If Compagnie des Machines Bull SA did not have the promise of regular postal orders for almost unimaginable sums from its rich uncle the French government to tide it over its regularly recurring financial crises, it would long ago have had to file for bankruptcy protection from its creditors – but even with the massive new sums – $1,400m or so is the latest subvention being bandied about in Paris, it is difficult to see a thriving commercial future for the flagship computer company into which so many hopes and so much hard cash from the long-suffering French taxpayer have been sunk. A quick analysis of IBM Corp concludes that the company has a mainframe business that has become a millstone, a services business of doubtful profitability and prospects, a workstation business still too small to have any real impact on the company’s bottom line, a disk business that has yet to learn how to compete in the bloody cockfighting pit that is the OEM disk drive market, a chip business that remains embryonic when it comes to selling parts to non-captive customers, and a personal computer business that is racking up volume like there was no tomorrow, on margins so slim that one wonders whether it really will have a tomorrow. That leaves out the AS/400 business, the undeniable jewel in the company’s crown, and the one that supporters fear will not get the kind of focussed attention it needs until it is too late to save it. What does one find if one carries out the same exercise on Bull?
Rapidly vanishing
A mainframe business where most of the hardware is made in Japan by a company whose enthusiasm for mainframes is rapidly vanishing. A mainframe business moreover that has two completely incompatible architectures and operating systems, one 36-bit, the other 32-bit. A mid-range business that consists of Unix systems and servers supplied by IBM, a company that has for the past two decades been regarded within Bull and the French administration – almost the same entity – as the Great Satan of the multinational world. An OEM peripherals business now consisting of printers of various types that are almost invisible on the market. And a personal computer business that again on its own would be in the bankruptcy courts by now were it not for the Elysee guarantee. Oh, and a services operation that is chasing the chimera of competing in the software and systems integration market in a country that has the biggest, most experienced and longest-established computer services sector in Europe. The idea that a tyro like Bull can compete profitably in any reasonable period of years against a company like Cap Gemini Sogeti SA – when even Cap Gemini is going through hard times right now, stretches credulity well beyond breaking point. Bull’s only asset is the goodwill of the French public sector, which would like to buy from the national champion if at all possible. But in the Brussels-decreed age of open tendering and at a time when the bloated French public sector is having to get leaner and fitter to replenish the depleted treasury with privatisation receipts, the prospect of Bull winning the share of business to which it has been accustomed, let alone win it profitably, seems remote indeed.
Delusions of grandeur
How has all this come about? The answer, ultimately, comes down to politicians and civil servants believing that they can run something as intricate and unpredictable as a computer company better than any industrialist, coupled with delusions of grandeur and a hubristic pursuit of La Gloire, which persuaded Bull to rush to buy Honeywell Information Systems when Honeywell put it on the block – at a time when NEC Corp, which relied on the US company for its international mainframe sales, was more than happy to settle for no more than a 15% stake – and one that, after five years, was so devalued that it converted into only 4.7% of the parent when Bull moved to mop up the minority. France had a personal computer industry once – but the impossibility of competing with the state-subsidised dinosaur meant that one by one, the private compan
ies collapsed into bankruptcy, to be rescued by Bull and very soon thereafter, disappear. The personal computer end of Bull was so run down by the end of the 1980s that the company went out and bought a new one – Zenith Data Systems – and found it so difficult to run that the company was soon racking up losses faster than it was making personal computers. Now it looks as if, in the wake of the Zenith alliance with Packard Bell Electronics Inc, all the personal computer plants will have to be closed and the machines sourced from Packard Bell’s various plants and suppliers. The only big, diversified companies that have made a real success of the Unix business are those that embraced it at a time when it still seemed a containable threat to all proprietary systems, and stuck to a consistent strategy – one complex instruction set family followed by a RISC-based one. The obvious examples are Hewlett-Packard Co and ICL Plc – 68000 in each case, and then Precision Architecture and Sparc respectively. Siemens Nixdorf Informationssysteme AG can be taken as an exception in that its constituents have built Unix systems around 68000, NS32000 and iAPX-86 before finally settling on the R-series RISC, but it has stuck to that one, and the company anyway is hardly a shining example of success. The ones that have scarcely got started are the ones that have jumped from one RISC to another, and so, having decided on R-series as its Unix RISC, Bull could hardly have found a less promising partner than IBM, which had come late to Unix after really not believing in it, and had a RISC that was not even established in the market. An R-series user such as mainframe partner NEC – was the obvious candidate, but when the choice came down to IBM or Hewlett-Packard, it had to be no contest – so the politicians chose the wrong one. Why was Bernard Pache fired as chief executive when he had only taken the post – drafted from the French state coal board of all places – in the summer of 1992?
Doomed to go down
Because he was doing a lousy job? Well no, not exactly: it was simply that he was an appointee of the previous administration. Today, Bull is little more than a massive state-funded job preservation scheme – and the protracted politicking over how it is to be bailed out is causing customers to drain away in droves, so that if the latest cash subvention ever gets approved in Brussels – which seems inconceivable – it will be even less worth salvaging, if that were possible. The tragedy is that real people with valuable skills and experience – people that could have been winning France a prominent place on the world computing stage had they been employed by genuinely commercial private sector companies – are doomed to go down when the Bull ship finally sinks under its own contradictions – and because of all the cash that has been squandered keeping Bull alive, those French private sector companies don’t exist to employ them. The vast new round of final state funding is intended to dress Bull up for privatisation – would you buy a criminally misused computer company from those people?
