The clone warGene Amdahl quit his job at IBM in 1970, after the company rejected his idea for a more advanced computer. The principal designer of IBM's popular System 360 family of mainframe computers, Amdahl decided to start his own company. In 1975, he released his first IBM clone - a computer that was faster and cheaper than IBM's, and compatible with the same software and peripherals. The company was a success, and went public in 1976. IBM retaliated by slashing prices and announced the impending release of its own improved product. That successful counterattack ravaged the startup, and in 1979, Amdahl left the company he had founded.
Acquiring a new look
Eugene White came in as the new president, and immediately acquired Tran Telecommunications, a data communications company. In the next decade, Amdahl grew through further acquisitions and diversification. Amdahl bought Key Computer Labs, a scalar computing firm, in 1989. In 1995 and 1996, Amdahl acquired two information-technology service providers, TRECOM Business Systems, and DMR Group, a Canadian company. Computer services group Fujitsu took over Amdahl in 1997 (it already controlled a 42 percent stake), but allowed the company to run as a separate subsidiary.
Fostering client dependence
Amdahl's present strategy is to exploit its more lucrative support services arm. The company hopes to make the transition from a simple hardware/software company to a full-service technical "solutions-driven" enterprise. This does not mean, however, that it is renouncing its hardware and software roots. In 1999 Amdahl acquired the assets of a leading software company to reinforce both its software and services. Amdahl's strategy is to first supply the hardware a corporation needs, and then to offer related operational and consulting services.
Today, over half of the company's business comes from its support services. Spring 2000 saw the introduction of trustedanswer.com, Amdahl's corporate customer service web site, which provides 24-hour support for clients of businesses that utilize the system.
The next generation of mainframes
But growth in services doesn't mean that Amdahl has neglected its hardware business. In July 1998, Amdahl launched a Multiple Server Facility (MSF), which helps companies cut software costs by allowing users to partition their mainframe into multiple servers, then run separate applications on each section. Meanwhile, Amdahl's 1,075-MIPS Millennium 800 mainframes, which hit the market in late 1998, beat both IBM's OS/390 and Hitachi's Skyline systems in terms of pure processing power and capacity. However, users complained that the equipment performed at 15 percent below promised capacity. Amdahl responded by upgrading faulty machines to its next model, the GS2000. In 2000, Amdahl is planning to introduce the GS2000C, which will have a capacity of up to 1,600 MIPS, and the GS2000E, which will have a capacity of up to 2,000 MIPS.
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