Unisys Explained

Company Name:Unisys Corporation
Company Type:Public (NYSE: UIS)
Company Slogan:Imagine it. Done
Foundation:1886 as American Arithmometer Company
1986 as Unisys
Location:Blue Bell, Pennsylvania, United States
Key People:J. Edward Coleman, CEO and Chairman
Num Employees:30,000 (2008)[1]
Industry:Computer Services
Products:Computer Servers and Solutions
Revenue: $5.23 billion USD (2008)
Net Income: $130 million USD (2008)
Homepage:www.unisys.com

Unisys Corporation, based in Blue Bell, Pennsylvania, United States, and incorporated in Delaware[2], is a global provider of information technology services and programs.

History

Unisys was formed in September 1986 through the merger of the mainframe corporations Sperry and Burroughs, with Burroughs buying Sperry for $4.8 billion. The name was chosen after an internal competition. The merger was the largest in the computer industry at the time and made Unisys the second largest computer company, with annual revenue of $10.5 billion [3] . At the time of the merger, Unisys had approximately 120,000 employees.

In addition to hardware, both Burroughs and Sperry had a history of working on U.S. government contracts. Unisys continues to provide hardware, software, and services to various government agencies.

In 1990, Unisys spread to the United Kingdom when a British businessman bought shares into the company and took over the running of its British dealings.

Soon after the merger, the market for proprietary mainframe-class systems—the mainstream product of Unisys and its competitors such as IBM—began a long-term decline that continues today. In response, Unisys made the strategic decision to shift into information technology (IT) services such as systems integration, outsourcing, and related technical services, while holding onto the profitable revenue stream from maintaining its installed base of proprietary mainframe hardware and applications.

Important events in the company's history include the development of the 2200 series in 1986, including the UNISYS 2200/500 CMOS mainframe, and the Micro A in 1989, the first desktop mainframe, the UNISYS ES7000 servers in 2000, and the Unisys blueprinting method of visualizing business rules and workflow in 2004.

In 1988 the company acquired Convergent Technologies, makers of CTOS.

In March 2006, Unisys sold its Japanese distributor stake for $374 million. The sale was intended to help fund 3,600 previously announced employee layoffs, accounting for about 10% of the Unisys employee workforce at that time.

10/07/2008 - J. Edward Coleman was appointed CEO and Chairman replacing J. McGrath.

On November 11, 2008 the company was removed from the Standard & Poor's 500 index. At the close of trading on November 7th the market capitalization of the company had fallen to $313 million, below the S&P 500 minimum of $4 billion.[4]

The company's slogan is: Unisys. Imagine it. Done.

Products, services, and customers

Paralleling larger trends in the U.S. information technology industry, an increasing amount of Unisys revenue comes from services rather than equipment sales. In 2008, the ratio was 88% for services, up from 65% in 1997. [5]

Unisys clients are typically large corporations or government agencies, and have included Washington Mutual, the New York Clearinghouse, Dell, Lufthansa Systems, Lloyds TSB, EMC, SWIFT, various state governments (for services such as unemployment insurance, licensing, etc.), various branches of the U.S. military, the Federal Aviation Administration (FAA), numerous airports, the General Services Administration, U.S. Transportation Security Administration, Internal Revenue Service, Nextel, and Telefonica of Spain.

Unisys systems are used for many industrial and government purposes, including banking, check processing, income tax processing, airline passenger reservations, biometric identification, newspaper content management and shipping port management, as well as providing weather data services.Unisys developed the software for NEXRAD, the original doppler weather radar, and has since provided weather data consisting of radar, satellite, lightning, etc. [6] Unisys operates the world's largest RFID network for the U.S. military, tracking 9 million containers yearly to 1,500 nodes in 25 countries. It also created the universal identification card for citizens of South Africa.

The company engages in consulting, one-time contract jobs, and contracts for ongoing outsourced IT services. Services include building and integrating hardware and software systems, providing ongoing hosting and management of data, planning operational processes and changes, and providing security.

Its equipment line includes the ES7000 server family, which uses Intel processors such as Xeon or Itanium chips. The servers run Microsoft's Windows Server 2003 and other Windows operating systems, and/or Open source Linux operating systems from Novell or Red Hat. The ES7000 is also certified by the Guinness Book of World Records for hosting the largest number of concurrent gamers ever recorded on a single game server.[7]

The company's mainframe line, Clearpath, is capable of running not only mainframe software, but both the Java platform and the JBoss Java EE Application Server concurrently. The Clearpath system is available in either a UNISYS 2200-based system (Sperry) or an MCP-based system (Burroughs).

Controversies

Unisys attracted significant criticism in 1994 after enforcing its patent on the LZW data compression algorithm, which is used in the common GIF image file format. For a more complete discussion of this issue, see Graphics Interchange Format#Unisys and LZW patent enforcement.

Unisys was the target of "Operation Ill Wind", a major corruption investigation in the mid-to-late-1980s. A number of employees were imprisoned as a result. As part of the settlement, all Unisys employees were required to receive ethics training each year, a practice that continues today.

In 2003 and 2004, Unisys retained influential lobbyist Jack Abramoff, paying his firm $640,000 for his services in those two years. In January 2006, Abramoff pleaded guilty to five felony counts for various crimes related to his federal lobbying activities, though none of his crimes involved work on behalf of Unisys. [8] The lobbying activities of Abramoff and his associates are now the subject of a large federal investigation.

In 2005, there was further trouble for the company related to consulting work it was doing for the U.S. Transportation Security Administration. In October, federal auditors announced that the company had overbilled on the $1 to 3 billion contract for almost 171,000 hours of labor and overtime. Unisys denied wrongdoing; [9] Unisys, along with two other major companies are currently competing to be awarded the next TSA contract. TSA is scheduled to make an award decision sometime in April 2009.

In 2007, the Washington Post reported that the FBI was investigating Unisys for alleged cybersecurity lapses under the company's contract with the United States Department of Homeland Security. A number of security lapses supposedly occurred during the contract, including incidents in which data was transmitted to Chinese servers [10] . Unisys denies all charges and said it has documentation disproving the allegations.[11] .

In 2007, after 3 years of massive losses and consecutive losing quarters, Unisys spun off one their service divisions to remain in business. Since the loss of Larry Weinbach the company has been in a free fall. Its Blue Bell Headquarters is already on the auction block and stands to bring in 100-150 million dollars to help stem the blood loss. In other cost cutting measures employees mileage reimbursements have been slashed and wages frozen. In addition, company 401K matches have been temporarily suspended.

In 2008 Joe McGrath stepped down after a no confidence vote from the board, and was replaced by J. Edward Coleman, former CEO of Gateway, Inc. The president of the Federal sector Greg Baroni was also fired.[12]

Unisys announced on June 30, 2008 that the Transportation Security Administration (TSA) had not selected the company for Phase 2 of procurement for the Information Technology Infrastructure Program [13] . In July Unisys announced its plans to file a formal protest of the TSA decision with the Government Accountability Office (GAO).[14] On August 20th the TSA announced it was allowing bidding from all competitors including Unisys and Northrop Grumman, who both filed formal protests with the GAO and protested TSA's decision to the Federal Aviation Administration's Office of Dispute Resolution, after not initially being selected. [15]

See also

Notes

  1. Web site: Company Profile for UNISYS Corp (UIS). 2008-10-01.
  2. http://www.sec.gov/cgi-bin/browse-edgar?company=Unisys&CIK=&filenum=&State=&SIC=&owner=include&action=getcompany Company Information: UNISYS CORP
  3. http://www.unisys.com/about__unisys/history/index.htm Unisys | About Unisys | History
  4. News: People's United to replace Unisys on S&P 500 Index. 2008-11-10.
  5. http://www.unisys.com/about__unisys/investors/index.htm Unisys | Investors | News, Events, Financials, Information
  6. http://weather.unisys.com Unisys Weather
  7. http://www.unisys.com/about__unisys/news_a_events/12028475.htm Unisys|Unisys ES7000 Server Powers World-Record-Breaking Gaming Event
  8. http://www.eweek.com/article2/0,1895,1911073,00.asp Abramoff Scandal Could Cast Pall On Tech Lobby
  9. http://www.washingtonpost.com/wp-dyn/content/article/2005/10/22/AR2005102201437.html Contractor Accused Of Overbilling U.S
  10. http://security.itworld.com/4337/070924unisys/page_1.html FBI investigates Unisys over U.S. government hack | ITworld
  11. http://www.unisys.com/about__unisys/news_a_events/09248817.htm Unisys Says Facts, Documentation Contradict Allegations in News Story on DHS
  12. http://www.washingtontechnology.com/online/1_1/33665-1.html?topic=&CMP=OTC-RSS
  13. http://philadelphia.bizjournals.com/philadelphia/stories/2008/06/30/daily18.html
  14. http://www.washingtontechnology.com/online/1_1/33141-1.html
  15. http://www.wtop2.com/?nid=169&sid=1462701

External links