Service-centric Bull cuts off own services arm

A change of corporate strategy leaves Bull UK selling off the division it most wanted

Within the next few days, the French IT company Groupe Bull will finalise the sale of its British Integris division to a rival, Steria. Unfortunately for Bull UK, during the time that the sale has taken to go through, the company has made a volte face and plans to concentrate on just exactly the area it is selling off -- services. The sale was set in motion by Groupe Bull's previous chief executive, Guy de Panafieu, who during 2000 and 2001 responded to poor results with a strategy of paring back to the company's "core" business -- mainframes running its GCOS operating system, Unix boxes from IBM and NET systems produced in partnership with NEC, which owns a large part of Groupe Bull. In late 2001, Panafieu was replaced by Pierre Bonelli, who is taking the opposite strategy -- cutting the cost base and planning to grow the services business. Bonelli's regime is laying off 1,500 staff around the world, taking the company down to about 10,000 worldwide. Selling the services business is exactly the opposite of what Bonelli wants, but he has only been able to undo the deal in Italy. The French branch of Integris was never up for sale and remains part of Bull. The UK branch of Integris is a loss -- it was Bull's biggest service business outside France, and its sale takes about 1,700 people to Steria, leaving Bull UK with a rump of 250 people. "We will have a good relationship with Integris-Steria," said Michael Dunk, a former Integris sales director who will become the UK chief of Bull. "We are suppliers to each other and have customers in common. But our corporate strategy is eventually to compete with Steria." While Integris will get major systems integration contracts in the public sector, where Bull has mainly operated, Bull will hope to perform the architecture and design parts of many contracts. Dunk believes there will be a 13 percent growth in public sector IT expenditure in the UK this year, and his division has been set a target of 20 percent growth in the second half of 2002. "Waves of local authorities need to meet the government's demand for electronic government by 2005," he said. Bull already has 100 local authorities on its customer list.


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