To: freeus who wrote (33414 ) 3/9/1998 9:47:00 PM From: jbn3 Read Replies (1) | Respond to of 176387
Wang's growth may help out DELL DELL's maintenance partner expands in crucial European, Asian markets By Jerry Mahoney Austin-Statesman Staff ROUND ROCK -- With its new name and expanded reach, Wang Global may become a bigger deal for Dell Computer Corp. Wang, which already handles Dell's maintenance work in Europe, said last week that it plans to buy the computer services subsidiary of Olivetti SpA in a deal valued at $390 million. The subsidiary, Olsy SpA, will expand Wang's reach in Asia and in Europe, which is emerging as a key growth market for Dell. The company's European sales were nearly $1 billion in the recently completed fourth quarter, up 61 percent from the year-earlier quarter. Olsy employs about 9,000 worker in Europe, which is six times Wang's current European work force. With the acquisition, the company is changing its name from Wang Laboratories Inc. to Wang global. Reporting 1997 sales of more then $2 billion, Olsy's clients include banks, public utilities and retail buisnesses in 40 countries. Olsy, which has 12,000 employees around the world, specializes in a range of information technology services, including maintenance, computer-system design and installation, network integration and intranet service. "You have to be global or partner with people who have their feet on the street in foreign markets," said Thomas Browne, who follows Wang for Prudential Securities. To meet demand in Europe, Dell plans a $250 million expansion of its manufacturing and sales and service facilities in Ireland this year. The manufacturing plant in Limerick builds machines only for Dell's European customers. The Wang-Olsy deal, which has been in discussion since last fall, was greeted with enthusiasm by Dell officials. "We believe that acquisition will add significant capabilities to Wang in Europe," said Dell spokesman Rick Scott. Dell is under pressure from PC industry analysts and investors to respond to Compaq Computer Corp.'s planned acquisition of Digital Equipment Corp. That merger, valued at more than $9 billion, will elevate Compaq, based in Houston, into the top tier of full-service computer companies that can provide and install a wide-range of computers, program them to work together over widely dispersed networks and maintain them. Analysts say that's an important strategy for Compaq because the lucrative multi-million accounts with global corporations require such one-stop shopping. Dell officials have said their strategy of partnering with such companies as Wang and Electronic Data Systems corp. to serve Dell clients -- rather than create large service operations inside the company -- achieves the same ends. Dell has service agreements with Digital but the future of those is questionable because Dell and Compaq are fierce competitors. "Dell has time to make a move, through acquisition or growing internally or continuing to outsource for services," said Gene Ramirez of Southwest Securities. "Wang has moved up the food chain," he said of the Olsy acquisition. "That just positions the company for stronger relationships with Dell, especially as Europe opens up for them." From Austin American Statesman, Monday, March 9, 1998 TechMonday, page D2. 3.