The Friday Interview: Niamh Spelman, Fujitsu Siemens Ireland

11 Jun 2004

“We’re number three; we try harder.” That could be the motto of Niamh Spelman (pictured), managing director of Fujitsu Siemens Ireland. In a market dominated by US computer giants Dell and HP, Fujitsu Siemens is the European computer upstart looking to grab a larger piece of the pie.

So far, it seems to be achieving just that. According to IDC figures, the computer firm’s business in Ireland grew by 70pc versus an overall market growth of 13.3pc during the first quarter of 2004. Growth was strongest in its notebook business (86pc compared with 39pc for the overall market) and commercial desktops (88pc versus slight decline in overall market).

As a result Fujitsu Siemens’ market share has grown across the board: 5.9pc in desktops, up from 3.8pc in the first quarter 2003; 7.6pc in the notebook/mobile segment, up from 5.7pc; and 5.5pc in business notebooks, up from 4.4pc.

“All of the milestones set out at the start of the year have been achieved,” says Spelman with satisfaction. “There is an onwards and upwards mood within Fujitsu Siemens at the moment.”

Spelman attributes the strong performance to two things: customers’ faith in the quality of Fujitsu Siemens technology and the success of the company’s channel strategy, which, she says, continues to receive strong support from its community of distributors and resellers.

The company splits its market in three main groupings: corporate customers, SMEs and consumers. The company’s core business is enterprise computing which will account for about 50pc of its revenues in 2004. Its corporate customers include Aughinish Alumina, EBS Building Society, Kerry Group and Jefferson Smurfit Group.

Public sector customers form an important subset of its enterprise business and account for between 15 and 20pc of the company’s overall revenues. Dealing with the public sector requires a different approach, notes Spelman. “Public sector customers are extremely price sensitive – not surprisingly, perhaps, because they go through such a rigorous process in terms of tendering etc. They are also very risk averse and put a significant emphasis on the partnerships they have and the type of vendors they want to work with.”

Clearly, one of the things that large customers like about Fujitsu Siemens is its size: the Irish organisation is part of a European business that employs 7,000 people and has a turnover of €5.3bn.

Fujitsu Siemens was formed in 1999 as a full-line IT infrastructure supplier from mobile devices to high-end servers and storage solutions. In areas it does not have its own technology it partners with companies with do.

“We focus on best of breed,” Spelman explains. “Where we have a superior technology that’s where we focus in terms of development. Where we believe there is another product that we fits well within our range, such as EMC in storage, that’s what we go for.”

Perhaps the most significant technology partnership that the company has announced recently was the news that it was to join forces with Sun Microsystems to jointly develop and market the next generation of Ultra-Sparc-based server technology. Spelman believes that the partnership will benefit all sides. “It’s great news for our customers and an endorsement of the message we’ve been bringing to market about the performance of PrimePower [Unix server] particularly in the mid range and high end. Obviously, there’s also an element of security for our customers about our access to the Solaris releases. There’s no ambiguity about the product map.”

While Spelman is more than pleased with the performance of PrimePower and other products within its mission critical computing offering, she is less happy with the performance of its Intel-based Primergy server business which she describes as “disappointing”. Putting this business back on track is one of her priorities for the remainder of the year. One of the ways she plans to do this is by cross-selling the technology to existing enterprise customers, the theory being that the company’s credibility in the Unix space will rub off on its Intel server business.

In pushing its Intel server business, Fujitsu Siemens is being squeezed by the might of Dell and Hewlett-Packard, who are both aggressively targeting the corporate sector. Spelman acknowledges that Dell has been particularly successful at selling its ‘value’ message even if, as she attests, “price perception and price reality are two very different things.”

Another product falling into the ‘slow-to-shift’ category is the Fujitsu Siemens Pen Tablet PC, sales of which have been so sluggish that they have barely registered on the overall performance of the company’s mobile product category. In its defence, Spelman says the tablet was never touted as a successor to the laptop and it would remain something of a niche product, perfect for certain applications but lacking in mass market appeal.

Fortunately, mass appeal is something that most of the company’s other product lines have had in spades and Spelman is confident that the good times will continue to roll for the hardware giant.

By Brian Skelly

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