully  committed  to 
achieving  its  quality  goals. 

• IBM  UK  has  made  substantial 
progress  along  its  chosen 
path  to  become  a services 
company. 

However,  there  is  one  factor 
crucial  to  success  and  that  is 
corporate-level  commitment. 
INPUT  considers  that  IBM  has 
demonstrated  that  level  of 
commitment  to  date  in  the 
successes  achieved.  ■ 


Granada  Computer  Services, 
Europe's  largest 
independent  maintenance 
company,  has  announced  two 
more  success  stories  in  the  U.K. 

Success  Number  1 

The  first  of  these  successes 
concerns  an  expanded 
partnership  with  Brother,  the 
printer  and  office  systems 
manufacturer.  Brother  has 
expanded  this  partnership  with 
a new  one-year  agreement  for 
Granada  Microsystems  Division 
(MSD)  to  cover  warranty  and 
maintenance  of  its  entire  range 
of  office  computer  equipment. 
This  new  contract  is  in  addition 
to  the  current  maintenance,  by 
Granada,  of  Brother's  system 
printers. 

Prior  to  this  new  contract. 
Brother  held  contracts  with  a 
number  of  different 
maintenance  companies 
throughout  the  U.K.,  but  "has 
decided  to  use  Granada  MSD 
because  of  its  pedigree  and 
ability  to  offer  tailor-made 
services  to  end  users  on  a 
nationwide  scale." 

Equipment  covered  by  this 
contract  will  be  laser,  impact 
and  daisy  wheel  printers,  and 
PCs  and  word  processing  units. 
The  services  provided  will 
include  on-site  warranty  with 
next-day  response,  component 
level  repair,  preventive 
maintenance  and  installation. 


John  Harris,  Granada  MSD  Sales 
Manager,  explained:  "This  is  one 
of  our  largest  manufacturer 
support  contracts  to  date; 
around  70  MSD  engineers  will 
work  on  Brother  equipment  on  a 
day-to-day  basis.  The  single 
point  of  contact  with  Granada's 
nationwide  operation  offers  the 
customer  both  simplified 
administration  and  the 
provision  of  services  previously 
unavailable  to  their  end  users." 

John  Carter,  General  Manager  of 
Brother,  commented:  "My 
number  one  priority  is  to 
provide  the  best  possible 
maintenance  service  to  all 
Brother  customers  and,  I believe, 
using  Granada  is  the  best  way  to 
achieve  this.  We've  been  very 
pleased  with  their  service  in  the 
past,  and  I have  every 
confidence  that  our  clients  will 
benefit  from  the  same  high 
standards  through  our  new 
extended  arrangement." 

Success  Number  2 

The  second  success  story 
announced  by  Granada 
Computer  Services  concerned 
the  award  of  a contract  in 
Dublin,  Ireland. 

Granada  has  been  appointed  by 
the  Department  of  Justice  to 
maintain  its  Digital  mainframe 
equipment.  For  the  past  two 
years  Granada  has  been 
maintaining  the  Department's 
IBM  systems. 


INPUT 


O 1991  by  INPUT.  Reproduction  prohibited. 


October  1991 


Service  Update 


The  equipment,  based  in  Dublin, 
runs  critical  applications; 
continuous  24-hour  systems 
availability  will  be  ensured  by 
dedicated  engineering  support. 

In  commenting  on  this  new 
contract,  John  McHale, 
Granada's  general  manager 
said:  "This  marks  the  company's 
further  expansion  into  the 
government  sector  and 
demonstrates  the  level  of 
confidence  placed  in  Granada  by 
the  country's  largest  information 
technology  users." 

Granada  has  been  operating  in 
Ireland  since  1987  and  claims 
that  customers  include 
organisations  in  the  banking, 
commercial,  education  and 
Government  sectors. 


Success  is  Followed  by 
More  Change 

Following  closely — less  than  one 
month — behind  the 
announcement  by  Granada  of 
two  significant  success  stories, 
the  company  was  subject  to  a 
substantial  organisational 
change. 

On  October  17,  Granada  Group 
announced  that  it  was 
implementing  substantial 
reductions  in  headcount  among 
the  European  operations  of 
Granada  Computer  Services 
International. 

Restructuring  of  Granada 
Computer  Services  International 
will  result  in  the  loss  of  550  jobs. 


17 

Of  these  job  losses,  about  330 
will  be  in  the  U.K.;  the  cuts  are 
claimed  by  Granada  to  be 
mainly  in  the  sales  and 
marketing  areas.  The  remainder 
of  the  job  losses  will  occur  in  the 
other  10  countries  in  which  the 
company  operates. 

The  job  losses  have  occurred  as 
a result  of  moves  by  the  parent 
group,  Granada  PLC,  to 
improve  the  profitability  of  its 
computer  maintenance 
operations.  The  company 
claims  that  the  computer 
maintenance  operations  will  be 
profitable  by  the  end  of  the  year. 

Restmcturing  costs  that  result 
from  this  latest  move  by 
Granada  are  estimated  at  about 
£15  million  ($28  million).  ■ 


IBM  Offers 
Software  Mall 


Anew  applications  software 
service  from  IBM — the 
Software  Mall — is  announced 
for  a November  15  opening. 

The  service  is  available  through 
the  IBM  Information  Network 
and  IBMLink,  and  will  provide 
subscribers  with  access  to  over 
thirteen  software  vendors 
offering  services  such  as  bulletin 
boards,  electronic  mail, 
electronic  delivery,  Q& A 
support,  and  electronic  ordering 
of  software  and  services. 

"Store  owners"  who  have 
signed  up  for  the  November 
opening  include  Candle 
Corporation,  Computer 
Associates  International,  Inc., 


COMPUWARE,  Kimberly-Clark 
Computer  Service, 
KnowledgeWare,  Landmark 
Systems,  Legent  Corporation, 
Pansophic,  PLATINUM 
Technology,  Proramart 
Corporation,  Soft-Switch,  SRA, 
and  Velocity  Software. 

Store  owners  will  provide 
services  for  programs,  other 
than  operating  systems,  that  are 
compatible  with  IBM's 
operating  systems.  Support  will 
vary  from  vendor  to  vendor. 
Capabilities  available  include: 

• Message  exchange  regarding 
hints  and  tips,  problem 


reporting,  technical  infonna- 
tion,  and  announcements 

• On-line  bulletin  board  service 
containing  notices  and 
information 

• Software  fixes  and  patches 
delivered  on-line  to 
customers 

• Software  uploaded  from  the 
customer  to  the  store  owner 
for  diagnostic  purposes  and 
other  electronic  data 
interchange 

• On-line  forms  for  enrollment, 
ordering,  question  or  data 
submission,  or  requirements 
submission 

Continued  on  next  page 


October  1991 


C 1991  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 


18 


Mall.  . .from  page  17 

• Access  to  the  IBM 

Information  Exchange  and 
IBM  Mail 


• Optional  access  to  remote 
screen  viewing  for  diagnostic 
purposes  and  to  provide  on- 
line education 


The  customer  may  incur 
additional  charges  for  the  use  of 
the  IBM  Software  Mall  and  other 
charges  based  on  the  type  of 
services  required  from  the  store 
owner.  ■ 


Snippets 


❖ In  the  USA,  there  is  some  talk  that  NYNEX  is  seeking  to  divest 
itself  of  The  Data  Group,  which  it  acquired  in  late  1985. 

❖ In  the  USA,  JWP  has  announced  organisational  plans  for  the 
newly  acquired  Businessland.  The  new  venture  will  be  named 
JWP  Businessland,  with  headquarters  in  Canton,  MA.  After 
progress  has  been  made  in  merging  the  two  organisations,  it 
will  focus  on  the  service  side  of  the  business.  It  is  believed  that 
the  real  growth  areas  are  in  the  services  offered  to  customers. 

❖ Intelogic  Trace,  one  of  the  largest  independent  maintenance 
companies  in  the  USA,  has  reported  improved  fourth-quarter 
financial  performance.  The  latest  figures  released  by  the 
company  indicate  that  net  fourth-quarter  losses  were  $10.1 
million,  compared  with  losses  of  $12.3  for  the  same  quarter  last 
year.  Net  losses  for  the  year  to  27  July  were  also  reduced  to 
$13.3  million,  compared  with  $19.6  million  for  the  same  period 
last  year.  Fourth-quarter  1991  turnover  was  down  4%  at  $35.3 
million. 

❖ Following  in  the  footsteps  of  IBM,  Digital  has  announced  a 
subsidiary  in  Poland  as  a continuation  of  its  investments  in 
Eastern  Europe.  The  new  subsidiary,  based  in  Warsaw,  will 
open  in  November  and  will  initially  employ  about  30  staff. 

❖ In  a revision  of  its  original  decision  to  close  its  personal 
computer  plant  at  Little  Rock,  Arkansas  in  the  USA,  AT&T  has 
now  said  that  the  plant  will  not  close.  However,  300  jobs  will 
still  be  cut  over  the  next  few  months. 

❖ ICL  has  announced  the  signing  of  a £2  million  ($3.5  million) 
contract  with  AAH  Holdings  PLC  in  the  U.K.  This  contract  is 
for  the  supply  of  500  new  9520  series  PC-based  point-of-sale 
terminals.  The  new  terminals  will  form  part  of  the  LINKPoS 
project,  aimed  at  supplying  complete  point-of-sale  systems  to 
independent  pharmaceutical  retail  outlets. 

ICL's  participation  in  this  project  is  with  PoS  Halifax,  a software 
house  based  in  West  Yorkshire,  and  Granada  Microcare,  an 
independent  maintenance  company  and  part  of  the  Granada 
group. 

❖ Following  announcement  by  IBM  that  it  was  restructuring  its 
Scandinavian  operations  to  simplify  and  consolidate  the 
reporting  lines,  IBM  has  now  announced  a similar  restructuring 
in  the  Benelux  region.  From  1 January  next  year,  important 
management  activities  in  Belgium,  the  Netherlands, 


INPUT 


C 1991  by  INPUT.  Reproduction  prohibited. 


October  1991 


Service  Update 


19 


Snippets 


Luxembourg  and  Ireland  will  be  centralised  in  Antwerp, 

Belgium.  1 he  new  centralised  organisation  will  be  known  as  IBM 
North-West  and  the  company  indicates  that  between  15  and  20 
staff  will  be  employed  at  the  Antwerp  location. 

In  justifying  the  inclusion  of  IBM  Ireland  with  IBM  North-West 
rather  than  consolidation  of  it  with  the  U.K.  operation,  IBM 
claimed  it  was  a matter  of  structure.  IBM  Ireland  is  relatively 
small,  employing  about  370  staff,  and  has  more  in  common  with 
the  European  operations  with  which  it  is  being  combined  than 
with  the  extremely  large  U.K.  organisation.  IBM  Ireland  has 
always  been  part  of  IBM  Europe  and  not  the  U.K.  organisation. 

One  result  of  this  restructuring  by  IBM  is  that  headcount  in  the 
region  will  be  reduced.  One  thousand  jobs  are  expected  to  be  lost 
at  IBM  Netherlands  and  350  jobs  at  IBM  Belgium  over  the  next 
three  years. 

♦♦♦  CRC  is  to  buy  Rodime's  disk  repair  centre  at  Glenrothes,  Scotland 
in  the  U.K.  Following  the  demise  of  Rodime  as  a disc  drive 
manufacturer,  the  company's  facilities  were  placed  in  the  hands 
of  an  Official  Receiver.  CRC  Ltd  has  negotiated  the  purchase  of 
the  Rodime  disk  repair  centre  with  the  appointed  receivers.  CRC, 
a subsidiary  of  Memec  (Memory  & Electronic  Components  PLC), 
based  in  Thame  Oxfordshire  U.K.,  indicates  that  it  will  make 
substantial  investment  in  the  newly  acquired  repair  centre  in 
order  to  offer  a more  comprehensive  service  to  disk  drive 
manufacturers  and  OEMs.  The  level  of  service  offered  will 
include  exchange  services,  customer  support,  development 
services  and  end-of-lhe-line  manufacture. 

In  1990,  CRC  was  estimated  to  employ  over  110  staff  in 
independent  maintenance,  operating  from  six  service  centres  in 
the  U.K.  Independent  maintenance  revenues  for  1990  are 
estimated  to  have  been  about  £2.5  million  ($4.3  million). 

❖ StorageTek  and  Groupe  Bull  have  entered  into  a partnership 
agreement  that  covers  a period  of  at  least  five  years  and  is 
expected  to  provide  StorageTek  with  about  $500  million  in 
revenue  over  the  five-year  term  of  the  agreement.  Under  the 
terms  of  the  agreement: 

- Bull  will  distribute  and  maintain  StorageTek's  storage  products. 

- StorageTek  will  become  the  preferred  supplier  of  storage  prod- 
ucts to  Bull  for  all  Bull  environments. 

- Bull  will  distribute  StorageTek  products  to  Bull  users. 

The  agreement  also  provides  opportunities  for: 

- Bull  to  supply  standard  computer  systems  to  StorageTek  for 
integration  into  its  mass  storage  systems 

- The  establishment  of  joint  research  and  development 
programmes  ■ 


October  1991 


O 1991  by  INPUT.  Roprcxiuclion  prohlbHed. 


INPUT 


About  INPUT 


INPUT  provides  planning  information,  analysis,  and  recommendations  for  the 
information  technology  industries.  Through  market  research,  technology 
forecasting,  and  competitive  analysis,  INPUT  supports  client  management  in 
making  informed  decisions. 

Subscription  services,  proprietary  research/consulting,  merger/acquisition 
assistance,  and  multiclient  studies  are  provided  to  users  and  vendors  of  information 
systems  and  services.  INPUT  specialises  in  the  software  and  services  industry 
which  includes  software  products,  systems  operations,  processing  services,  network 
services,  systems  integration,  professional  services,  turnkey  systems,  and  customer 
services.  Particular  areas  of  expertise  include  CASE  analysis,  information  systems 
planning,  and  outsourcing. 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior  management 
positions  in  operations,  marketing,  or  planning.  This  expertise  enables  INPUT  to 
supply  practical  solutions  to  complex  business  problems. 

Fonned  as  a privately  held  corporation  in  1974,  INPUT  has  become  a leading 
international  research  and  consulting  firm.  Clients  include  more  than  100  of  the 
world's  largest  and  most  technically  advanced  companies. 


INPUT  OFFICES 


North  America 

San  Francisco 

1280  Villa  Street 

Mountain  View,  CA  94041-1194 

Tel.  (415)  961-3300  Fax  (415)  961-3966 

New  York 

Atrium  at  Glenpointe 
400  Frank  W.  Burr  Blvd. 

Teaneck,  NJ  07666 

Tel.  (201)  801-0050  Fax  (201)  801-0441 

Washington,  D.C. 

INPUT,  INC 

1953  Gallows  Road,  Suite  560 
Vienna,  VA  22182 

Tel.  (703)  847-6870  Fax  (703)  847-6872 


International 

London 
INPUT  LTD. 

Piccadilly  Mouse 

33/37  Regent  Street 

London  SWIY  4NF,  England 

Tel.  (071)  493-9335  Fax  (071)  629-0179 

Paris 

INPUT  SARL 

24,  avenue  de  Recteur  Poincare 
75016  Paris,  France 

Tel.  (33-1)  46  47  65  65  Fax  (33-1)  46  47  69  50 

Frankfurt 
INPUT  LTD. 

Sudetenstrasse  9 

D-6306  Langgons-Niederkleen,  Gennany 
Tel.  (0)  6447-7229  Fax  (0)  6447-7327 

Tokyo 

INPUT  KK 

Saida  Building,  4-6 

Kanda  Sakuma-cho,  Chiyoda-ku 

Tokyo  101,  Japan 

Tel.  (03)  3864-0531  Fax  (03)  3864-41 14 


INPUT 


Service 
U pdate 


Route: 


© INPUT 


A Publication  from  INPUT’S  Customer  Service  Programme — International 

November  1991 


IN 

1 ... 

.Learning  Tree — An  International  Training  Company 

THIS 

4 ... 

.TPME — A Maintenance  Consultancy  Company 

ISSUE: 

News  from  the  USA 

7 ... 

8 ... 

.U.S.  Trends  in  Desktop  Services 

.U.S.  Service  Requirements  Studies  Soon  To  Be  Released 

9 ... 

.Snippets 

Learning  Tree — An  International 
Training  Company 


Learning  Tree  is  a privately 
owned  company  that  claims 
to  be  a world  leader  in  advanced 
technology  education.  The 
company's  headquarters  are  in 
Los  Angeles,  CA,  USA  with 
operations  covering  the  USA, 
Canada,  Western  Europe  and 
Japan. 

Formed  in  1974,  Learning  Tree 
now  has  a team  of  over  500 
instructors  presenting  over  2,000 
training  courses  annually.  In 
founding  the  company,  E>r. 
David  Collins  and  Eric  Garen 
recognised  a clear  need  for 
educating  working  engineers  in 


computers,  communications  and 
related  technologies.  They 
decided  to  create  a multinational 
company  devoted  to  these  tasks. 

In  describing  the  benefits  of 
Learning  Tree  education  and 
training,  the  company  highlights 
the  following  attributes: 

• High  and  rapid  return  on 
investment — the  company 
claims  that  clients  report  an 
average  productivity 
improvement  of  27% 
following  participation  in  its 
courses 


• Improved  competitive 
position  through  reduced 
costs  and  increased 
productivity — Learning  Tree 
claims  that  its  instructors 
spend  80%  of  their  time 
working  within  their  own 
fields  of  activity  and  20% 
sharing  up-to-date 
knowledge  with  training 
course  participants.  Using 
this  approach  instructors  can 
transfer  the  'T)est  practices" 
based  on  many  years  of 
hands-on  experience. 


Continued  on  next  page 


Service  Update 


2 


Tree. . .from  page  I 


• A guarantee  of  satisfaction — 
after  more  than  1 million 
participant  days  of  training. 
Learning  Tree  feels  that  it  can 
provide  this  guarantee  with 
confidence.  In  backing  up 
this  level  of  confidence,  the 
company  offers  to  refund  the 
full  training  fee  unless  clients 
feel  1007o  satisfied. 

The  chronological  history  of  the 

company  can  be  summarised  as 

follows: 

• Founded  1974  in  Los  Angeles, 
CA,  USA 

• In  1975,  the  European 
headquarters  were  opened 
and  the  first  courses 
presented  in  Japan. 

• Between  1980  and  1981, 
Learning  Tree  was  employed 
to  train  the  entire  IBM  team 
that  would  be  responsible  for 
developing  the  IBM  PC. 

• In  1985  the  Canadian  centre 
opened  in  Ottawa. 

• Between  1986  and  1989,  the 
number  of  employees  grew  to 
500  worldwide  and  company 
investment  exceeded  $5 
million. 

• In  1989,  the  company  name 
was  changed  to  beaming 
Tree  International  and  the 
company  completed  delivery 
of  1 million  participant  days 
of  training. 

• In  1990  Learning  Tree 
International  KK  was  formed 
in  Japan. 


Within  Western  Europe,  the 
scope  of  training  currently 
offered  by  Learning  Tree  is 
relatively  wide — the  courses 
available  range  from 
management  training  to 
microprocessors.  Some  of  the 
training  courses  available  are: 

• Courses  for  Managers  in 
Technical  Environments, 
comprising  six  short  courses, 
each  of  four  days'  duration, 
costing  about  $2,100. 

• Software  Development  and 
Project  Management, 
comprising  nine  short  courses 
of  four  days'  duration, 
costing  about  $1,950. 

• Networks,  Data 
Communications  and 
Telecommunications, 
comprising  nine  short  courses 
of  four  days'  duration, 
costing  about  $2,100. 

• Hands-on  courses  on  "C", 
UNIX,  and  OS/2,  comprising 
nine  short  courses  of  four 
days'  duration  each,  costing 
about  $2,100. 

• PC  Trouble  Shooting, 
Microprocessors,  Signal 
Processing,  Graphics  and 
Signal  Processing,  comprising 
six  short  courses  of  2-4  days' 
duration,  costing  between 
$1,200  and  $2,100. 


In  presenting  its  view  of  key 
trends  and  issues  related  to  the 
European  training  and 
education  market.  Learning  Tree 
highlights: 

• The  return  on  investment  for 
both  users  and  vendors  is 
becoming  increasingly 
important.  From  the  users' 
point  of  view,  historically 
only  a minority  of 
organisations  have  attempted 
to  measure  the  effectiveness 
of  training.  However,  now 
there  is  a trend  towards  more 
sophisticated  systems  for 
measuring  productivity  and 
efficiency  gains.  From  the 
vendors'  perspective,  there  is 
a need  for  improved  methods 
of  justifying  the  return  on  the 
training  investment  made  by 
users. 

• Resulting  from  pressure 
within  organisations  to 
reduce  costs,  there  is  an 
increasing  need  for  users  to 
justify  expenditure  on 
training  and  also  to  identify 
which  skills  are  strategic  to 
their  organisation. 

• There  is  an  opportunity  to 
develop  and  provide  access 
to  training  through  the 
medium  of  user  applications. 
This  can  be  achieved  by 
integrating  the  design  of 
training  modules  into  the 
design  of  applications. 


INPUT 


e 1991  by  INPUT.  Reproduction  prohibited. 


November  1991 


Service  Update 


3 


• Technical  professionals — for 
example,  professional  DP 
staff — will  progressively 
need  more  training  and  be 
exposed  to  training  on  a 
wider  range  of  subjects.  This 
will  specifically  be  related  to: 

- Datacommunications 

- Graphics 

- Fibre  Optics 

- Image  Processing 

- Networking 

- Software  Engineering 

Learning  Tree  is  of  the  opinion 
that  training  is  not  necessarily 
the  first  item  to  suffer  from 
budget  cuts  in  times  of 
recession,  at  least  not  at  the 
more  advanced  level.  In 
commenting  on  the  skills 
shortage.  Learning  Tree 
suggested  that  this  state  is,  to  a 
degree,  due  to  users'  poor  use 
of  existing  skills. 

However,  the  company  feels 
that  the  key  to  market  growth  is 
successful  measurement  of 
training  benefits — provided  that 
the  training  is  successfully 
implemented.  Further,  the 
growth  of  UNIX  will  be  a major 
factor  that  will  contribute  to  the 
future  growth  of  training. 

The  worldwide  training 
revenues  of  Learning  Tree  are 
between  $50  million  and  $60 
million,  of  which  about  50%  is 
generated  within  Western 
Europe. 


The  make-up  of  the  Western 
European  revenue  base  is 
illustrated  in  Exhibit  A. 


Exhibit  A 


Learning  Tree 

Western  European  Revenues,  1990 


Country  Market 
Operation 

Percentage  of 
Revenue 

France 

35 

Sweden 

20 

United  Kingdom 

45 

Total 

100 

Source:  INPUT 


It  should  be  noted  that  training 
revenue  credited  to  the  United 
Kingdom  includes  some 
revenue  from  the  training  of 
non-U.K.  students.  About  25% 
of  the  United  Kingdom  revenues 
occur  as  a result  of  these 
activities,  and  relate  to  training 
for  students  from  the 
Netherlands  and  Scandinavia 
(excluding  Sweden).  ■ 


November  1991 


C 1991  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 


4 


TPME— 

A Maintenance  Consultancy  Company 

Third-Party  Maintenance 
Exchange  (TPME)  is  a U.K. 
company  that  describes  its 
business  role  as  that  of  a 
maintenance  consultancy.  The 
major  activity  of  the  company  is 
to  act  as  a broker  for 
maintenance  contracts.  This 
means  that  when  a client  has 
specific  computer  maintenance 
requirements,  TPME  will  seek  to 
place  the  maintenance  contract 
with  a company  whose 
capability  matches  the  client's 
needs. 

In  return  for  the  services 
provided,  TPME  charges  a 10% 
commission  based  on  the  sales 
value  of  the  contract  placed. 


Exhibit  B 

TPME — An  Overview 

— 

• Provide  true  single-source  maintenance  through 
resource  management 

• Access  to  over  2,600  maintenance  specialists 

• Support  service  vendor  subcontracting  needs 

• Offer  a wide  range  of  consultancy  services 

Source:  INPUT 


In  order  to  support  its  business 
and  as  a platform  from  which  to 
provide  an  extensive  and 
specialised  service,  TPME  claims 
to  have  a database  identifying 
about  2,600  companies  or 
individual  specialists  available 
to  support  its  clients.  In 
addition,  TPME  claims  to  be 
adding  one  company  to  its 
database  each  week,  and  that  in 
the  two  years  the  company  has 
been  operating  it  has  only  failed 
to  place  a contract  four  times  as 
a result  of  being  unable  to  locate 
a suitable  contractor.  Exhibit  B 
provides  an  overview  of  the 
company. 

Primary  Activities 

TPME  was  formed  in  1989  by 
Sheron  Hassell  and  currently 
operates  from  a rural  location 


near  Woking  in  the  U.K.,  south 
of  London.  Sheron  Hassell  had 
worked  for  many  years  in  sales 
within  the  independent 
maintenance  market  and  had 
become  bored  and  disenchanted 
by  this  activity.  He  could  see 
great  opportunities  for  true 
single-source  maintenance  but 
was  frustrated  at  being  unable 
to  close  contracts  due  to  lack  of 
true  single-source  capability. 

It  was  as  a result  of  this 
disenchantment  and  frustration 
that  TPME  was  founded.  The 
initial  objective  of  the  company 
was  to  capitalise  on  the 
opportunities  offered  by  single- 
source maintenance,  and  to 
achieve  this  objective  by 
developing  a resource  capability 
to  satisfy  a wide  range  of  client 
needs. 


The  primary  activities  of  the 
company  include  the  resourcing 
and  maintenance  of 
manufacturer  and  independent 
maintenance  company 
subcontracting  requirements 
and  the  resourcing  of  warranty 
for  manufacturers  and 
importers.  The  company  is 
wholly  owned  by  Sheron 
Hassell  and  employs  four  full- 
time associate  consultants  and 
one  part-time  associate 
consultant.  Between  them,  the 
staff  of  TPME  claims  to  have  in 
excess  of  100  man-years  of 
experience  in  maintenance 
management. 

The  aim  of  the  company  is  to 
provide  service  vendors  with  a 
single-source  solution — through 
sulxontracting — throughout  the 
U.K.,  Europe  and  beyond. 


INPUT 


e 1991  by  INPUT.  Reprodudlon  prohtbiled. 


November  1991 


Service  Update 


Having  identified  this  aim, 
TPME  has  developed  plans  to 
extend  its  geographic  coverage 
to  include  the  mainland  of 
Europe,  and  intends  to 
commence  implementation  of 
these  plans  at  the  end  of  1991. 

TPME  does  not  provide  any 
service  capability  itself;  this  is 
left  to  subcontractors. 

In  providing  a subcontracted 
maintenance  capability  for 
clients,  TPME  is  able,  through 
the  use  of  its  extensive  database, 
to  match  specific  needs  of 
clients.  For  example; 

• If  a client  requires 
maintenance  to  be  carried  out 
by  a company  to  BS  5750/ISO 
9001  standards,  the  company 
will  ensure  appropriate 
routing  of  the  contract. 

• If  a client  requires 
maintenance  on  a relatively 
unique  equipment 


configuration  or  old/obsolete 
equipment,  TPME's  database 
allows  it  to  identify  a supplier 
with  appropriate  skills. 

Associate  consultants  generally 
work  from  a home  base  and 
communicate  or  access 
databases  via  a network. 

Beyond  Maintenance 

Although  maintenance 
consultancy  is  the  primary 
object  of  the  company,  TPME 
also  provides  a range  of  services 
extending  beyond  this  base. 
Exhibit  C gives  an  indication  of 
the  full  range  of  services  offered 
by  TPME. 

In  addition  to  maintenance 
consultancy,  TPME  offers  a 
wider  range  of  services  that  it 
groups  generically  under  the 
heading  Computer  Services. 
These  services  include: 


5 

Financial  Analysis,  including 
aspects  such  as: 

- Profit  expectation  from 
service 

- Service  product  positioning 
and  pricing 

- Identification  of  cost-saving 
areas 

- New  service  pricing 

- Balancing  profitable  and 
unprofitable  services 

- Profit  optimisation 

- Future  trends 

Strategic  Planning,  including 
the  following  areas: 

- Developing  new  services 

- Penetration  of  new  markets 

- Service  marketing 

- Partnership  and  co- 
operative agreements 

- Impact  of  1992  European 
harmonisation  on  service 
markets 

- Acquisitions  and  divestiture 

- Quality  BS  5750/ISO  9001 
applicability  and 
achievement 

Product  Evaluation,  which 
includes  assisting  clients  with 
the  evaluation  of  products  in 
terms  of  assessing  the  degree 
of  user  need  fulfillment, 
identifying  additional 
development  required. 


Exhibit  C 

TPME — Range  of  Services 

— 

• Maintenance  consultancy 

• Assi5^tance  for  companies  developing  support 
capability 

• Help  for  companies  responding  to  large  tenders 

• Provision  of  independent  advisory  services 

Source;  INPUT 


Continued  on  next  page 


November  1991 


e 1991  by  INPUT,  Reproducllon  prohibited. 


INPUT 


Service  Update 
6 


identifying  delivery  channels 
and  developing  product 
launch  programmes. 

• Training,  which  provides  a 
relatively  wide  range  of 
training  courses  for  clients, 
extending  from  technical 
training  through  sales 
training  and  including 
seminars.  For  example: 

- Technical  training  ranges 
from  appreciation  courses 
to  in-depth  courses 
covering  hardware  and 
software  products, 
including  networks. 

- Sales  training  ranges  from 
sales  appreciation  courses 
to  product  or  service  sales. 

- Seminars  include  subjects 
such  as  quality,  computer 
services,  marketing  and 
customer  care. 

A Project  Example 

In  order  to  more  fully  explain 
the  primary  activities  of  TPME, 
a brief  summary  of  a project  it 
undertook  with  Aston 
University  in  the  U.K.  follows. 

Aston  University  claims  to  be 
one  of  the  U.K.'s  leading 
computer  colleges.  At  present, 
Aston  has  a claimed  population 
of  about  6,000  including  4,000 
students,  250  academic  staff  and 
almost  2,000  other  staff.  Most  of 
the  academic  staff  and 
administrators  have  a computer 
or  close  access  to  one.  The 
university  estimates  that  it  has 
about  £10  million  ($18  million) 
worth  of  computers  and 


associated  equipment.  This 
installation  includes  a recently 
installed  local-area  network 
valued  at  about  £4  million  ($7.2 
million)  with  over  2,600  access 
points. 

The  problem  Aston  University 
was  confronted  with  was  that  its 
computer  systems  were 
supplied  by  a wide  variety  of 
vendors,  including  older 
equipment  supplied  by  ICL, 

Teac  and  Geac,  as  well  as  the 
more  mainstream  suppliers. 
Having  a wide  range  of 
equipment  installed,  the 
university  was  becoming 
increasingly  disenchant^  with 
the  service  provided  by  the 
manufacturers  of  the  equipment, 
claiming  that  each  manufacturer 
was  only  interested  in 
supporting  its  own  equipment. 
Further,  there  were  many 
arguments  between  rival 
engineers  as  to  where  faults 
were  located  when  problems 
arose. 

As  a further  complication,  the 
university  was  keen  to  have 
resident  site  engineers,  and  the 
suppliers  were  unwilling  to 
provide  this  service. 

In  order  to  reach  a solution  to 
these  problems,  the  university 
decided  to  discontinue  a 
multitude  of  different  service 
contracts  and  enter  into  a single- 
source contract  with  a specialist 
supplier. 

Enter  TPME 

With  assistance  from  TPME  and 
its  consultancy  services,  the 
university  was  able  to  locate  a 
specialist  single-source 
maintainer.  TPME  worked  with 


the  university  to  put  together  a 
deal  with  a relatively  newly 
formed  company.  Fifth  Party 
Computer  Services. 

The  contract  developed  is 
estimated  at  about  £500,000 
(almost  $1  million)  over  a three- 
year  period,  and  under  the 
terms  of  the  contract,  the 
university  will  get  a resident 
on-site  engineer. 

Fifth  Party  Computer  Services  is 
headed  by  Mr.  Bob  James, 
formerly  with  DPCE,  and  was 
formed  in  1990  by  five 
experienced  engineers. 

TPME— 

The  Raison  d’Etre 

In  explaining  its  activities, 

TPME  focussed  on  a key  factor 
that  it  considers  will  contribute 
to  future  success.  That  factor  is 
that  it  is  easier  to  set  up  a 
network  of  maintenance 
capability  than  it  is  fora 
company  to  set  up  business, 
particularly  where  setting  up  at 
the  international  level  is 
concerned.  Therefore  TPME 
believes  that  its  planned  move 
into  the  mainland  of  Europe  will 
be  successful. 

For  further  information,  contact: 

Sheron  Hassell 
TPME  Ltd., 

Woodend,  Anthonys 
Horsell  Common 
Woking,  Surrey  GU21  4YE 
Telephone  44-4830760  543.  ■ 


INPUT 


O 1991  by  INPUT.  Reproduction  prohibited. 


November  1991 


U.S.  Trends  in  Desktop 
Services 


Companies  are  using  more  personal  computers  to  accomplish 
critical  applications  than  in  the  past.  The  critical  nature  of  the 
applications  has  created  a demand  for  service  on  the  PCs  to  keep 
them  up  and  running  with  increased  availability. 

The  service  vendor  has  to  deal  with  various  configuration 
combinations  when  pricing  the  service  on  the  equipment.  RAM 
memory  is  one  aspect  of  the  service  pricing  that  must  be 
considered.  Some  vendors  will  base  the  service  contract  price  on 
the  maximum  amount  of  RAM  installed  on  the  machine.  Another 
twist  on  the  RAM-based  pricing  is  one  price  for  a range  of  RAM,  up 
to  a maximum  amount.  Bell  Atlantic  Business  Systems  Services 
places  more  weight  on  the  size  of  the  hard  drive  installed  than  on 
the  amount  of  RAM  installed,  and  bases  the  service  price  on  the  size 
of  the  hard  drive.  ■ 


Coniinued  on  next  page 


November  1991 


e 1991  by  INPUT.  Roproduclloo  prohibllod. 


INPUT 


Service  Update 


8 


U.S.  Service  Requirements 
Studies  Soon  To  Be 
Reieased 

The  1991  U.S.  user  requirement  studies  soon  to  be  released  by 
INPUT  show  the  continued  emphasis  on  service  quality  aspects 
when  users  are  selecting  a service  vendor.  In  all  three  equipment 
size  ranges  (large  systems,  midrange  systems,  and  PC/ workstation 
systems)  users  rated  the  quality  of  service  as  more  important  in 
selecting  a service  vendor  than  price  or  other  contractual  issues. 

In  the  early-  to  mid-1980s,  service  quality  and  price  went  back  and 
forth  as  most  important  to  users.  Research  in  the  late  1980s  showed 
that  users  were  becoming  more  consistent  in  considering  service 
quality  more  important  than  price  in  judging  their  service 
providers.  This  could  be  due  to  the  increasing  importance  to  the 
core  business  of  applications  run  on  personal  computers. 

Other  issues  examined  in  the  user  requirements  studies  include 
systems  availability,  response  time,  repair  time,  and  the  demand  for 
services  ancillary  to  the  maintenance  Rinction.  ■ 


INPUT 


O 1991  by  INPUT.  Reproduction  prohibited. 


November  1991 


Service  Update 


9 


Snippets 


♦J*  In  the  U.K.,  Wang  has  offered  its  data  centre  for  sale.  The  centre 
is  part  of  Wang's  U.K.  division  and  is  located  at  Brentford 
Middlesex.  Wang  claims  that  this  move  is  part  of  a restructuring 
programme  it  has  named  "Operation  Quantum  Leap",  which  is 
being  driven  by  Wang's  European  Headquarters  in  Brussels. 

This  restructuring  programme  involves  the  centralisation  of  order 
processing,  distribution,  invoicing  and  purchasing  at  a newly 
established  Business  Operations  Centre  in  Brussels.  As  part  of 
the  reorganisation,  all  Wang  European  data  centre  functions  are 
being  relocated  to  Brussels. 

The  U.K.  data  centre  employs  32  staff  and  operates  18  VS 
minicomputers  and  a WangPak  X25  network. 

Centralisation  of  data  centre  facilities  in  Brussels  infers  that  all  11 
of  Wang's  European  subsidiaries  will  be  affected  and  that  these 
subsidiaries  will  operate  under  the  control  of  Brussels. 

❖ Following  the  acquisition  of  Digital  Research  Inc.,  Novell  is  to 
restructure  into  three  divisions.  It  is  believed  that  the 
restructuring  results  from  a need  to  cope  with  an  expanded  range 
of  services  and  products.  The  three  new  divisions  of  Novell  are: 

- NetWare  Systems  Group,  which  will  handle  the  product 
development  and  marketing  services  of  NetWare  network 
services,  IBM  communications,  Apple  Macintosh  and  database 
products 

- Interoperability  Systems  Group,  which  will  handle  product 
development  and  marketing  of  UNIX  products,  TCP/IP  and 
ISO  standards  products,  messaging  products,  WAN  networking 
systems  technology  and  network  management  product 
development 

- Digital  Research  Systems  Group 

Each  of  the  new  groups  will  report  to  Novell  Chief  Executive 
Mr.  Ray  Noorda. 


Continued  on  next  page 


November  1991 


C 1991  by  INPUT.  Reprodudlon  prohlbltfxJ. 


INPUT 


Service  Update 


10 


Snippets 

❖ Compaq  has  announced  a major  revision  of  its  previous 
. . .from  page  9 marketing  strategy,  which  was  aimed  at  a dealer-only  marketing 

channel.  The  company  is  considering  mail  order  marketing  and 
is  preparing  straightforward  entry-level  products  free  of 
unnecessary  features.  New  target  markets  include  home, 
education,  small  and  medium-sized  businesses  and  government 
offices.  In  the  USA  Compaq  has  signed  Merisel  Inc.  and  Tech 
Data  Corp.  to  distribute  Compaq  products  to  VARs  and  has 
retained  General  Electric  Computer  Service  and  TRW's  Customer 
Service  division  to  provide  on-site  maintenance.  On-site  service 
was  previously  carried  out  by  dealers. 

In  total,  six  senior  officers  of  Compaq  have  now  left  the  company 
as  a result  of  recent  changes. 

♦t*  In  Europe,  dealers  of  second-user  Digital  equipment  have 

decided  to  promote  their  own  maintenance  guarantee  certificate. 
This  action  is  claimed  to  result  from  three  years  of  delays  by 
Digital  in  developing  a solution.  Thirty-eight  dealers 
representing  the  European  Digital  Dealers  Association  are 
recruiting  independent  maintenance  companies  across  Europe  to 
provide  maintenance  under  the  scheme.  Plans  were  for  the 
dealers'  representatives  to  have  met  in  Amsterdam  on  November 
20  to  draw  up  the  terms  and  conditions  of  a certificate. 

Dealers  claim  to  be  frustrated  at  the  lack  of  progress  made  by 
n)igital,  although  Digital  now  claims  to  have  established  a 
position  and  will  make  a formal  announcement  soon. 

General  Datacomm  Ltd.,  based  in  Wokingham  U.K.,  has  opened 
a European  Technical  Operations  and  Assistance  Centre  with  the 
capability  to  provide  network  management  services.  It  is 
claimed  that  the  new  centre  can  provide  a network  management 
service  24  hours  a day,  seven  days  a week  for  as  long  a period  of 
time  as  customers  require.  A dedicated  line  from  the  centre  to 
the  most  convenient  customer  node  provides  24-hour  coverage. 

The  basis  of  the  network  management  service  is  that  General 
Datacomm  monitors  the  network  at  30-minute  intervals,  keeping 
a log  of  any  incidents  or  responses.  Customers  will  receive  a 
monthly  copy  of  the  log.  Thresholds  determining  intervention  or 


INPUT 


e 1991  by  INPUT.  Reproduction  prohibited. 


November  1991 


11 


Snippets 

action  are  specified  by  customers  and  defined  escalation 
procedures  are  set  for  problems  unresolvable  by  normal  routine 
procedures. 

Current  customers  include  British  Aerospace,  Shell,  Volvo  and 
Express  Newspapers.  The  degree  of  cover  provided  varies 
depending  on  individual  customer  needs.  General  Datacomm  is 
seeking  to  expand  the  customer  base  to  increase  service  revenue 
contribution  from  last  year's  34%  to  40%. 

❖ Hewlett-Packard  is  now  providing  a free,  one-year,  on-site 
limited  service  warranty  on  all  Vectra  486  PC  models. 
Furthermore,  the  company  is  extending  on-site  service  to  all 
Vectra  486  models  still  under  warranty. 

❖ Norsk  Data  and  Siemens  Nixdorf  have  reached  agreement  to 
form  a partnership.  The  partnership  between  the  two  companies 
concerns  Siemens  Nixdorf  combining  its  Norwegian  operations 
with  Norsk  Data  Partner  marketing  and  systems  integration 
company.  This  company  deals  mainly  with  national  and  local 
government  and  the  offshore  oil  industry.  TTie  majority 
shareholder  in  this  agreement  will  be  Siemens  Nixdorf;  the 
agreement  includes  an  option  for  Siemens  Nixdorf  to  acquire 
Norsk  Data's  total  shareholding.  The  newly  merged  company 
will  also  take  over  the  activities  of  both  companies  in  Sweden  and 
Denmark. 

In  the  first  half  of  1991,  Norsk  Data  Partner  had  a pre-tax  loss  of 
$39  million,  compared  with  a profit  of  $150,000  for  the  same 
period  last  year.  On  the  basis  of  financial  performance,  the 
agreement  to  merge  with  Siemens  Nixdorf  should  be  seen  as  a 
benefit  to  Norsk  Data. 

❖ An  example  of  the  impact  of  downsizing  was  provided  recently 
in  the  USA.  The  University  of  California's  Lawrence  Livermore 
National  Laboratory  is  investing  $1  million  in  a cluster  of  14  IBM 
RS/6000  Powerserver  550s;  the  objective  is  to  create  a UNIX 
computer  server  in  the  laboratory's  Open  Computer  Facility.  The 
550  is  IBM's  most  powerful  RS/ ^00  machine  and  the  new 
installation  will  run  AEX  3 UNIX. 

The  downsizing  factor  is  that  the  RS/6000  installation  will  replace 
a Cray  X-MP  supercomputer  and  an  Amdahl  mainframe.  ■ 


November  1991 


e 19<51  by  INPUT.  Reproduction  prohibited. 


INPUT 


About  INPUT 


INPUT  provides  planning  information,  analysis,  and  recommendations  for  the 
information  technology  industries.  Through  market  research,  technology 
forecasting,  and  competitive  analysis,  INPUT  supports  client  management  in 
making  informed  decisions. 

Subscription  services,  proprietary  research/consulting,  merger/acquisition 
assistance,  and  multiclient  studies  are  provided  to  users  and  vendors  of  information 
systems  and  services.  INPUT  specialises  in  the  software  and  services  industry 
which  includes  software  products,  systems  operations,  processing  services,  network 
services,  systems  integration,  professional  services,  turnkey  systems,  and  customer 
services.  Particular  areas  of  expertise  include  CASE  analysis,  information  systems 
planning,  and  outsourcing. 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior  management 
positions  in  operations,  marketing,  or  planning.  This  expertise  enables  INPUT  to 
supply  practical  solutions  to  complex  business  problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a leading 
international  research  and  consulting  finn.  Clients  include  more  than  100  of  the 
world's  largest  and  most  technically  advanced  companies. 


INPUT  OFFICES 


North  America 

San  Francisco 

1280  Villa  Street 

Mountain  View,  CA  94041-1194 

Tel.  (415)  961-3300  Fax  (415)  961-3966 

New  York 

Atrium  at  Glenpointe 
400  Frank  W.  Burr  Blvd. 

Teaneck,  NJ  07666 

Tel.  (201)  801-0050  Fax  (201)  801-0441 

Washington,  D.C. 

INPUT,  INC 

1953  Gallows  Road,  Suite  560 
Vienna,  V A 22182 

Tel.  (703)  847-6870  Fax  (703)  847-6872 


International 

London 
INPUT  LTD. 

Piccadilly  House 

33/37  Regent  Street 

London  SWIY  4NF,  England 

Tel.  (071)  493-9335  Fax  (071)  629-0179 

Paris 

INPUT  SARL 

24,  avenue  de  Recteur  Poincare 
75016  Paris,  France 

Tel.  (33-1)  46  47  65  65  Fax  (33-1)  46  47  69  50 

Frankfurt 
INPUT  LTD, 

Sudetenstrasse  9 

D-6306  Langgons-Niederkleen,  Germany 
Tel.  (0)  6447-7229  Fax  (0)  6447-7327 

Tokyo 

INPUT  KK 

Saida  Building,  4-6 

Kanda  Sakuma-cho,  Chiyoda-ku 

Tokyo  101,  Japan 

Tel.  (03)  3864-0531  Fax  (03)  3864-4114 


Route: 


INPUT 


Service 

Update 


© INPUT 


A Publication  from  INPUT'S  Customer  Service  Programme — International 


December  1991 

IN 

THIS 

1 .. 

...  1 991 — A Year  of  Challenges  for  the  Western  European 

Computer  Industry 

ISSUE: 

2.. 

..Integrate — A German  Company  Providing  Training  Services 

5.. 

...Sphinx-Level  V — An  Independent  U.K.  Training  Vendor 

8.. 

...Nexor  + Telub — An  Independent  Maintenance  Acquisition  in 

Scandinavia 

News  from  the  USA 

9.. 

...Company  Announces  TRW  and  GECS  as  Authorised 

Independent  Maintainers 

9.. 

...IBM  Announces  the  Opening  of  the  Software  Mall 

10  . 

..Snippets 

1991 — A Year  of  Challenges  for  the 
Western  European  Computer  Industry 


The  past  year  has  witnessed 
very  difficult  market 
conditions  for  system  vendors. 
Whilst  economic  recession  in 
some  countries  has  been  a 
factor,  the  signals  from  the 
market  indicate  that  more 
fundamental  changes  are 
affecting  the  whole  information 
technology  sector — principally, 
the  three  revolutionary  forces  of: 

• Downsizing 
• Networking 
• Outsourcing 


Downsizing  computer  systems  is 
possible  because  of  the 
availability  of  low-cost,  high- 
power  computer  systems  that 
can  be  easily  and  cost-effectively 
linked  together  through 
networking.  New  forms  of 
system  design — e.g.,  client/ 
server  systems — can  replace  the 
need  for  large  centralised 
mainframes. 

Networking  thus  opens  up  the 
opportunity  to  distribute 


computer  power  to  the  point 
where  the  work  takes  place.  The 
ability  to  move  information  (and 
thus  ideas)  quickly  and  cheaply 
will  have  a revolutionary  impact 
on  the  acquisition  of  business, 
commerce  and  administration, 
just  as  the  great  nineteenth 
century  revolution  was  the 
development  of  transportation 
systems,  which  allowed  for  the 
cost-effective  movement  of 
people. 


ontinued  on  next  page 


Service  Update 


2 


1991  . . . from  page  I 

Outsourcing  has  manifested  itself 
within  the  FF  market  principally 
in  the  form  of  systems 
operations  contracts  (facilities 
management).  At  the  widest 
level — the  farming  out  of 
business  operations  to  a third 
party — outsourcing  is  likely  to 
have  a profound  impact  on 
organisational  structures  during 
the  1990s. 

The  key  software  development 
that  has  facilitated  the 
downsizing  and  networking 
trends  has  been  the  advent  of 
open  s}/slems.  There  is  much 
debate  within  the  industry  as  to 
what  open  systems  means. 

INPUT  uses  it  here  to  imply  the 
concept  of  standards — all  the 
technical  standards  required  to 
allow  users  to  build  the  systems 
that  they  need  and  want. 
Consequently,  open  systems  used 
in  this  sense  implies; 

• Standards  for  the  portability 
of  software — e.g.,  UNIX. 


• Standardisation  of  computer 
systems  that  allows  software 
packages  to  run  on  all  classes 
of  the  same  system — e.g.,  MS- 
DOS  and  Windows  on  IBM- 
compatible  systems 

• Standards  for 
communications 

Unprecedented  improvement  in 
cost  performance  is  being 
experienced  not  just  through 
technology  advance,  but 
through  highly  competitive 
market  conditions  engendered 
by  the  open  systems  environment. 

A major  problem  for  future 
growth  of  the  industry  is  that 
the  market  is  experiencing  a 
downturn  in  the  rate  of  demand 
growth  for  investment  in  new 
applications.  There  thus  exists, 
despite  forecasts  for  increased 
numbers  of  computer  system 
shipments,  a scenario  for 
industry  shrinkage  as  price/ 
performance  improvement 
outpaces  new  application 
demand. 


These  dramatic  environmental 
changes  are  challenging  the 
customer  services  executive  to 
develop  new  revenue- 
generating opportunities 
through  careful  tracking  of  user 
needs  and  requirements  for 
services.  New  types  of  service 
opportunity,  such  as  supporting 
desktop  services  and  networks, 
will  increasingly  be  the  focus  of 
the  future. 

INPUT  looks  forward  to 
supporting  customer  services 
executives  and  managers  in 
their  efforts  to  profit  from  these 
new  opportunities  and  develop 
significant  new  revenue  streams 
INPUT'S  1992  research 
programme  will  cover  the 
impact  of  downsizing, 
networking  and  outsourcing  on 
customer  services,  monitor 
vendors'  service  strategies,  and 
continue  to  measure  changing 
customer  satisfaction  with 
services.  ■ 


Integrata — A German  Company 
Providing  Training  Services 


Integrata  AG  is  a privately 
owned  German  company.  The 
company  was  foundecf  in  1964 
by  Dr.  VVolfgang  Heilman.  In 
1989  the  company  changed  its 
status  from  GmbH  to  AG  and  at 
the  same  time  raised  its  capital 
base  from  DM  2 million  to  DM  4 
million. 


Integrata  currently  employs 
about  520  staff,  of  which  135 
have  ownership  of  the  company. 
There  are  no  other  shareholders. 

The  company  has  offices  in 
Stuttgart,  Hamburg,  Munster, 
Frankfurt,  Munich  and  a wholly 
owned  subsidiary  in 


Switzerland,  which  was 
organized  in  September  1990. 
The  company  also  has  co- 
operative agreements  with  DVZ 
Leipzig  GmbH  and  DVZ  Berlin 
GmbH.  These  companies 
conduct  Integrata's  training 
operations  within  their 
respective  geographic  areas. 


NPUT 


© 1992  by  INPUT  Reproduction  prohibited. 


December  1991 


Service  Update 


3 


Exhibit  A 

Integrata 

Five-Year  Financial  Summary 


Year 

1986 

1987 

1988 

1989 

1990 

Revenue  ($  Millions) 

18.9 

24.6 

31.0 

39.0 

46.1 

Annual  Growth 

Rate  (%) 

37 

30 

26 

26 

18 

Note:  Currency  conversion  at  $1  = DM  1 .68  Source:  INPUT 


During  1990,  Integrata  signed 
co-operation  agreements  with 
Hoskyns  U.K.  and  SINDATA  in 
Indonesia.  At  the  beginning  of 
1991,  Integrata  established  a 
subsidiary  in  Austria  and  has 
plans  to  open  a subsidiary  in 
Berlin  during  1991. 


A breakdown  of  the  revenue 
contribution  by  service  or 
product  delivery  mode  is 
provided  in  Exhibit  B. 


In  its  training  brochures, 
Integrata  lists  337  courses 
or  seminars  ranging  from 
two  days  to  five  weeks  in 
duration.  The  training 
brochure  is  divided  into 
three  parts: 

• 254  seminars  aimed  at 
technical  professionals 
and  programmers 

• 83  PC  seminars  focussed 
on  the  needs  of  end 
users 

• An  additional  range 
of  seminars  under  the 
heading  Academy  for 
Information  Technology 
(A.F.I.).  These  courses 
lead  to  formal  A.F.I. 
qualifications. 


Exhibit  A provides  a five-year 
financial  summary  for 
Integrata. 

Integrata  is  forecasting  1991 
revenues  at  $55.4  million  (DM 
93  million),  which  represents 
annual  growth  of  20%  over 
1990. 

The  key  products  and  services 
offered  by  Integrata  are  as 
follows: 

• Administrative  information 
systems 

• Technical  information 
systems 

• Software 

• Programming 

• Training 


December  1991 


Exhibit  B 

Integrata 

1990  Market  Analysis  by  Service  Mode 
(Integrata  Classification) 


Service/Product 

Delivery  Mode 

Revenue 
{$  Millions) 

Percent 

Consultancy 

9.2 

20 

Software  Department 
and  Services 

19.9 

43 

Standard  Software  Products 

3.1 

7 

Training 

13.9 

30 

Total 

46.1 

100 

Note:  Currency  conversion  at  $1  = DM  1 .68  Source:  INPUT 


© 1992  by  INPUT.  Reprodudion  prohibited. 


Continued  on  next  page 

INPUT 


Service  Update 


4 

Integrata ..  . from  page  3 

In  1990,  Integrata  claimed  to 
have  achieved  a total  of 
89,000  participant  training 
days. 

The  approach  to  training  that 
has  berr>  '••lopted  by  Integrata  is 
in  two  paits: 

• The  company  claims  to  be  a 
leading  provider  of  training 
in  the  German  market  and 
claims  "achieving  a rational 
and  approachable  use  of 
information  technology"  as  a 
goal. 

• A special  feature  of  Integrata 
training  is  that  all  trainers  are 
also  consultants  or  managers 
and  are  therefore  able  to 
bring  both  practical 
experience  and  current  issues 
to  bear  in  each  training 
seminar.  When  working  on 
projects,  trainers  impart  their 
theoretical  knowledge  to  the 
overall  benefit  of  the  project. 

In  positioning  itself  as  a full- 
service  training  company, 
Integrata  offers  the  following 
services  to  clients: 

• Customised  Seminar 
Development — Training  can 
be  directly  related  to  the 
customer's  individual  needs 
and  requirements.  Seminars 
can  be  conducted  either  at  the 
customer's  site  or  on 
Integrata  premises. 

• On-the-Job  Training — In 
recognition  that  it  is  often  a 
difficult  task  to  put  theory 
into  practice,  trainers  are 
available  to  provide 
assistance  after  a training 


course  has  finished  and  can 
also  work  on  a customer's 
project  to  provide  additional 
assistance. 

• Follow-Up  Training — Further 
assistance  and  follow-up 
courses  are  prepared  after 
researching  the  needs  of 
individual  customers. 

• Training  Consultancy — 
Customers  receive  advice 
about  which  courses  would 
be  most  beneficial  to  their 
company's  needs. 

• Management — Integrata 
jirovides  the  customer  with 
access  to  a training  manager 
who,  for  example,  could 
spend  five  days  per  month 
working  specifically  for  that 
customer.  Work  undertaken 
could  include  systematic 
planning,  implementation 
and  control  of  the  customer's 
IS  training  needs. 

• Computer-Based  Training 
(CBT) — CBT  is  a service 
aimed  at  working  closely 
with  customers  to  provide  an 
optimised  CBT  training 
solution. 

Delivery  of  training  is  achieved 
through  10  branch  offices  in 
Germany,  Integrata's  wholly 
owned  subsidiary  in 
Switzerland,  and  a branch  office 
in  Austria.  Currently,  about  90% 
of  training  revenues  are 
generated  by  activities  in  the 
German  market. 

A brief  summary  of  the  courses 
provided  by  Integrata  is  as 
follows: 


• Technical  courses 

- General  courses;  introduc- 
tory courses  for  experts  and 
IS  users 

- Methods,  Techniques  and 
CASE;  including  MENTOR 
(Integrata's  methods  pack- 
age), PROMPT,  lEW  and 
CASE 

- Languages  and  Program- 
ming; including  COBOL, 
MVS-DUMP,  Assembler,  C, 
and  4GLs 

- DB/DC  Systems;  including 
ORACLE,  Informix, 
ADABAS,  CA-IDMS,  DB2, 
SQL/DS,  IMS  and  DL/1, 
and  CICS 

- Systems  Software;  includ- 
ing IBM  (MVS,  AS/400), 
DEC  (VMS  and  DECnet), 
Siemens  (BS2000  and  EDT), 
UNIX  and  networks 

- Information  Systems; 
including  office  and  admin- 
istration information  sys- 
tems, technical  information 
systems  (PPS,  CIM),  manu- 
facturer-specific informa- 
tion systems  (CON-NECT, 
DATATRIEVE,  IBM 
OfficeVision),  SAP  software 
and  UNIPLEX 

- Information  Management; 
including  data  management 
and  management  informa- 
tion systems 

- Management,  Conduct  and 
Communication 


INPUT 


© 1992  by  INPUT.  Reproduction  prohibited. 


December  1991 


Service  Update 


Sphinx-Level  V — 

An  Independent  U.K. 
Training  Vendor 


• End-user  courses 

- Basics 

- Programming  languages 

- Operating  systems  user 
interfaces 

- Networks,  communication 

- Office  communication 

- Word  processing 

- Databases 

• Academy  for  Information 
Technology  (A.F.I.)  courses 

- Junior  programmer — 
COBOL 

- PC  organiser 

- Data  processing  coordina- 
tor 

- Software  engineer/analyst 

- Data  processing — project 
manager 

- Information  manager 

- DB2 — applications  pro- 
grammer 

- 'C'  expert 

- UNIX  expert 

- OS/2  expert 

- PC-user  qualification  ■ 


December  1991 


Sphinx-Level  V is  a specialist 
training  company  and  is  part 
of  the  Vistec  group.  The 
company  was  formed  by  a 
merger  of  two  companies  that 
each  had  a firm  foothold  in  the 
UNIX  market-place. 

Vistec  is  a large  dealer  operating 
within  the  U.K.  in  the  PC  and 
PC  applications  market.  Annual 
revenues  are  about  $78  million. 

Sphinx-Level  V specialises  in 
providing  flexible  training 
solutions  covering  UNIX/ 
XENIX,  Informix,  Uniplex, 
WordPerfect,  open  systems 
communication,  C 
programming  and  project 
management  courses.  The 
company  operates  primarily 
within  the  U.K.  but  will 
structure  courses  for  the 
European  mainland  on  request. 
At  present,  only  about  2%  of 
training  revenue  is  generated 
from  outside  the  U.K. 

In  addition,  Sphinx-Level  V 
provides  a software  distribution 
service,  which  accounts  for 
about  10%  of  revenues. 

The  reasons  for  the  success  of 
the  company's  training 
operation  are  claimed  to  result 
from  two  key  elements: 

• Meeting  individual 
requirements  within  a 
professional  learning 
environment.  This  factor 


© 1992  by  INPUT.  Reproduction  prohibited. 


includes  a purpose-built 
facility,  located  in 
Maidenhead  in  the  U.K.,  at 
which  class  sizes  are  kept 
small  enough  to  allow 
individual  attention  and 
student  interaction,  and 
which  the  company  feels  is  a 
valuable  element  of  the 
learning  process. 

• Ensuring  that  the  training 
provided  is  practical — a 
critical  element  of  the 
effectiveness  of  training.  Each 
student  is  provided  with  an 
individual  terminal  to  ensure 
hands-on  experience  and  the 
structure  of  the  courses  is 
designed  to  include  a 
practical  approach. 

As  an  alternative  to  its  training 
centre,  the  company  will  also 
provide  on-site  training  when 
the  number  of  students  involved 
is  sufficiently  large. 

The  range  of  courses  offered  by 
Sphinx  is  illustrated  in  Exhibits 
C to  G.  In  addition  to  these, 
Sphinx-Level  V offers  a 
WordPerfect  suite  of  training 
courses. 

The  duration  of  courses  is 
between  1-5  days  and  typical 
prices  range  from  about  $380  for 
a one-day  course  to  $1,725  for 
the  five-day  course. 


Continued  on  next  page 

INPUT 


Service  Update 


6 


Training ..  . from  page  5 


In  commenting  on  the  key  issues 
and  trends  in  the  training  and 
education  market,  Sphinx-Level 
V highlighted  the  following: 

• There  is  a need  for  a public 
body  to  promote  training  and 
stimulate  user  interest,  and,  if 
appropriate,  provide 
assistance  with  funding. 

• It  is  sometimes  difficult  to 
achieve  a balance  between 
providing  a training  service 
that  is  profitable  and  funding 
the  investment  required  for 
new  courses. 

• Training  tends  to  be  very 
much  a reactive  business 
rather  than  proactive  and 
tends  to  be  very  much  a 
project-driven  activity. 


Exhibit  C 

The  UNIX/XENIX  Suite 


• UNIX/XENIX  foundation 

• UNIX/XENIX  foundation  and  Bourne 
Shell 

• SCO  UNIX  installation 

• Bourne  Shell  programming 

• XENIX  installation 

• XENIX  administration 

• UNIX  for  DP  professionals 

• SCO  open  desktop  administration 

• SCO  ODT  developers’  workshop 

• UNIX  market  overview 

Source;  INPUT 


• Companies  should  focus 
training  on  improving  the 
effectiveness  of  existing  skills 
rather  than  on  training  new 
employees.  The  reason  for 
this  opinion  relates  to  the 
fact  that  new  employees 
carry  a higher  risk  factor. 


Exhibit  D The  Informix  Suite 


• Introduction  to  relational  databases 

• Informix — SQL  essentials 

• SQL  for  database  administration 


• Informix — 4GL  for  SQL  users 


• Informix — 4GL  programming 

• Informix  on-line  programming 

• Informix  on-line  administration 

Source:  INPUT 


INPUT 


© 1992  by  INPUT.  Reproduclion  prohibited. 


December  1991 


Service  Update 


7 

Currently,  the  traininj^  revenues 
of  Sphinx-Level  V are  about  $20 
million  per  annum,  excluding 
revenues  from  software 
distribution.  The  apportionment 
of  these  revenues  is  equally 
divided,  about  one-third  each, 
between: 

• UNIX 

• Programming  in  UNIX 

• End-user  applications 

Sphinx-Level  V has  recently 
started  issuing  licences  to 
companies  to  start  training 
centres  in  Germany  and 
Yugoslavia.  ■ 


Exhibrt  F 

The  Communication  Suite 


• open  systems  communication 
overview 

• TCP/IP  and  UNIX 

• X.25  overview  and  workshop 


Source;  INPUT 


Exhibit  G 

The  Programming  Suite 

• OSF  motif  development 

• C programming  essentials 

• Structural  query  language 

• Project  management  overview 

• Software  project  maintenance 

Source:  INPUT 

Exhibit  E 

The  Uniplex  Suite 

• Uniplex  word  processing,  plus  and 
advanced  course 

• Uniplex  spreadsheets 

• Uniplex  database  forms 

• Uniplex  structural  Query  language 

• Uniplex  advance  office 

• Uniplex  administration 

• Uniplex  configuration 

Source:  INPUT 


December  1991 


© 1992  by  INPUT.  Reproduction  prohibited. 


INPUT 


Service  Update 


8 


Nexor  Telub — 

An  Independent  Maintenance 
Acquisition  in  Scandinavia 


On  October  28, 1991,  it  was 
announced  that  Nexor  and 
Telub  were  to  join  forces.  This 
joining  was  achieved  following 
the  acquisition  of  Telub  by 
Nexor  and  results  in  Nexor 
becoming  the  largest 
independent  maintenance 
company  in  Scandinavia. 

Nexor  Service  AB,  a member  of 
Nexor  Gruppen  AB,  acquired 
Telub  Service  AB  for  SK  125 
million  (about  $22  million).  The 
purchase  of  Telub  was  from  the 
parent  company  Datagallerian 
AB,  which  will  acquire  15%  of 
Nexor  Service  AB  in  conjunction 
with  the  transaction. 

Mr.  Sten  Runden,  President  of 
Nexor  Gruppen  and  Chairman 
of  Nexor  Service  AB,  said: 

"VsJe're  launching  a major 
offensive  in  the  middle  of  an 
economic  downturn  in  order  to 
become  a nationwide  and  highly 
competitive  partner  for 
computer  companies  and  users 
alike." 

Nexor  Service  AB  and  Telub 
Service  AB  both  maintain 
nationwide  operations,  and  as 
independent  players  are  not 
link^  to  a specific  computer 
company. 


Nexor  Service  AB,  which  has 
been  active  in  the  service 
industry  for  more  than  20  years, 
has  SK  100  million  (about  $20 
million)  in  sales.  The  company 
has  regional  offices  in  Malmo, 
Orebro,  Gothenburg,  Sundsrall 
and  Stockholm,  the  latter  being 
the  location  of  the  company's 
corporate  headquarters. 

Telub  Service  AB  has  345 
employees,  of  whom  170  are 
located  in  Sweden,  and  expects 
about  SK  230  million  (about  $ 41 
million)  in  sales  in  1991.  Telub 
Service  operates  in  Sweden, 


Norway,  Denmark,  Finland  and 
Germany.  Headquarters  are 
located  in  Vaxjo,  Sweden  and 
the  company  maintains  regional 
offices  in  Malmo,  Stockholm, 
Orebro  and  Umea. 


Mr.  Sten  Runden  further  said: 

"Both  companies  enjoy  a 
healthy  level  of  profitability. 

The  merger  will  allow  us  to 
increase  volumes,  which  will 
ensure  our  long-term 
profitability  and  competitive 
ability." 

Negotiations  with  employee 
labour  unions  are  already  under 
way.  ■ 


Acquisitions 
in  Holiand  too .... 

It  has  also  been  announced  that 
Getronics  Service  is  to  acquire 
KH  Services,  the  largest  Digital 
maintainer  in  Holland.  No 
further  details  are  available  at 
present.  ■ 


"We're  launching  a major  offensive  in 
the  middle  of  an  economic  downturn 
in  order  to  become  a nationwide  and 
highly  competitive  partner  for  computer 
companies  and  users  alike." 

- Sten  Runden 


NPUT 


© 1992  by  INPUT.  Reproduction  prohibited. 


December  1991 


Service  Update 


Compaq  Announces  TRW 
and  GECS  as  Authorised 
Independent  Maintainers 

At  the  beginning  of  November,  Compaq  Computer  Corporation 
announced  the  addition  of  TRW  Customer  Service  Division  and  GE 
Computer  Services  as  authorised  independent  maintainers  of 
Compaq  PCs  and  PC  systems  in  the  U.S. 

The  Compaq-authorised  third-party  maintainer  program  began  in 
1986  and  provides  warranty  services  as  well  as  a broad  range  of 
other  customised  services  to  Compaq  users.  TRW  and  GE  join 
Intelogic  Trace  as  authorised  Compaq  national  service  providers 
with  multivendor  microcomputer  maintenance  solutions.  ■ 

IBM  Announces  the 
Opening  of  the  Software  Mall 

In  mid-November,  IBM  opened  a new  service — Software  Mall. 
Software  Mall  is  an  IBM  Information  Network  Service  available,  for 
a fee,  through  IBMLink.  The  Mall  contains  electronic  outlets  or 
"stores"  operated  by  software  vendors,  providing  services  such  as 
bulletin  boards,  electronic  mail,  electronic  forms,  delivery,  support 
and  upload/download  capabilities. 

The  Software  Mall  service  is  expected  to  assist  independent 
maintenance  organisations  and  users,  who  can  sign  on  to  the  Mall 
service  and  get  the  support  information  needed.  The  service  will 
help  to  decrease  the  time  that  it  normally  takes  to  call  the  help  desk 
and  try  to  explain  the  problem. 

On-line  screens  offer  capabilities  for  ordering  information,  support 
or  supplies,  as  well  as  electronic  delivery  of  any  software  that  can 
be  downloaded  from  the  system.  The  order  form  for  Software  Mall 
is  also  available  on-line,  along  with  information  on  the  offering.  ■ 

INPUT 


December  1991 


e 1992  by  INPUT.  Reproduction  prohibited. 


Service  Update 


10 


Snippets 

*♦*  Infotheek  NV,  the  large  PC  dealer  based  in  the  Netherlands, 
has  gone  into  liquidation  and  called  in  the  receivers  at  the  end 
of  October.  Infotheek  is  estimated  to  be  one  of  the  largest  PC 
dealers  in  Western  Europe  and  the  cause  of  its  financial 
problems  is  claimed  to  be  economic  recession  and  fierce 
competition.  Quest  Automation  PLC,  a U.K.-based  company 
and  subsidiary  of  Infotheek,  has  also  gone  into  liquidation. 

♦♦♦  Granada  Group  PLC,  owner  of  Granada  Computer  Services, 
has  reported  r^uced  profits  for  the  year  end^  September  28. 
Profits  for  the  year  were  down  53%  at  £56.9  million  (about 
$100  million)  on  revenue  that  remained  flat  at  £1392  million 
(about  $2,400  million).  The  chairman  of  Granada  Group  PLC 
described  1991  as  a very  disappointing  year,  saying  that  losses 
in  the  computer  maintenance  arm  of  the  company  and  rental 
losses  in  Canada  have  been  compounded  by  the  recession. 

The  Business  Services  sector,  of  which  Granada  Computer 

Services  is  part,  had  sales  of  £198.8  million  (about  $345 
million),  down  4%  from  the  previous  year.  Granada  now 
claims  that  the  computer  services  division  is  operating 
profitably  after  a £16  million  (about  $28  million)  restructuring 
programme.  Computer  maintenance  revenues  were  up  6%, 
but  high  overheads  increased  the  losses.  John  Curran, 
chairman  of  the  Business  Services  Division,  has  denied  that 
the  division  is  for  sale  and  also  denies  that  any  discussions 
have  taken  place  at  board  level. 

❖ In  the  U.K.,  Sun  Microsystems  is  reshaping  its  indirect  sales 
channels  to  relieve  the  burden  on  its  direct  sales  force.  As  part 
of  the  reorganisation.  Sun  has  severed  its  relationships  with 
one  of  its  main  indirect  sales  partners.  Frontline  Distribution 

Ltd.  Plans  are  to  reshape  the  whole  distribution  strategy  at  the 
beginning  of  1992.  As  part  of  the  new  strategy.  Sun  will 
appoint  eight  Authorised  Business  Centres  to  handle  low-end 
products,  which  will  work  closely  with  its  own  centres  on  a 
geographic  basis.  An  objective  of  the  new  strategy  is  to  allow 
Sun's  direct  sales  force  to  concentrate  on  customers  for  high- 
end  products.  Technology  PLC,  based  in  Warrington  in  the 

U.K.,  will  retain  its  status  as  a Sun  Master  Reseller. 

NPUT 

© 1992  by  INPUT.  Reproduclion  prohibited.  DeCember1991 

Service  Update 


11 


Snippets 


❖ In  the  USA,  TRW  Inc.  is  seeking  a buyer  for  its  large 
independent  computer  maintenance  business.  The  sale  forms 
part  of  a major  restructuring  activity  that  will  see  headcount 
reductions  of  about  10,000.  The  independent  maintenance  arm 
is  not  the  only  business  being  sold.  TRW  Information  Systems 
and  Services  is  also  selling  some  businesses.  In  total,  all  TRW 
businesses  that  are  to  be  sold  represented  1990  revenues  of 
almost  $900  million. 

❖ In  the  U.K.,  AT&T/Istel  Ltd.  is  selling  its  share  in  Failsafe 
ROC  Ltd.,  a disaster  recovery  joint  venture,  to  its  joint-venture 
partner,  Comdisco.  No  further  details  have  been  released. 
Failsafe  ROC  has  an  IBM  3081k  located  in  Manchester  and  an 
ES/9021  Model  720  located  in  London. 

❖ Siemens-Nixdorf  has  signed  a large  OEM  contract  with 
Ungermann-Bass,  a subsidiary  of  Tandem  Computers,  Inc.  The 
agreement  makes  Ungermann-Bass  the  preferred  supplier  of 
local-area  network  (LAN)  equipment  to  Siemens-Nixdorf. 

IBM  Switzerland  has  followed  other  IBM  European  country 
market  subsidiaries  by  implementing  a joint  venture  to  provide 
intelligent-building  solutions  to  customers.  The  concept  is  that 
an  intelligent  building  will  provide  for  a total  information 
technology  infrastmcture,  included  in  the  architecture  of  the 
building.  IBM  Switzerland's  joint  venture  is  called  Intelligent 
Buildings  Systems  & Services.  Partners  in  the  joint  venture  are 
Suter  & Suter  AG,  a construction  consulting  company,  and 
Intelligent  Building  Bouygues  International  SA.  BouyguesSA 
is  the  Swiss  subsidiary  of  IBM  Trance's  partner  in  a similar  joint 
venture. 

❖ In  the  U.K.,  Olivetti  Office  Ltd.  has  launched  a margin 
guarantee  scheme  as  part  of  a plan  to  help  its  dealers  through 
the  current  recession.  The  margin  guarantee  scheme  is  said  to 
provide  a volume-dependent  30%  to  37%  discount  to  dealers. 
The  scheme  is  claimed  by  Olivetti  to  provide  its  100  premier 
dealers  with  more  room  to  negotiate  sales  contracts-^iscounts 
for  smaller  users  while  recouping  profits  from  the  larger 
accounts.  The  reasoning  behind  the  scheme  is  that  dealers  are 
the  primary  sales  channel  on  which  Olivetti  depends,  since  it 
does  not  sell  directly  in  these  markets.  ■ 


December  1991 


O 1992  by  INPUT.  Reproduction  prohibited. 


INPUT 


About  INPUT 


INPUT  provides  planning;  information,  analysis,  and  recommendations  for  the 
information  technology  industries.  Through  market  research,  technology 
forecasting,  and  competitive  analysis,  INPUT  supports  client  management  in 
making  informed  decisions. 

Subscription  services,  proprietary  research/consulting,  merger/acquisition 
assistance,  and  multiclient  studies  are  provided  to  users  and  vendors  of  information 
systems  and  services.  INPUT  specialises  in  the  software  and  services  industry 
which  includes  software  products,  systems  operations,  processing  services,  network 
services,  systems  integration,  professional  services,  turnkey  systems,  and  customer 
services.  Particular  areas  of  expertise  include  CASE  analysis,  information  systems 
planning,  and  outsourcing. 

Many  of  INPUT'S  professional  staff  members  have  more  than  20  years' 
experience  in  their  areas  of  specialisation.  Most  have  held  senior  management 
positions  in  operations,  marketing,  or  planning.  This  expertise  enables  INPUT  to 
supply  practical  solutions  to  complex  business  problems. 

Formed  as  a privately  held  corporation  in  1974,  INPUT  has  become  a leading 
international  research  and  consulting  firm.  Clients  include  more  than  100  of  the 
world's  largest  and  most  technically  advanced  companies. 


INPUT  OFFICES 


North  America 

San  Francisco 

1280  Villa  Street 

Mountain  View,  CA  94041-1194 

Tel.  (415)  961-3300  Fax  (415)  961-3966 

New  York 

Atrium  at  Glenpointe 
400  Frank  W.  Burr  Blvd. 

Teaneck,  NJ  07666 

Tel.  (201)  801-0050  Fax  (201)  801-0441 

Washington,  D.C. 

INPUT,  INC. 

1953  Gallows  Road,  Suite  560 
Vienna,  VA  22182 

Tel.  (703)  847-6870  Fax  (703)  847-6872 


International 

London 
INPUT  LTD. 

Piccadilly  House 

33/37  Regent  Street 

London  SWIY  4NF,  England 

Tel.  (071)  493-9335  Fax  (071)  629-0179 

Paris 

INPUT  SARL 

24,  avenue  de  Recteur  Poincare 
75016  Paris,  France 

Tel.  (33-1)  46  47  65  65  Fax  (33-1)  46  47  69  50 

Frankfurt 
INPUT  LTD. 

Sudetenstrasse  9 

D-6306  Langgons-Niederkleen,  Germany 
Tel.  (0)  6447-7229  Fax  (0)  6447-7327 

Tokyo 

INPUT  KK 

Saida  Building,  4-6 

Kanda  Sakuma-cho,  Chiyoda-ku 

Tokyo  101,  Japan 

Tel.  (03)  3864-0531  Fax  (03)  3864-4114 


r 


p', 


INPUT 

Service 

Update 


Route: 


C INPUT  1986. 


A Monthly  Publication  from  INPUTS  Customer  Service  Program 


April,  1986 


ITT  SERVCOM  ACQUIRES  BELL  & HOWELL  TPM... 

Although  details  of  the  deal  are  yet  to  be  released,  ITT ' s SERVCOM 
maintenance  division  has  struck  an  agreement  with  BELL  & HOWELL  to  acquire 
its  third-party  maintenance  business.  The  merger  will  expand  ITT’s 
service  employee  base  by  approximately  1,000  support  people. 

***5^  ******* 

DEC  EXTENDING  Tl^O-HOUR  RESPONSE  OFFERING... 

dec's  announcement  of  a two-hour  response  time  for  its  recently  released 
VAX  8800  has  been  extended  to  include  two  other  higher-end  VAX  models  — 
the  8600  and  8650.  The  accelerated  response  commitment  is  available  to 
user  sites  located  within  50  road  miles  from  a DEC  service  location  in  the 

U.S. 

************ 

INTERACTIVE  VIDEO  TRAINING... 

A recent  survey  of  major  manufacturers  revealed  that  the  use  of  "interactive 
video"  as  a training  tool  is  becoming  increasingly  popular.  DEG  is  currently 
offering  the  most  extensive  courseware  to  customers  with  self-paced 
instruction  in  a variety  of  "Generic  Courses"  on  relevant  general  interest 


1943  Landings  Drive,  Mountain  View,  CA  94043.  (415)  960-3990 


topics.  Combining  videodisc  presentations  of  material  and  the  use  of 
"DECtouch"  monitors  (utilizing  resistive  membrane  technology)  the  student 
can  view  and  review  course  information,  and  respond  to  questions  appearing 
on  the  screen  by  touch.  DEC  is  currently  in  the  process  of  developing  a 
more  extensive  line  of  this  type  of  video  for  customer  training,  and  has 
reportedly  been  using  it  internally  for  some  time.  Both  HEWLETT-PACKARD  and 
HONEYWELL  are  also  internally  developing  and  using  interactive  video 
technologies  for  release  in  the  near  future. 

DICTAPHONE  ENTERS  TPM  MARKET... 

DICTAPHONE  Corporation  recently  announced  its  entry  into  third  party 
maintenance  with  its  QSD  — "Quality  Service  by  Dictaphone"  — program. 
They  will  initially  provide  support  for  PCs,  word  processors,  and  micro- 
driven  systems,  along  with  telecom  and  other  peripheral  equipment.  The 
program  will  initially  be  targeted  toward  office  system  vendors  without  a 
field  service  organization  of  their  own,  and  will  tailor  maintenance  plans 
to  their  and  their  customers'  needs.  DICTAPHONE'S  Customer  Service  division 
currently  has  approximately  900  field  service  employees  in  200  locations 
nationwide . 

************* 

DATACHECKER  TO  PROVIDE  NATIONWIDE  THIRD  PARTY  SUPPORT... 

Working  with  its  sister  company,  National  Advanced  Systems,  DATACHECKER/DTS 
will  now  offer  service  on  a variety  of  vendors'  equipment  throughout  North 
America.  DATACHECKER/DTS'  service  organization  currently  consists  of  600 
technicians  and  support  people  in  approximately  41  internationally  located 
service  sites. 


2 


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************ 

CIE  NAMES  SPERRY  AS  PRIMARY  MAINTENANCE  CONTRACTOR... 

Sperry's  third  party  maintenance  division  will  be  adding  CIE  products  to 
its  list  of  brands  serviced,  starting  with  CIE's  new  Matrix  and  Tri- 
printer lines.  The  Matrix  models  CI-300+  and  -600+,  plus  the  Tri-Printer- 
3500  will  replace  the  CI-300  and  -600  line.  SPERRY  personnel  will  be 
installing,  maintaining,  and  supporting  the  line  throughout  the  U.S. 

************* 

HONEYWELL  TO  PROVIDE  SUPPORT  FOR  PERTEC  LINE... 

PERTEC  COMPUTER  CORPORATION  has  named  HONEYWELL  as  its  authorized  U.S. 
service  vendor  for  the  System  3200  and  SABRE  lines.  Under  the  three-year 
agreement,  HONEYWELL  will  be  providing  installation  and  maintenance  support 
on  the  machines,  including  work  necessary  during  the  90-day  warranty 
period,  provided  the  user  contracts  for  service  within  30  days  of  purchase. 
The  onsite  service  provided  by  HONEYWELL  is  available  as  two-hour,  four-hour 
and  next-day  response,  and  is  to  be  available  in  eight  major  metropolitan 
areas  before  year  end. 

************* 

SORBUS  TO  MAINTAIN  DATASOUTH  PRINTERS... 

DATASOUTH  Computer  Corporation  has  selected  SORBUS  as  its  authorized 
maintenance  agent  for  their  line  of  IBM  corapatable  printer  equipment.  A 15% 
discount  on  SORBUS  support  is  offered  to  DATASOUTH  customers  purchasing  a 
12-month  support  agreement,  within  ten  days  of  purchase  of  their  printer. 
SORBUS  will  be  maintaining  DATASOUTH' s Systems  34,36  and  38  and  IBM  3270 
compatable  units. 


3 


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***5^  ******** 

TRW  ACQUIRES  CIRCLE  COMPUTER  SERVICES... 

TRW  has  added  CIRCLE  COMPUTER  SERVICES'  on-site  IBM  maintenance  and  computer 
refurbishing  service  to  its  national  field  service  network.  Specializing 
in  support  to  computer  leasing  firms  , CIRCLE  was  formed  in  1972  by  its 
president,  Joseph  Conroy.  Mr.  Conroy  will  remain  director  of  the 
corporation's  technical  and  refurbishing  facilities  in  Schaumburg,  Illinois. 

************* 

MORE  SPECIFICS  OF  NEW  DEC  WARRANTY... 

A few  more  specifics  were  released  on  DEC's  recently  announced  one-year 
warranty  offering;  particular  issues  addressed  were... 

Does  the  warranty  cover  any  peripherals  as  well  as  the  CPU? 

...No,  only  the  controller  is  covered  under  the  year-long  agreement. 

Does  the  customer  have  to  purchase  DECservice  in  order  to  qualify? 

...No,  all  purchasers  of  the  unit,  regardless  of  their  choice  of  post- 
warranty coverage,  qualify  for  that  level  of  support  for  their  first 
year  of  service. 

Is  the  operating  system  software  also  covered  for  one  year? 

...Purchased  software  retains  the  same  warranty  coverage  as  before  the 
new  offering  was  introduced. 

************* 

CDC  TO  MAINTAIN  DEC  S0F'n>?ARE . . . 

A newly  released  service  offering  by  CONTROL  DATA  CORPORATION'S  Professional 
Services  group  provides  users  of  DEC  operating  systems  and  product  set 
software  with  both  up-dates  and  remedial  maintenance  on  their  systems.  In 


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addition  to  on-site  service  and  telephone  support,  training  and  consulting 
assistance  will  be  available.  Currently  the  support  package  is  available  in 
three  cities  nationwide  — Boston,  Washington  DC,  and  Chicago  — and 
geographic  coverage  is  expected  to  expand  as  needs  dictate. 

************ 

DC  EXPAND  SOFTWARE  SUPPORT  STANDARDS... 

Current  users  of  DATA  GENERAL'S  Software  Product  Service  Agreement  will  now 
be  supported  under  an  enhanced  package  — Support  Plus.  The  new  standard  of 
on-site  service  (previously  available  as  an  option)  and  access  to  24-hour  on- 
line information  on  DG's  hardware  and  software  systems  will  be  available 
automatically  to  current  users;  new  subscribers  will  be  able  to  obtain  the 
extended  support  for  an  average  cost  of  $700  (Eclipse  MV  with  AOS/VS). 

************ 

FLEXIBLE  FEE  PC  MAINTENANCE  OPTIONS... 

A survey  across  top  vendors  revealed  that  only  one  TPM  company  currently 
offers  flexible  pricing  programs  to  its  PC  customers.  CDC ' s "Flexible 
Fee"  provides  standard  maintenance  for  the  customer  for  a period  of  a year 
at  fees  reduced  from  straight  contract  maintenance  prices,  with  the 
agreement  that  additional  fees  as  scheduled  will  be  levied  per  incident. 

This  "Flexible  Fee"  program  allows  users  to  choose  an  option  which  lies 
between  the  security  (and  expense)  of  a full-coverage  service  contract  and 
the  gamble  of  paying  for  maintenance  on  a per-call  basis. 

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PC  WARRANTIES:  TANDY  vs  AT&T... 


Both  AT&T  and  TANDY  Corporation  are  currently  providing  a 90-day  warranty  on 
their  comparable  PC  models  (the  ATT-6300  and  TANDY'S  3000,  both  with  hard 
disks).  TANDY  offers  warranty  work  through  its  dealers,  providing  depot 
repair  for  the  90-day  term;  should  the  user  contract  for  on-site  post- 
warranty support  at  the  time  of  purchase,  TANDY  will  upgrade  the  depot 
service  to  on-site  work  during  the  warranty  term.  AT&T's  90-day  warranty 
coverage  is  provided  through  mail-in  service  for  their  6300  unit;  it  is 
reported,  however,  that  warranty  support  on  their  upscaled  6300-plus  is 
performed  on-site,  with  a coverage  term  of  one  full  year  — one  of  the  most 
comprehensive  warranty  coverages  offered  in  the  PC  market.  Fees  for 
contracted  post-warranty  warranty  runs  as  follows: 

on-site  depot 

AT&T  6300-003  = 512K  memory  

1.2MB  diskette  $43. 50/month  $28. 30/month 

20MB  hard  disk 

TANDY  3000  = 512K  memory 

360KB  diskette  $43 . 50/month*  $21 .60/month* 

+20MB  hard  disk  +$ 15 . 90/month*  +$  7.90/month* 

=$59.40  total  =$29.50  total 

*Tandy  pricing  quoted  as  annual  charge;  these  figures  are  the  AMC  fee 
divided  by  12  months. 

************* 

COMDISCO:  SALES  AND  SERVICE  OF  USED  IBMs 

COMDISCO  Incorporated  is  an  Illinois-based  remarketer  of  used  IBM  computer 
equipment,  specializing  in  large  systems  and  magnetic  storage  devices. 
Dealing  in  the  sale,  lease,  and  refurbishment  of  these  units,  the  company 
also  acts  as  an  IBM  maintenance  broker,  offering  support  from  IBM  personnel 
at  up  to  20%  discounts  on  IBM  contract  prices.  This  service  is  available 
both  to  systems  owned  by  the  user  or  leased  from  COMDISCO.  The  company 
presently  has  16  locations  in  the  U.S.  and  an  additional  10  worldwide. 


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************ 

DATA  TECH/RELIANCE  ADDS  TO  REFURB  CAPABILITIES... 

DATA  tech/reliance  has  recently  announced  the  addition  of  QUANTUM  disks  to 
its  list  of  refurbished  products.  The  520,  530  and  540  models  are  used  in 
ALTOS,  ALPHA  MICRO  and  DEC ' s PDP  and  MicroVAX  systems;  refurbishment  of  the 
units  was  previously  available  only  through  the  manufacturer.  All 
reconditioning  of  the  disks  will  carry  a 180  day  warranty. 

************ 


MORE  ON  DISK  REFURBISHMENT... 

A follow-up  to  the  January  and  February  list  of  companies  providing  disk 


reconditioning . . . 


TRANS  DATA  CORPORATION Belmont,  CA 

PERIPHERAL  SERVICE  PRODUCTS  Carlsbad,  CA 

H & M DISK  DRIVE  SERVICES Anaheim,  CA 

PREMIER  COMPUTER  CORPORATION  Minneapolis,  MN 

RESTORE  MAGNETICS  San  Jose,  CA 


(415)  591-5705 
(619)  438-8381 
(714)  385-1146 
(800)  432-3475 
(408)  946-9207 


************ 


...input's  service  update  is  a monthly  publication  highlighting  industry 
issues  of  interest,  as  reflected  by  clients'  inquiries  to  our  hotline 
staff.  To  learn  more  about  what  we  have  to  offer,  call  our  Mountain 
View,  CA  office  at  (415)  960-3990  8AM  to  5PM  PST,  or  leave  a message  with 
our  VoiceCom  message  service  at  (415)  544-2338. 


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INPUT 

Service 

Update 


Route: 


e INPUT  1986. 


A Monthly  Publication  from  INPUT'S  Customer  Service  Program 


May  1986 


Supermini  User  Service  Needs  Continue  to  go  Unmet  . . . 

While  superminicomputer  vendors  improved  system  reliability  in  an  attempt  to  meet  the 
extremely  high  system  availability  requirements  of  their  users,  user  dissatisfaction  with  many 
critical  service  components  continues  to  effect  overall  satisfaction  with  supermini  service  and 
support.  Initial  results  of  the  1986  superminicomputer  user  service  requirement  analyses 
indicate  that,  according  to  users,  vendor  performance  in  the  areas  of  engineer  skill  level  (for 
both  hardware  and  software)  and  spare  parts  availability  continue  to  miss  the  mark.  The 
inability  of  supermini  vendors  to  satisfy  user  needs  in  these  areas  have  opened  the  door  to 
third-party  encroachment  as  the  TPM  market  continues  to  target  this  area  as  a high-growth 
market. 

INPUT  will  begin  shipping  the  results  of  the  superminicomputer  user  survey  to  clients  of  the 
Large  Systems  and  Small  Systems  modules  in  June.  Manufacturers  analyzed  include  Concurrent 
Computer,  Gould,  DG,  DEC,  AT&T,  Prime,  IBM,  Tandem,  and  HP. 

MDS  Service  Becomes  Momentum  Technologies  . . . 

MOHAWK  DATA  SYSTEMS'  Service  Division  recently  announced  their  purchase  from 
MDS/QUANTEL,  manufacturer  of  QUANTEL  business  systems.  Maintenance  and  support  will  be 
provided  by  MOMENTUM  SERVICES,  one  of  the  four  divisions  under  MOMENTUM  TECHNOLOGIES' 
corporate  administration  (including  MOMENTUM  Systems,  Credit  Corporation,  and 
Manufacturing  groups),  focusing  on  providing  complete  "single-source  service  for  a wide 
variety  of  computer  and  communications  equipment"  and  networks.  Based  in  Parsippany,  New 
Jersey,  MOMEMTUM  SERVICES  provides  nationwide  support  through  their  800-member 
service  staff. 


1943  Landings  Drive,  Mountain  View,  CA  94043.  (415)  960-3990 


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Page  two/INPUT  Service  Update 


"Exclusive"  Service  and  Warranty  Agreements  . . . 

A recent  survey  of  leading  third-party  maintenance  vendors  showed  little  standardization  in  the 
treatment  of  "exclusive"  service  arrangements  with  manufacturers.  During  the  warranty 
period  of  the  product,  all  TPMs  require  compensation  from  the  manufacturer,  since  the  end  user 
receives  support  at  no  charge  during  this  time.  Some  TPMs  require  that  the  manufacturer 
compensate  them  on  an  hourly  charge  (usually  the  prevailing  T&M  rate),  or  fixed  price  per 
incident  basis.  Other  companies  require  that  the  manufacturer  purchase  "service  contracts"  up 
front  covering  support  for  the  duration  of  the  warranty  for  each  product  shipped.  Most  TPMs 
negotiate  the  type  of  compensation  they  are  to  receive  when  they  first  approach  (or  are 
approached  by)  the  manufacturer,  thus,  no  TPM  utilizes  one  warranty-compensation  technique 
exclusively.  In  the  past,  TPMs  were  required  to  provide  financial  compensation  to  the 
manufacturer  for  service  performed  after  the  warranty  (in  a sense,  a "finder’s  fee"  for  new 
business).  While  this  practice  still  continues,  growth  in  the  stature  of  the  TPM  industry  has 
encouraged  some  of  the  larger  TPMs  to  drop  such  a requirement  in  "exclusive"  service 
agreements,  reasoning  that  the  TPMs'  service  capabilities  are  benefit  enough  for  the 
manufacturer. 

Dealer  Perks  for  TPM  Contract  Sales  . . . 

Policy  regarding  compensation  packages  offered  to  dealer/distributors  for  sales  of  third-party 
maintenance  contracts  shows  little  consistency  across  top  TPM  vendors.  Although  the  most 
common  form  of  compensation  is  straight  forward  commission  on  the  sale  of  each  contract,  the 
level  of  additional  incentive  varies  widely. 

DEC'S  "Service  Sales  Agent"  program  offers  the  most  comprehensive  package  in  addition  to 
commission  on  first-year  contracts.  Sales  assistance  by  way  of  assignment  of  a DEC  account 
manager,  available  for  coordination  and  support  of  the  dealer's  force,  is  provided  along  with 
tangible  sales  tools,  including  sales  training  and  DEC  service  brochures. 

MOMENTUM  (formerly  MDS)  provides  a variable  commission  based  on  the  level  of  service 
contract  sold  (i.e.,  higher  for  standard  service  and  lesser  for  basic  or  depot  contracts)  paid  as  a 
percent  of  the  sales  quarterly.  In  addition,  the  dealer  can  earn  additional  incentives  at  year  end 
by  exceeding  a pre-determined  sales  quota. 


©1986  by  INPUT.  Reproduction  Prohibited. 


INPUT 


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Page  three/lNPUT  Service  Update 


HONEYWELL'S  "Service  Sales  Representative"  program  allows  dealer/distributors  (and  eligible 
manufacturers)  to  act  as  a HONEYWELL  TPM  contract  sales  agent,  providing  comparable 
first-year  contract  commission  incentives. 

TRW  reportedly  provides  no  compensatory  arrangements  to  dealers  for  sales  of  TPM  contracts, 
but  rather  works  in  an  arrangement  where  dealers  purchase  any  contacts  to  be  included  in  the 
sale  directly  from  TRW;  no  commissions  or  compensation  to  the  dealer  are  involved. 

Providing  Support  for  Major  Accounts  . . . 

Providing  support  for  a customer  with  a considerable  installation,  whether  the  machines  are 
installed  at  a major  single  site  or  at  installations  across  the  country,  requires  special 
consideration.  A look  at  contending  manufacturers'  policies  regarding  such  customers  revealed 
varied  methods  of  handling  the  consessions  and  coordination  of  the  accounts. 

DG's  "Cluster  Discount"  program  provides  large  installations  with  scheduled  discount  on 
contract  pricing,  provided  the  machines  reside  at  a single  site.  DEC  provides  allowance  to  large 
installations  by  way  of  a "Major  Site  Credit"  program,  basing  the  amount  credited  on  the  total 
monthly  contract  charge  (for  monthly  maintenance  fees  totaling  $8,000-16,000,  a 5%  credit 
is  allowed:  $16,500-25,000  is  refunded  15%;  over  the  $25,000  mark,  customers  receive  a 
20%  credit).  To  qualify  for  the  credit  program  the  units  involved  must  be  installed  within  a 
five-mile  radius  of  each  other  and  be  covered  on  a single  maintenance  contract. 

GOULD  provides  special  consideration  for  their  national  customers  through  assignment  of  a 
"national  accounts  manager"  who  provides  a single  contact  for  the  customer  for  any  service  or 
sales  questions  or  problems  that  may  arise.  Any  discounting  provided  to  the  customer  is 
regotiable  between  the  two  companies. 

PRIME'S  policy  regarding  such  large,  national  accounts  is  similarly  situational  regarding  cost 
savings-an  installation  with  a "master  contract"  including  all  units  involved  can  be  provided 
with  discounts  negotiated  by  size.  Similarly,  an  account  manager  is  assigned  to  handle  all 
service  issues  encountered  by  the  customer. 


©1986  by  INPUT.  Reproduction  Prohibited. 


INPUT 


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Page  four/INPUT  Service  Update 


IBM's  Test  on  Volume  Discounts  . . . 

A recent  query  posed  to  IBM  regarding  their  policy  on  maintenance  discounting  brought  up  their 
oft-questioned  "EMA"  (Enterprise  Maintenance  Agreement).  IBM  reported  that  the  EMA 
arrangement  was  a test  (accounting  for  industry  confusion  over  inconsistencies  in  the  program's 
availability)  and  now  has  been  completely  withdrawn  from  the  marketplace.  Accounts  involved 
in  the  original  test  will  be  served  under  the  discounted  agreement  through  term.  The  program  is 
now  going  through  the  evaluation  process  and  IBM  reports  no  current  offering  of  volume 
discounts  beyond  those  scheduled  and  published  for  their  PCs. 

T&M  Specifics  . . . 

Confusion  over  the  defining  parameters  of  time  and  material  charges  for  IBM  and  NCR  prompted 
a question  regarding  the  actual  billable  time  of  a call.  IBM  bills  their  per-call  customers  for 
travel  time  from  point  of  origin  to  the  customer's  site,  and  actual  time  to  repair-i.e.,  "portal 
to  portal."  NCR's  policy  is  not  quite  so  clear  cut-if  the  customer  is  under  a maintenance 
contract  but  requires  per-call  service  outside  of  their  principle  coverage,  charges  begin  to 
accrue  as  the  technician  leaves  for  the  site  (portal  to  portal  is  billable).  If  the  user  is  not 
covered  by  an  NCR  contract  but  is  a per-call  customer  in  the  usual  sense,  then  they  are  charged 
at  T&M  rates  for  only  the  actual  time  to  repair.  In  addition  to  this,  a travel  expense  is  levied  as 
a flat  rate  by  20-mile  zone  radiuses.  NCR  minimizes  the  expense  for  customers  by  pro-rating 
the  total  travel  expense  between  the  number  of  customers'  sites  visited  for  maintenance  on  any 
given  trip. 

Government  Discounting  TPM  . . . 

Discounting  maintenance  pricing  from  public  commercial  rates  for  government  contracts  has 
been  a topic  of  interest  throughout  the  past  month.  Of  the  top  third-party  maintenance  vendors, 
the  difference  in  the  amount  of  this  discount  granted  to  GSA  customers  runs  between  3-4%  on 
average-TRW  cutting  commercial  rates  by  6.35%;  SORBUS  discounting  prices  as  low  as  10% 
for  government  accounts. 


©1986  by  INPUT.  Reproduction  Prohibited. 


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Page  five/INPUT  Service  Update 


IBM's  "TPM"  Announcement  . . . 

Early  this  month  IBM  announced  their  agreement  to  offer  support  to  non-IBM  personal 
computer  products.  The  coverage  (contractable  only  as  an  amendment  to  IBM  on-site  repair) 
includes  only  the  removal/replacement  of  another  vendor's  unit  causing  failure  of  the  IBM 
system  under  contract;  no  repair  or  problem  diagnosis  of  the  foreign  machine  will  be  provided. 
The  limited  number  of  non-IBM  products  which  IBM  has  previously  agreed  to  provide  support 
for  (e.g.,  certain  EPSON  printers)  are  not  eligible  for  this  support  which  can  be  amended  to  the 
IBM  PC  service  contract  for  a $30  per  system  unit  annual  charge. 


UNIX  Hotline  Support  . . . 

An  inquiry  as  to  the  going  rates  across  top  manufacturers  for  telephone  support  for  UNIX 
software  revealed  that  HP  is  the  only  contender  currently  offering  such  service.  Neither  IBM 
nor  SPERRY  make  hotline  phone  support  available  to  customers,  but  DG  has  plans  to  provide  the 
support  in  the  near  future.  The  service  provided  by  HP  (for  users  of  the  integral  PC)  is 
available  at  a $45  per  call  fee. 


•k  * * * -k 


INPUT'S  SERVICE  UPDATE  is  a monthly  publication  highlighting  industry  issue  of  interest  as 
reflected  by  clients'  inquiries  to  our  hotline  staff.  To  learn  more  about  what  we  have  to  offer 
call  our  Mountain  View,  CA  office  at  (415)  960-3990,  8 A.M.  to  5 P.M.  PST,  Monday  through 
Friday,  or  leave  a message  with  our  VoiceCom  message  service  at  (415)  544-2338. 


©1986  by  INPUT.  Reproduction  Prohibited. 


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Service  = 

Update  ^ 

A Monthly  Publication  from  INPUTS  Customer  Service  Program 

June  1986 

Minicomputer  User  Service  Market  Demonstrates  Marked 
Inconsistency  . . . 

Perhaps  a reflection  of  the  squeeze  that  traditional  minicomputer  products  are  experiencing  as 
manufacturers  are  introducing  powerful,  low-cost  mainframes  at  the  upper  end  and  increasingly 
sophisticated  supermicros  at  the  lower  end  of  their  lines,  minicomputer  users  are  reporting 
inconsistent  service  from  their  vendors.  While  certain  vendors,  such  as  Hewlett-Packard,  are 
delivering  service  at  levels  that  meet  the  overall  requirements  of  their  users,  other  vendors  are 
not  faring  so  well.  Moreover,  the  range  of  user  requirements  for  service  in  this  market  is 
expanding  rapidly,  making  it  much  more  difficult  for  service  vendors  to  offer  service  at  a level 
that  satisfies  the  majority  of  their  users  at  an  acceptable  cost. 

INPUT  will  begin  delivering  the  first  analyses  of  traditional  minicomputer  products  service  in 
July. 

IBM  Announces  Increased  Service  Offerings  On  Non-IBM 
Peripherals  . . . 

IBM  now  lists  both  carry-in  depot  and  on-site  exchange  and  repair  prices  on  a select  new  group  of 
PC-compatible  peripherals.  The  support  will  be  provided  through  IBM's  national  service  fleet  and 
network  of  IBM  Service/Exchange  Centers,  and  pricing  is  subject  to  discount  under  the  IBM 
Volume  Maintenance  Agreement.  Here  is  a partial  list  of  products  now  serviceable  by  IBM  support 
personnel;  other  brands  include  AST,  Emulex,  Amdek,  DCA... 


1943  Landings  Drive,  Mountain  View,  CA  94043.  (415)  960-3990 


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Page  two/INPUT  Service  Update 


VENDOR 

PRODUCT 

SUPPORT* 

PRIQ^ 

Hewlett-Packard 

Thinkjet  Printer 

lOE 

$130 

CCE 

$115 

Epson 

FX100+  Printer 

lOE 

$120 

CCE 

$105 

Okidata 

ML931  Printer 

lOE 

$190 

CCE 

$130 

Hayes 

Smartmodem  1200 

lOE 

$110 

CCE 

$95 

Tecmar 

PC  Host  Card 

lOR 

$55 

CCR 

$50 

Hercules 

Color  Card 

lOR 

$45 

CCR 

$35 

*IOR 

CCR 

lOE 

(XE 


IBM  on-site  repair 
Customer  carry-in  repair 
IBM  on-site  exchange 
Customer  carry-in  exchange 


Vendor  Specifics  on  Spare  Parts  Deals  . . . 

Policies  that  affect  the  convenience  of  purchasing  (or,  in  turn,  the  necessity  of  stocking)  spare 
parts  by  end  users  can  reflect  a vendor's  philosophy  on  maintenance  and  where  the  responsibility 
should  lie.  Here  is  an  in-depth  look  at  some  of  the  top  mid-range  manufacturers'  approaches  to 
the  specifics  that  impact  a user's  ability  to  procure  spares... 


HEWLETT-PACKARD,  in  conjunction  with  their  "Cooperative  Support  Program,"  is  among  the 
vendors  making  it  relatively  easy  on  customers  to  purchase  spares  for  their  units.  Users 
participating  in  the  Cooperative  Support  Program  are  provided,  as  part  of  that  service,  a spare 
parts  catalog  to  consult  when  planning  or  placing  orders  and  a toll-free  hotline  by  which  orders 
can  be  placed.  The  catalog  is  also  made  available  to  distributors,  dealers,  and  TPM  parties  joining 
the  program.  All  spares  carry  a warranty  against  defects  in  materials  and  workmanship  for  a 
90-day  period,  and  various  discounts,  based  both  on  dollar  volume  per  order  and  unit  volume  per 
item,  are  available. 

Of  more  specific  conditions  of  the  sale,  there  is  reportedly  no  minimum  charge  per  order 
. required-emergency  expediting  is  available  (fee  dependent  on  circumstances),  customers  pay 
freight  on  the  orders,  and  restocking  charges  may  be  levied  on  returned  spares. 


©1986  by  INPUT.  Reproduction  Prohibited. 


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Page  three/INPUT  Service  Update 


DEC  has  a similar  program  for  self-maintaining  customers,  and  likewise  provides  a free  catalog  of 
spares  to  members,  including  third-party  maintenance  companies.  Orders  can  be  placed  via  a 
toll-free  number.  Discounts  are  available  under  DEC'S  Standard  Volume  Agreements  for  orders 
exceeding  $1,000  list.  Participating  "Shared-Maintenance"  customers  with  critical  down 
situations  are  guaranteed  response  on  the  status  of  their  order  within  3 hours  and  delivery  within 
24  hours  when  part  is  in  DEC  stock.  A $100  fee  is  charged  for  the  expediting,  however,  and 
restrictions  on  use  (both  in  frequency  and  size  of  order)  apply.  Normal  delivery  times  vary  from 
15  days  up  to  6 months,  part  specific.  Warranties  are  provided  on  all  spares  ranging  from  30 
days  to  1 year. 

DEC  provides  delivery  F.O.B.  DEC  plants,  but  can  arrange  to  prepay  for  shipment  and  bill  if 
customer  prefers.  There  is  no  minimum  dollar  requirements  on  spares  orders. 

GOULD  also  publishes  a spare  parts  catalog  at  no  charge,  but  distributes  it  only  to  direct  customers 
and  field  sales  representatives.  A toll-free  number  is  accessable  to  place  orders,  with  an  average 
delivery  time  of  120  days.  Discounts  based  on  unit  volume  are  available,  up  to  10%  on  unit  price 
for  100-plus  units  purchased  on  an  order.  Emergency  expediting  at  a 10%  (or  $100,  whichever 
is  greater)  fee  is  offered  for  critical  situations-24-hour  turnover  is  promised. 

As  most  other  vendors,  Gould  warrants  spare  parts  for  a 90-day  period.  A $100  minimum 
restriction  is  placed  on  orders  and  restocking  charges  restrict  the  return  of  ordered  parts. 

DATA  GENERAL  had  provided  users  with  both  a catalog  and  toll-free  hotline  for  spares  ordering  up 
until  1983.  Currently,  orders  are  placed  by  calling  DG's  main  office  for  assistance.  No 
discounting  is  offered  on  spares  orders,  which  must  be  of  $50  minimum  amount  to  be  filled,  and 
the  parts  are  under  warranty  for  only  30  days.  Policy  on  emergency  expediting  is  not  firm: 
overnight  shipment  will  be  provided  if  the  part  is  in  stock  with  reportedly  no  extra  charge. 
Average  delivery  time  on  spares  orders  is  30  days  with  DG  prepaying  then  billing  customer  for 
the  freight.  Restocking  charges  are  set  at  15%  of  unit  price  for  spares  returned  with  a reorder  of 
like  parts:  30%  is  charged  if  there  is  no  subsequent  reorder. 

HONEYWELL  reports  that  they  are  currently  restructuring  their  spare  parts  program,  but 
currently  provides  no  catalog  to  facilitate  spares  ordering.  A toll-free  number,  however,  is 
available  to  provide  assistance  in  ordering,  and  delivery  can  be  expected  within  three  to  four 
weeks  if  part  is  in  stock.  Delays  of  up  to  26  weeks  are  possible  if  the  parts  must  be  special 


©1986  by  INPUT.  Reproduction  Prohibited. 


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Page  four/INPUT  Service  Update 


ordered  by  Honeywell.  All  parts  are  under  warranty  against  defects  for  90  days. 

Emergency  expediting  is  handled  on  a case  by  case  basis,  minimum  order  amount  is  $100,  and 
shipping  is  pre-paid  and  billed  to  the  customer.  Honeywell  will  only  levy  a restocking  charge  if 
the  returned  part  was  of  special  purchase. 

PRIME  has  a nebulous  policy  regarding  the  sale  of  spares  to  users.  A catalog  is  published  but  is  for 
internal  use  only  and  provides  no  toll-free  access  to  the  ordering  of  spares.  Parts  are  warranted 
for  45  days  and  delivery  time  on  orders  runs  an  equal  month  and  a half.  Ordering  policy  requires 
no  minimum  purchase  per  order  and  emergency  fulfillment  is  available  with  no  specific  charges 
associated  with  the  overnite  turnaround.  No  discounts  are  offered  to  spare  parts  purchasers. 


Repair  to  Purchase  Comparison  on  Boards  . . . 

A recent  inquiry  across  three  manufacturers'  depot  repair  rates  for  a range  of  boards  revealed  the 
following: 


List 

Depot  Repair 

Maintenance  as 

Price 

Rate 

Percent  of  Purchase 

CPU  Board: 

DATA  GENERAL 

$4,242 

$270/incident 

6.4% 

CONCURRENT 

$8,338 

$700/incident 

8.4% 

Memory  Board: 
DATA  GENERAL 

$3,800 

$298/incident 

7.8% 

CONCURRENT 

$9,000 

$405/incident 

4.5% 

Peripheral 
Controller  Board: 

DATA  GENERAL 

$3,660 

$239/incident 

4.5% 

CONCURRENT 

$9,775 

$450/incident 

6.5% 

PRIME'S  rates  for  repair  were  also  in  question--they  provide  no  service  by  carry-in  or  mail-in 
depot  repair. 


©1986  by  INPUT.  Reproduction  Prohibited. 


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Page  five/INPUT  Service  Update 


Hotline  for  Hardware  Support  . . . 

Telephone  consulting  support  availability  has  become  a standard  feature  of  many  vendors'  normal 
hardware  maintenance  contract  coverage.  But,  of  manufacturers  surveyed-including  DEC,  Data 
General,  Gould,  Honeywell,  and  Prime--one  will  provide  users  with  the  service  without  the 
purchase  of  a full  on-site  service  contract.  Hewlett-Packard's  "Technical  Assistance  Service" 
(TAS)  agreement  offers  self-supportive  users  technical  backup  through  phone-in  consulting, 
available  between  8 A.M.  and  5 P.M.,  Monday  through  Friday,  with  coverage  extentions  to  6 and  7 
days  per  week,  16  to  24  hours  daily;  uplifts  range  from  10%  to  40%.  TAS  also  provides  the 
customer  with  a Hardware  Subscription  Service  with  manual  updates  and  "Service  Notes"  and 
"Computer  Maintenance"  newsletters  notifying  of  changes  pending  and  procedure  revisions. 
On-site  service  calls  are  not  a provision  of  the  TAS  agreement,  but,  when  provided  as  needed  on  a 
per-call  basis,  TAS  customers  receive  improved  response  times  at  standard  per-call  rates. 


Support  Offered  by  Modem  Manufacturers  . . . 

Interest  last  month  in  service  delivery  modes  of  telecom  vendors,  especially  manufacturers  of 
modems,  prompted  the  contact  of  the  following  companies  about  their  support  offerings: 

GENERAL  DATACOM  provides  users  with  repair  service  through  both  yearly  contractual 
agreements  and  on  a per-call  basis.  Service  is  performed  by  GD  personnel  on  customer  site  and  is 
contractually  available  eight  hours,  Monday  through  Friday,  extendable  up  to  "24/7" 
(24-hour/7-day)  coverage. 

RACAL-MILGO  will  also  provide  on-site  support  to  users  and  offers  a depot  support  option. 
Contract  customers  can  choose  8/5  coverage  over  the  year  term  or  secure  24-hour/7-day 
coverage  on  on-site  repair.  Discounts  for  large  single-site  installations  are  available.  Depot 
service  is  provided  as  repair  or  replace  (at  R-M's  option)  of  the  defective  unit.  Non-contract 
customers  can  requisition  a R-M  field  engineer  at  current  time-and-material  rates  during  prime 
hours. 


©1986  by  INPUT.  Reproduction  Prohibited. 


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e>\>c^ 


Page  six/INPUT  Service  Update 


GANDALF  also  offers  on-site  and  depot  support  via  yearly  maintenance  contracts  and  will  provide 
non-contract  service  at  an  hourly  rate.  On-site  repair  can  be  contracted  as  8/5  or  24/7 
coverage.  Depot  service  is  delivered  through  mail. 

CIS  DATACOM  equipment  can  be  serviced  by  depot  repair  at  the  manufacturing  site  or  maintained 
at  the  user  site  through  contractual  coverage  with  CTS  dealers/distributors.  CIS'  depot  support 
pricing  is  structured  on  a per-incident  basis. 

DATAGRAM'S  maintenance  provision  policy  is  at  this  time  in  a state  of  flux  as  the  vendor  closes  a 
TPM  support  deal.  DATAGRAM  modems  are  currently  supported  by  extension  of  the 
manufacturer's  warranty,  providing  defective  units  with  a replacement.  Customers  not  desiring 
to  extend  the  year's  warranty  can  receive  repair  of  their  units  on  a per-incident  basis  through 
Datagram. 


★ * ★ ★ ★ 


INPUT'S  SERVICE  UPDATE  is  a monthly  publication  highlighting  industry  issues  of  interest  as 
reflected  by  clients'  inquiries  to  our  hotline  staff.  To  learn  more  about  what  we  have  to  offer 
call  our  Mountain  View,  CA  office  at  (415)  960-3990,  8 A.M.  to  5 P.M.  PST,  Monday  through 
Friday,  or  leave  a message  with  our  VoiceCom  message  service  at  (415)  544-2338. 


©1986  by  INPUT.  Reproduction  Prohibited. 


INPUT 


r1 


L .',4.  lOfiEsrotrn }-<^  ‘ /.ay  R'v  'icciqLi:  "/"(V/b  brtf  '•tJd  t'4l)ti  ^JAOHAjD  ., 

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' >'  ■»  ‘f:iD  I I'- ; ■ 5T0  jqisv^voo  IftnIbsiJno?)  'Igudid'  tA 

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figtir/'ft;  v '’?’^  M.q  * .M.A  fi  .oe^R^ae  (St^)  tfi  aoil^o  AD  ,vw.V  rftcilrnx^  wo  !lr,o 

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♦/! 


Route: 


INPUT 

Service 

Update 


O INPUT  1986. 


A Monthly  Publication  from  INPUTS  Customer  Service  Program 


July  1986 


Vendor  Data  on  Over  100  TPM  Companies  Analyzed  . . . 

Collection  of  data—including  support  specifics,  service  revenue  figures,  and  organizational 
information-for  INPUTS  1986  Service  Vendor  Profiles— Third-Party  Maintenance  report  has  been 
completed,  and  delivery  of  the  first  profiles  of  the  directory  can  be  expected  in  early  August.  More 
than  100  companies  nationwide  have  been  interviewed  for  the  directory  with  20  industry  leaders 
targeted  for  in-depth  corporate  and  strategic  discussion  in  the  report.  A number  of  these  top  20 
vendors  are  slated  for  inclusion  in  this  first  set  of  profiles  and  additional  shipments  can  be 
expected  by  clients  as  the  profiles  are  completed. 


Single  Source  Support  by  Vendors  . . . 

Learning  to  accommodate  the  needs  of  clients  with  mixed-vendor  systems,  while  at  the  same  time 
gaining  service  revenues  at  the  expense  of  these  competing  vendors,  many  manufacturers  are 
formalizing  what  are  in  essence,  third  party  support  offerings  to  their  customers.  Although  the 
willingness  to  maintain  other  vendors'  equipment  is  the  basis  of  such  "maintenance  management" 
arrangements,  most  manufacturers  providing  the  service  prefer  to  view  it  more  as  a "full  support 
concept"  than  a marketed  maintenance  offering... 

AT&T,  in  an  effort  to  expand  their  range  of  services  to  major  business  customers,  announced  the 
provision  of  Integrated  Service  Management  (ISM)  to  select  accounts  mid-year  1985.  ISM  is  based 
on  the  single-source  approach  to  large  installations,  offering  select  customers  one  point  of 
contact  for  the  design,  administration,  and  maintenance  of  multiple  vendor  systems.  Project 
implementation,  technical  consulting,  and  site  operations  management  can  be  provided,  and 
although  AT&T  has  been  quoted  as  . . . "not  in  the  third-party  maintenance  business,"  ISM  by 
definition  includes  maintenance,  on  select  case-by-case  basis,  of  customer-owned  non-AT&T 
equipment.  The  offering  is  not  strictly  defined  by  AT&T,  and  its  availability  is  a function  of  the 
individual  account  and  customer. 


DATA  GENERAL'S  term.  Maintenance  Management,  defines  more  a softening  of  corporate  philosophy 
than  a marketed  service  product.  Previously  having  been  more  exclusive  in  support  provided,  DG 
will  now  offer  assistance  to  customers  who  adopt  non-DG  units  into  their  systems,  either  through 

1943  CA  9^0^  960-3990 


INPUT 


, 1 ,1 


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Page  two/lNPUT  Service  Update 


direct  service  on  the  machines,  or  by  way  of  coordination  of  recommended  support  vendors' 
service.  Taking  a passive  approach  to  any  marketing  of  Maintenance  Management,  the  service  is 
provided  to  customers  specifically  requesting  such  support,  and  decisions  on  availability  are 
situational,  as  well  as  dependent  on  volume. 

CDC  is  a third  vendor  approaching  field  service  with  the  single  source  concept  in  mind,  but  with  a 
more  defined  offering  marketed  as  a formalized  support  product.  Single  Source  Service,  a 
comprehensive  hardware  and  network  maintenance  program,  provides  mixed-vendor  site  managers 
with  one  point  of  contact  for  all  system  component  needs  in  both  remedial  and  preventive 
maintenance.  As  outlined  in  CDC  marketing  literature,  the  offering  appears  to  be  more  focused  on 
actual  physical  maintenance  of  systems  than  on  the  consulting  and  administration  aspects  of 
system  management,  as  is  AT&T's  ISM,  for  instance.  But,  CDC's  competitive  prominence  in  the 
third-party  maintenance  arena  legitimizes  their  emphasis  on  this  aspect  of  maintenance 
management,  allowing  them  to  draw  upon  the  reputation  and  experience  of  their  TPM  division  in 
this  offering  to  CDC  manufactured  equipment  customers  as  well. 

Other  manufacturers  providing  forms  of  single  source  maintenance  to  users  include  DEC, 
Honeywell,  and  NCR.  IBM's  recent  concession  to  (albeit  limited)  third-party  servicing  as  officially 
announced  last  month,  reinforces  the  industry  trend  toward  accommodation  of  the  market  demand 
for  more  flexible  support  from  system  vendors. 


DEC  to  Supply  Free  Support  for  Memory  . . . 

DEC  has  recently  announced  a plan  to  offer  on-site  service  at  no  charge  for  memory  units  added  on 
to  VAX  8600  and  8650  systems.  An  effort  to  make  DEC-manufactured  incremental  memory 
products  more  economically  attractive  to  system  owners,  the  support  is  made  available  to  any 
8600/8650  users  who  have  contracted  with  DEC  for  on-site  service  on  the  VAX  unit. 


Compensation  for  the  Weekend  FE  . . . 

Four  manufacturers  were  recently  surveyed  as  to  their  FE  pay  practices  for  weekend  work,  both 
scheduled  and  on-call.  These  variations  on  the  "time-and-a-half"  pay  standard  were  found... 

MEMOREX  offers  no  differentiation  from  regular-hours  pay  to  their  FEs  working  by  schedule  on 
Saturdays  and  Sundays.  FEs  working  more  than  the  normal  40-hour  week  are,  of  course, 
compensated  through  receipt  of  overtime  pay  at  time-and-a-half  that  of  their  normal  rate. 


©1986  by  INPUT.  Reproduction  Prohibited. 


INPUT 


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Page  three/INPUT  Service  Update 


DATA  GENERAL  reportedly  does  not  schedule  FEs  for  Saturday  and  Sunday  work,  but  the  technicians 
can  be  on-call  over  weekends.  Time-and-a-half  is  paid  to  FEs  who  are  called  out  to  service  on 
Saturdays;  double-time  compensates  for  Sunday  work. 

NAS  utilizes  shift-differentials  in  the  compensation  of  their  FEs.  If  an  engineer  is  scheduled  to 
work  on  a weekend  day,  s/he  receives  their  regular  hourly  rate  of  pay  plus  an  added  amount  for 
working  that  shift.  Should  the  FE  be  on-call  and  have  to  go  into  the  field  over  a weekend,  the  rate 
of  pay  increases  as  if  s/he  were  performing  overtime  work-time-and-a-half  compensation  is 
offered  for  work  on  Saturdays  and  double-time  is  paid  on  Sundays  and  Holidays. 

CDC  also  allows  for  shift-uplifts  in  their  FE  pay  structure,  offering  a percentage  salary  increase 
for  any  FEs  scheduled  for  "non-standard  work  weeks."  If  the  engineer  is  regular 
Monday-through-Friday  personnel,  but  is  on-call  over  any  weekend,  the  engineer  is  compensated 
through  time-and-a-half  for  Saturday’s  work  and  at  double  their  wage  for  time  on  Sundays. 


Service  on  Discontinued  Displays  . . . 

Where  does  a customer  look  for  support  of  a unit  once  production  of  that  unit  has  been  halted?  A 
recent  inquiry  as  to  the  support  policies  of  some  of  the  top  workstation  manufacturers  showed 
few  stringent  guidelines  on  the  issue,  but  ample  coverage  of  service  availability  as  well  as  spares 
to  satisfy  most  users... 

AT&T  reports  a policy  of  a five-year  span  of  active  responsibility  for  their  workstations,  as  well 
as  equal  coverage  on  telecomm  and  other  computer  products.  Support  is  made  available  for  that 
five  years  beyond  the  date  of  product  withdrawal,  and  spare  parts  for  the  unit  will  remain  in  stock 
during  that  period. 

The  HARRIS  Corporation  has  set  practice  relevant  to  the  maintenance  of  such  units  only  as  their 
retained-inventory  policy  applies.  HARRIS  will  keep  parts  for  a minimum  of  seven  years  after 
purchase  of  the  component;  it  follows  that  any  product  line  discontinued  would  still  have  some 
spares  available  for  a maximum  of  seven  years  within  which  this  parts  policy  applied.  As  far  as 
actual  situations  regarding  the  subsequent  service  of  discontinued  units,  the  company  reports  that 
such  products  have  been  known  to  be  retained  under  HARRIS  care  for  four  or  five  years  beyond  line 
discontinuance. 

ITT  COURIER,  another  leader  in  the  workstation  market,  practices  a seven-year  responsibility  to 
discontinued  product  users.  The  company  promises  support  availability,  as  well  as  spare  parts 
stocking  for  the  full  seven  years  after  the  station's  removal  from  the  market. 


©1986  by  INPUT.  Reproduction  Prohibited. 


INPUT 


^..  ■)<,  .1.-  ; • v^b: . ' '0?ii  '.^  !'!1'130  AT’AO 

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Page  four/INPUT  Service  Update 


TELEX  reports  no  stated  policy  regarding  either  parts  retention  for  units  withdrawn  from  the 
market,  or  the  availability  of  their  service  beyond  the  honoring  of  the  term  of  any  current 
maintenance  contracts  out  on  the  units.  Although  the  company  offers  no  defined  promise  to  retain