Don’t call it a comeback; they’ve been here for years! Yes, literally almost 150 years, yet very few people today outside of government and certain other sectors can say exactly what Unisys does.
Well, they’re working on that. Last year, the company hired turnaround specialist Peter Altabef as CEO to help restructure the once mighty IT services and products company that kind of lost its way.
Unisys traces its roots back to the founding of American Arithmometer Company (later Burroughs Corporation) in 1886 and the Sperry Gyroscope Company in 1910. Unisys predecessor companies also include the Eckert–Mauchly Computer Corporation, which developed the world's first commercial digital computers, the BINAC and the UNIVAC.
In September 1986 Unisys was formed through the merger of the mainframe corporations Sperry and Burroughs, with Burroughs buying Sperry for $4.8 billion. The merger was the largest in the computer industry at the time and made Unisys the second largest computer company with annual revenue of $10.5 billion. At the time of the merger, Unisys had approximately 120,000 employees. In addition to hardware, both Burroughs and Sperry had a history of working on U.S. government contracts. Federal government agencies have remained among the largest customers for Unisys’ hardware, software, and services.
However, soon after the merger, the market for proprietary mainframe-class systems—the mainstream product of Unisys and its competitors such as IBM—began a long-term decline that continues, at a lesser rate, today. Although IBM might dispute that claim, as it continues to turn out new mainframes almost annually.
Yet, in response to the downturn in the mainframe business, Unisys made the strategic decision to shift into high-end servers such as 32-processor Windows servers, as well as information technology (IT) services such as systems integration, outsourcing, and related technical services, while holding onto the profitable revenue stream from maintaining its installed base of proprietary mainframe hardware and applications.
Enter the Turnaround
But, after several years of gradual decline in revenue hanging on to its traditional market segments – amid the current “Decade of Disruption”—Unisys appointed Altabef as the new Unisys president and CEO on January 1, 2015 with a mandate for growth. Altabef was named based on his track record of launching or turning around under-performing businesses. He has held CEO or senior leadership positions at MICROS, Perot Systems and Dell Services.
Immediately, Altabef addressed and prioritized the disruptive changes in IT -- cloud computing, mobility, big data analytics, security and the consumerization of technology among them. He designed and implemented a new operating model to be a more nimble, focused and responsive company well positioned to serve a "consumerized" business and government mindset. Unisys would focus on bringing innovative, differentiated solutions in the newer growth categories to address clients' most pressing business and technology problems.
“Unisys is a very important company; it is integral to the history of information technology and technology in general,” Altabef told eWEEK. “It’s a company that still has remarkable people and really important technology, but they had stopped growing. I took the challenge to come in and run the company because I thought there were a huge amount of assets there and by refocusing it I knew we could get growth and increase value for our clients.”
Altabef said he looks at companies in terms of three matrices: What do they do, who their clients are and where do they do it? He said he saw that Unisys was cutting edge in end user services and had strong offerings in cloud, business transformation outsourcing and its businesses.
“We have clients in the technology business in the clearinghouse space that clear $1.3 trillion a day,” he said. “We have built and operate with customs and border protection, a technology system that does analysis around people entering the country that processes 1.3 billion transactions and 60 billion queries a day. So the company had really important tech skills and assets. There is not a definition of big data that that does not completely exceed. So our data analytics capability is extraordinarily deep."
But what it was missing was the second focus of who their customers were, Altabef said. Unisys had evolved into a horizontal provider of services, rather than a provider of services that was d looking deeply at the industry problems of their clients on an integrated basis and selling integrated solutions.
“So that’s really the primary thing that we have done since I have joined... taking that technology and those assets and going deeper and broader, but also going a little narrower in looking at specific industries and really focusing,” he said.