Now all but inaccessible there, Unix is the Eastern Bloc’s number one priority, according to Gerard Bloch-Morange, assistant to the president of Bull International SA and the man who is co-ordinating Groupe Bull’s affairs with its brand new joint venture in Hungary. Unix – because it’s a world standard and networking, he says, top the Bloc’s shopping list, an itch the French aim to scratch in the long term. Last month, Bull’s chairman Francis Lorenz in company with French president Franois Mitterrand travelled to Hungary to sign the papers allowing Bull to set up a joint venture with Videoton. Morange describes Videoton as a sizeable Hungarian electronics concern that did $400m last year off of its 3000-man computer side, 80% of it deriving from sales to the Soviet Union. That accord has now blossomed into a 49% Bull-controlled holding company called simply Societe Franco-Hungroise d’Informatique, the Franco-Hungarian Computer Company. An operating company formed out of the pieces of Videoton’s existing computer operations will follow.

Mother Russia

Bull is hoping this entity will vault it into the nascent and potentially lucrative Eastern European markets, particularly East Germany, Czechoslovakia and Hungary itself – but primarily Russia where Videoton has a special position. Under the discredited Five Year Plan economics of the Comecon countries, not only was the output of all goods of each country dictated ahead of time, but so was the destination of those goods. The Soviet Union, being rich in commodities such as oil, natural gas and timber agreed to export these to its western satellites in return for the pick of those countries’ industrial output. In vain might the Hungarians protest that they needed all the computers that their own restrictive five-year plan said they might make right there at home in Hungary: you want our oil, Mother Russia dictated, you send us most of your computers. As a result, according to the Frenchman, Videoton, which, it was also decreed decades ago, would specialise minicomputers rather than mainframes, is one of perhaps two or three companies with a sales and service apparatus servicing the Soviet Union where it has already installed about 1,000 systems. It has permanent offices in places like Moscow, Kiev and Leningrad and even makes maintenance calls in Siberia. With this kind of springboard, Bull figures the joint venture could be doing $100m in revenues within five years, a projection Morange rates as very optimistic. –

By Maureen O’Gara

As an entity, Morange noted, Videoton – like most things behind the Iron Curtain – is about 40 years old and divided into three main activities. One arm is dedicated to consumer electronics like televisions and hi-fi. Another does professional electronics like radio communications. The third manufactures and sells minicomputers along with peripherals such as terminals and printers. For the last two or three years it has also assembled some micros out of Asian-made parts. Bull’s new relationship with Videoton has historic roots. Under an old technology exchange, Videoton’s minicomputers are based on the old Mitra line, inherited by Bull when it acquired SEMS, the minicomputer company created by Thomson SA out of the old Telemecanique Informatique Solar mini business and the Mitra arm of Compagnie Internationale pour l’Informatique, adapted to Eastern markets and usually used in industrial and manufacturing settings. The relationship was such a positive one that on one occasion, Videoton was able to display at the Hannover Fair an advanced model of the Mitra built of Motorola 10800 ECL bit slices that would not appear in its licensor’s product line for another six months. How did a chip as advanced as an ECL slice the same part was the building block for the Sperry 1100/60 mainframe – get past the CoCom watchdogs? Whoever believed that CoCom was watertight? Right now, Bull and Videoton are still in the planning phase. Morange says it will be June before they have a business plan and it will take a year of detailed discussions before the joint

venture is full-blown and operating on a regular basis. To reach that goal, they figure that they’ll look over what Videoton is currently doing and jointly decide what to move over to the joint venture. Videoton will keep some of its computer operations out of the French deal and discontinue others that conflict with Bull’s merchandise. Bull in turn will purchase direct sales where it can, Morange said. It’s intended that the new company will assemble new products from Bull’s current product line. And Bull may subcontract to Videoton some assembly work such as monitors or terminal concentrators that it already sources from outside, buying back the end result.

Jerry-built Unix

On the table as far as new products go are Bull’s proprietary GCOS 7 mainframes, its Unix machines and Zenith Data Systems’ personal computers. One of the most serious hurdles to overcome is the pitiful state of Videoton’s production facilities and the way its manufacturing is organised. On the other hand, Morange reports that both the Hungarians and the Russians have a high degree of technical sophistication and competence. In fact, Bull technicians have noticed that Videoton already has either a jerry-built or bootlegged Unix-like system that Morange says Videoton will stop selling, because it’s very buggy and out-of-date. Bull, of course, hopes to be able to substitute its own Unix systems but currently the US-dominated CoCom organisation in Paris that rides hard on what the rest of the world can export to the East still forbids the sale of Unix and any hardware above the AT to Comecon countries. But following the meeting in Paris earlier this month, CoCom could shortly alter its stance. An official decision is expected in June and it is now believed that CoCom will then sanction the sale of this now-forbidden gear to at least Hungary, Poland and Czechoslovakia – an expectation that may explain why DEC recently formalised a joint venture of its own in Hungary. Bull estimates the joint venture exercise will cost the partners a maximum of $100m over two years. At least that’s what’s currently proposed. Morange allows it could be less, it could be more and it does not necessarily mean $50m apiece in cash. It could be the equivalent in technology. Once the venture is up and functioning however, there’s still the problem of penetrating the market with its different perceptions of what is needed and the varying nature of the local economic systems.