You mean there was one?

CobraBoy! (
Fri, 6 Jun 1997 08:44:09 -0800

Decline and fall of Europe's computer industry

Copyright =A9 1997 Copyright =A9 1997 Scripps Howard

LONDON (June 6, 1997 01:13 a.m. EDT) -- For more than 40 years, Europe's
computer industry has tried and largely failed to build up national or
European champions to combat the power of the Americans and Japanese.

It was clear by the end of the 1960s that government featherbedding in
research and procurement would not be enough to protect Europe's national
champions -- Philips, Siemens, Olivetti, ICL and CII/Bull -- against the
onslaught by IBM and other American companies. The European Commission
started to urge the national champions to merge.

In 1969, an attempt by Eurodata -- a consortium of ICL, CII, Telefunken and
Olivetti -- to throw IBM out of the European Space Research Organization
failed. In the 1970s, merger talks between ICL and Nixdorf failed because
of ICL's intransigence, and a joint venture called Unidata between Siemens,
Philips and the French company CII to develop and market a common range of
computers collapsed in wrangling among the partners.

In the 1980s, Europe reacted to these failures by reverting to its old
habit of nurturing its national champions. Then-British Prime Minister
Margaret Thatcher guaranteed ICL's losses when it fell on hard times in
1981. Between 1983 and 1993, Bull received an average of $160 million a
year in subsidies and capital injections. In 1990, when Nixdorf ran into
trouble, there was an opportunity for a cross-border merger, but the German
government opted for a "German solution" -- a takeover by Siemens.

In a crisis, the European veneer proved very thin.

That same year, the unthinkable happened. Britain's ICL sold out to
=46ujitsu. Chairman Peter Bonfield had realized that being British or
European wasn't enough. In a global market like computers, he had to be
part of a global company.

=46or his pains, he was thrown off the European roundtable of national
champions, despite most of them being heavily dependent on Japanese or
American chip technology. The most incensed was Hans-Olaf Henkel, the head
of IBM Germany, who saw no irony in dubbing ICL "Fujitsu's Trojan horse in

With Fujitsu's money behind him, Bonfield then proceeded to mop up
Scandinavia's champions, taking over Finland's Nokia Data, Databolin (one
of Sweden's major software companies) and Denmark's Regnecentralen. He
proved, paradoxically, that globalization, not Europeanization, is the way
to rationalize the European computer industry.

In the early 1990s, the other national champions weren't doing well. Bull
was clocking up massive losses, sacking 14,000 workers and being bailed out
by the French government, to the fury of the European Commission. Olivetti
fired its boss, Carlo de Benedetti, as losses piled up. Philips had left
the computer market in despair. Siemens remained the only solid player,
despite immense difficulties in absorbing Nixdorf.

A new book by Paul Gannon, "Trojan Horses and National Champions,"
describes vividly how these disasters happen, despite the millions poured
into research budgets. The dream of a Europe of national or European
champions has been blown away. So has the view that governments can rescue
high-tech companies against the harsh logic of global competition.

One man, however, has learned from these disasters: Martin Bangemann, who
became the European industry commissioner in 1993. "We don't need public
money; we don't even need new technologies," he said just before the Corfu
summit in June 1994. "We must deregulate, liberalize and privatize ... If
we do not, the others will -- and we will be lost."

In fact, Bangemann's target is telecommunications rather than computing.
He's forcing Europe's telecommunications operators to open up their markets
by Jan. 1, 1998 -- a tough message to hand out to the cozy monopolies which
have noticed that privatization of British Telecom was followed by nearly
100,000 layoffs.

Bangemann is aware that he's opening up Europe's telecommunications
champions to cutthroat global competition, and he relishes the prospect.
The curious thing is that he's been working to an Anglo-Saxon agenda, and
BT, headed by Sir Peter Bonfield, late of ICL, and his American partner
MCI, are likely to be the winners.



The idea that Bill Gates has appeared like a knight in shining
armour to lead all customers out of a mire of technological
chaos neatly ignores the fact that it was he who, by peddling
second-rate technology, led them into it in the first place.
-Douglas Adams, on Windows '95

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