Stratus Computer Inc. has been focusing on the financial services industry since Ascend Communications Inc. bought it in August.

Stratus, which sells fault-tolerant computers, had widened its focus to include the telecommunications industry. But now it is again concentrating on its original target market, financial services, said Stephen C. Kiely, president and chief executive officer.

Two-thirds of its 725 customers are in financial services. Most of its computers go to banks and brokerages for transaction processing.

Twenty-five of the world's top 30 banks, nine of the top 10 U.S. securities firms, and all major credit card networks use Stratus systems. The largest stock exchange in Asia, Nasdaq, and other major exchanges use its hardware. Most cash management programs globally run on Stratus equipment.

"We're installed in the heartbeat applications of the customers we serve," Mr. Kiely said.

And last month Stratus' enterprise computer business was taken private by Stratus management and Investcorp., a global investment group. Management and employees of Stratus own 30% of the company.

In May it will move from its offices in Marlboro, Mass. into Digital Equipment Corp.'s former headquarters, in Maynard, Mass.

An analyst warns that the corporate makeover presents challenges.

"Stratus is going to have to get more aggressive because it doesn't have the telco market to rely on," said James Johnson, chairman of Standish Group in Dennis, Mass. "It needs to find new applications and get good products in the financial services market, where it has not been very competitive in the last few years."

Stratus, which has competed against Compaq Computer Corp.'s Tandem offerings, does plan to expand its product line.

Stratus' Continuum line is based on Hewlett-Packard's PA Risc microprocessor, which runs on the proprietary Stratus Virtual Operating System and Hewlett Packard's HP-UX platform.

It is developing a new product, Continuum II, that will use an Intel processor and run on the Microsoft Windows 2000 operating system. Mr. Kiely said the product, expected to be available early next year, will address the market's desire for standardization.

By 2002, the two product lines will converge and evolve into another generation. "We believe we can create leadership for continuous availability based on price and functions," Mr. Kiely said.

Continuum II "should improve Stratus' chances," Mr. Johnson said. "Stratus has always enjoyed ... high margins. It needs to get in line with the marketplace and meet competitive pressures it didn't have to meet before."

The company, which had revenues of $275 million last year, is up to the task, Mr. Johnson said: "We'll see new products faster, new product pricing, and a different focus on quality."

Stratus' "multifaceted plans for new products, services, and applications breathe new life into a company that could easily have fallen asleep at the switch," said Peter Kastner, chief research officer at Aberdeen Group in Boston.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.