IBM-Wang Marketing Pact Brightens Picture for Both
The alliance between Wang Laboratories and International Business Machines Corp. should help financially strapped Wang survive and give IBM access to advanced document imaging technology, according to bankers and consultants.
"We're looking very favorably on this because they are two of our main vendors," said David A. Moore, senior vice president and head of the information processing group at Mellon Bank Corp. "Although all the cards have not been played, we think it's a very smart move."
Under the alliance, announced last week, Wang would sell IBM personal computers and workstations under the Wang label and also market IBM's AS/400 midrange computers, which are popular with small and medium-size banks.
$25 Million for Starters
IBM will initially invest $25 million in Wang and may put in $50 million more if Wang's financial performance improves.
Wang officials said their company will continue to market and support its existing line of midrange computers, the VS series. The company will announce a new VS computer within a few months, but analysts expect that Wang will slowly move users to IBM systems and build communications links between them and the VS line.
Once a high-flying company specializing in office automation and imaging systems, Wang has lost money over the past few years as customers replaced the company's proprietary computers with other vendors' systems, including IBM's.
An Imaging Leader
Wang is a leader in image technology and has about 63 document image systems installed at banks worldwide, almost twice as many as IBM, said Scott McCready, director of image systems at IDC/Avante, a Framingham, Mass., market research firm.
He said Wang will probably adapt its document image system to IBM's RS/6000 line of computer workstations. The RS/6000 runs the AIX operating system, IBM's version of Unix.
Though the move to IBM systems should take Wang almost two years, he said, the conversion will be simple for users. "Customers will likely be able to move to RS/6000 quite painlessly. . . . Wang image customers will then have the benefit of a feature-rich software and hardware system that does the job."
Survival Odds Improve
Wang announced early this year that it was planning to shift to an open-systems strategy, which would let its computers work more easily with hardware from other companies.
But the company was on the ropes, industry experts say. The deal "means that it's more likely Wang will survive to execute it's strategy," said Chuck McDonough, a partner in Chicago with Andersen Consulting.
Mellon had been undecided about staying with its Wang systems, but executives of the bank said it wants to pursue an open-systems strategy, so the Wang-IBM alliance fits in with its plans.