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"WE FACED A TOUGH TRANSITION IN CHANGING THE MINDSETS OF
<br /> RESEARCH-AND-DEVELOPMENT ORGANIZATION , DOMINATED BY
<br /> the plate to deal with the infrastructure and and Silicon Graphics to implement computer eluding one or more Baby Bells);
<br /> make the changes that need changing." systems—big and small—for a variety of •downsizing in Europe(a traditional source
<br /> What sort of changes?Those affecting the clients.CDS would sell expertise.not boxes. of strength),while concentrating operations in
<br /> very essence of the business. France.Germany and Great Britain and ex-
<br /> panding into the Pacific Rim.
<br /> f the game plan sounds logical and Tamil- Eventually,Ousley foresees only 50 percent of
<br /> o understand the need for change,one j iar,it should,because any number of revenues coming from North America,with 30
<br /> Tmust look at Control Data's origins. i large computer firms have mapped out the percent from Europe and 20 percent from Asia.
<br /> Control Data Systems was created when — same path as they attempt to move with "'There's a lot of risk in this."Ousley says.For
<br /> ontrol Data Corporation split into CDS the shifting currents of the computer world. example.a project in Russia has been approved.
<br /> and Ceridian Corporation in August 1992.The Still,the seriousness of such a transition,espe- but there's no funding for it at the moment.
<br /> smaller outfit of the two,CDS started out with sally among mature computer companies.can- "In the long term,deals overseas are essen-
<br /> relatively little debt(about$3 million)and a not be overemphasized.Such larger companies tial for Control Data."Morrison says."Russia
<br /> stable customer base. as IBM,DEC and Amdahl.have attempted to has a huge potential market,and it's important
<br /> "We were the'other'company,"Ousley says. shift from hardware to services with varying ley- to be there now."
<br /> "At the time,most people chose to go to Cerid- els of success.
<br /> ian.We basically had to build a management In retrospect,the program wasn't as surcPcc-
<br /> team from scratch. ful as Ousley and crew envisioned(he gives o single type of business can propel
<br /> "Plus,we weren't exactly the family jewels. himself a B+grade for the plan,but only a C CDS into sustained sum-cc,but the
<br /> You don't spin off the family jewels." for its execution).Cyber revenues still repre- company boasts a great deal of enthu-
<br /> Although CDS's handicaps were down- sent 30 percent of CDS's profits.That reliance, siasm for what recently became a
<br /> played when the dissolution took place,prob- Ousley says,causes concern within the invest- more-defined part of CDS's business plan:
<br /> lems were evident to Ousley and anyone else went community,which regards CDS with the electronic messaging.
<br /> with an inclination to look for them.Most were same skepticism as it did CDC."We carry a lot Essentially,electronic messaging is a more
<br /> related to age:CDS's continued reliance on old of baggage from the past in the investment refined form of"having your computer call my
<br /> — technology,centered around the Cyber line of community,"Ousley admits.The CDS stock computer."As the use of computers in the car-
<br /> mainframe computers.and an aging workforce price hovers around$7 per share,even though porate world mushroomed,companies bought
<br /> that saw the Cyber line as a way of life,not a CDS posted six consecutive profitable quarters all kinds and brands of computing systems,in-
<br /> remnant of the past before announcing a$5 million loss in Octo- eluding IBM mainframes,DEC minicomputers
<br /> "We faced a tough transition in changing the ber.(The 52-week high and low stock prices and UNIX-based networks.At one time,pro-
<br /> mindsets of our employees—we needed to were$113/.and S5'/:as of December 9, 1994. viding communications between systems was
<br /> change from a centralized research-and-devel- The market capitalization on that date was not much of a issue,because there seemed to
<br /> opment organization.dominated by engineers, S79.4 million.) be little reason for a corporation to want to
<br /> to a customer-oriented,end-user mentality," With S75 million in cash and virtually no communicate directly with another's computer
<br /> Ousley says. "Now[the engineers]have to be debt,however,the firm,Ousley argues.is in system—much less another computer system
<br /> involved with customer problems." better shape than the investment community within the company. Why would the financial
<br /> The Cyber mainframe computer line is a di- thinks.In 1993.it turned a profit of$9.1 mil- folks want to use the data compiled by R&D?
<br /> nosaur.Cyber computers demand a serious in- lion on revenues of$451 million. That compartmentalized way of thinking
<br /> vestment of resources—both financial and hu- The response to the skepticism is yet anoth- now is obsolescent.Today,corporate-comput-
<br /> man—to install and maintain when significantly er restructuring,one that further decreases de- ing designers emphasize"open systems."Open
<br /> less expensive alternatives are available.Still.Cy- pendence on Cyber revenues and stresses systems might mean that every employee has
<br /> ber-related revenues carried the firm after the CDS's commitments in a smaller number of the ability to send electronic mail to any other
<br /> split,so it's not surprising that giving up those focused market segments. employee—no matter if the employee is across
<br /> revenues would be akin to skipping a meal a day. "This restructuring is really critical to the fu- the building or across the world.Or it might
<br /> Nonetheless,decreasing the emphasis on Lure of CDS."Morrison says. "If they pussy- mean that your IBM mainframe be able to
<br /> those revenues is exactly what Ousley did after foot around,everyone will throw in their tow- communicate directly with your principle sup-
<br /> an initial restructuring of CDS,one that corn- el.The bigger the better.The bigger and more plief's Hewlett-Packard minicomputer,in or-
<br /> bitted layoffs with an overhaul of the entire significant the change,the better the invest- der to process purchasing and shipping infor-
<br /> business. Instead of selling boxes—big and ment community will feel about it." nation using Electronic Data Interchange.
<br /> small—CDS would be an:information Integra- At present.Ousley s plans for CDS include: When you hear about electronic mail and the
<br /> tor," adding considerable value through ad- •working on its technological expertise Internet,you're hearing about the areas where
<br /> vanced technological capabilities. Instead of through acquisitions and talent raids; CDS wants to be—on a very large scale.
<br /> working with Cyber mainframes and related •firming up partnerships with strategic part- The company's track record in computer
<br /> equipment,CDS would work with such yen- ners(Ousley is in discussions both here and in communications—in the heyday of main-
<br /> don as Hewlett-Packard,Sun Microsystems Europe with telecommunications vendors.in- frames.a core Control Data strategy was en-
<br /> 4B FEBRUARY 1995 TWIN CITIES BUSINESS MONTHLY
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