Officials at Compaq Computer Corp. seemed unfazed by the announcement this week that a telecommunications company agreed to buy its main competitor in the business of building the fault-tolerant computing systems behind many electronic funds transfer systems.
Ascend Communications Inc. said it would buy Stratus Computer Inc. for $822 million in stock. Ascend was most interested in the Stratus business unit that sells specialized software to telephone carriers.
Alameda, Calif.-based Ascend plans to sell off or take public three units that account for 60% of Stratus' operations: financial software, enterprise software, and computer hardware.
"I was surprised that a telco bought Stratus, but basically I think it will have little effect on me," said Norman Goldberg, vice president of finance services industry marketing for Compaq.
Compaq has supplied its fault-tolerant system, known as Himalaya, to 24 of the top 25 banks in the United States and 18 of the top 20 automated teller switching networks, Mr. Goldberg said. Himalaya was developed by Tandem Computers Inc., a Compaq acquisition.
Stratus provides hardware to 26 of the world's top 30 banks and has 350 bank clients worldwide, said Patrick Farley, director of industry marketing for Marlboro, Mass-based Stratus.
Mr. Farley said competitors should not assume that Stratus is backing out of the fault-tolerant market.
"Because we've found an investor for our telecommunications business, we think we'll now have an even stronger product set to compete against Tandem," he said.
"Whether or not Ascend continues the product line, I don't think it will go away," Mr. Goldberg said. "It may open some doors for us but we'll continue to compete against Stratus and Stratus systems, regardless of who owns the franchise."
Stratus' enterprise computer business unit mostly sells hardware to the banking and securities industries. Last year it had revenue of $450 million, most of Stratus' $688 million total.
The other two units, financial and enterprise software, last year had combined revenue of $50 million.
They offer software for electronic transaction networks, retail banking, and securities applications.
Ascend would set up these operations as freestanding subsidiaries, which it would then sell or take public.
"We're open to any of those developments," Mr. Farley said. "We think it's positive for our enterprise business and our customers."
He said Ascend would continue to fund research and development in the three Stratus units, so the hardware unit could "focus on our enterprise business, which means primarily financial services."
Bruce Sachs, Stratus' president and chief executive officer, was quoted in the Boston Globe on Tuesday saying, "We have had several active inquiries from companies looking into what we plan to divest. I just cannot name them now."
As to whether or not Compaq was an interested party, Mr. Goldberg said, "I don't see it adding a lot to our portfolio."
