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Technology Stocks : Data General Corp. "dgn" -- Ignore unavailable to you. Want to Upgrade?

To: Terry D who wrote (243)	8/19/1998 10:48:00 AM
From: Terry D	Read Replies (1) \| Respond to of 354

Data General shifting focus Gearing up Clariion unit to rival EMC, others By Joann Muller, Globe Staff, 08/18/98 Just as it appeared Data General Corp. was drifting back toward oblivion, the onetime technology giant is again trumpeting its turnaround, with a renewed emphasis on its Clariion computer storage division. The Westborough computer company is pumping resources into the Clariion unit in a bid to compete more effectively with storage industry giants such as EMC Corp. of Hopkinton. Data General has some catching up to do. The company suffered a setback earlier this year because of a production delay in launching its next generation of computer storage equipment. As a result, sales of the new systems, featuring advanced so-called fiber channel technology, didn't grow fast enough to offset the decline in storage systems that used an older technology. ''We lost a year's worth of growth in the market,'' conceded Joel Schwartz, appointed four months ago as senior vice president and general manager of Clariion. Data General has lost money during the past two quarters, and is expected to fall short of break-even again in the current quarter, which ends in September, according to analysts polled by First Call Inc. of Boston. On June 1, the company announced a restructuring charge of $135 million for the quarter ended in June and said it would lay off 400 workers. Schwartz contends that production problems have been resolved and Data General is now shipping a complete line of fiber channel products. Once a giant in the minicomputer industry, Data General missed the shift to desktop computers. But the company revived itself in 1995 by moving to servers based on Intel Corp.'s Pentium microprocessors. After two years of improved results, the company fell behind competitors earlier this year because of the slowdown in its storage business. Now, Schwartz says Data General has a technology edge over companies like EMC that will enable Data General to make up ground quickly. All computer storage manufacturers are moving toward fiber channel technology because it allows users to transmit more data over greater distances, an advantage for companies that must share information over far-flung computer networks. But the storage systems sold by most manufacturers feature fiber channel connections only on the ''front end'' - between the server and the storage equipment. Clariion systems are more advanced, Schwartz said, because they also use fiber channel technology on the ''back end'' - to connect the network of disks inside the storage equipment. Data General also got a big boost earlier this year when fast-growing Dell Computer Corp. selected Clariion as its provider of fiber channel storage products, to be sold under Dell's PowerVault brand name. '' Clariion's fiber channel technology was superior to anything else on the market,'' said Dell spokesman Jim Mazzola. But while Data General expects the deal with Dell to help it win significantly more business, it is also hiring its own sales force that will call directly on corporate customers and sell Clariion-brand equipment. Previously, virtually all of Data General's $500 million in storage system revenue came from computer makers that sold Clariion machines under their own brand names. The idea is to build up the Clariion brand name, said Schwartz. Data General also is investing more in software. In the restructuring announced in June, the company transferred 100 employees to the Clariion division, most of whom work in research and development. ''The Clariion name is well-known in the industry, but not by the end user,'' Schwartz said. With a direct sales force, more advertising and more investment in software, he hopes to boost its brand awareness.