Monday, October 22, 2001		Article

FUJITSU Ltd, Japan's largest computer company, said it was in wide-ranging talks with International Business Machines Corp on possible cooperation in such areas as software and computer servers.

It stressed, however, that no decisions had been made on any specific areas of cooperation or the timing of an agreement.

Japan's computer and chip conglomerates are actively pursuing alliances and restructuring schemes as they struggle with a steep downturn in chip and electronics sales and jostle for position in Japan's fast-growing computer software and services market.

"Both companies have begun to explore the possibility of alliances in individual business areas and cooperation in a wide array of fields, including hardware and software," Fujitsu said in a statement.

Fujitsu and IBM's Japanese unit are among the leading providers of systems integration and other computer services to corporations and institutions in Japan.

But competition has been heating up as rivals aggressively target the sector's relatively healthy profit margins while distancing themselves from the volatile chip business.

"I think Fujitsu is probably losing market share in the systems integration business to NEC, IBM and perhaps Hitachi as well," Scott Foster, analyst at Lehman Brothers, told Reuters.

Hot servers

"NEC's got a very aggressive partner strategy with Oracle and Microsoft, and they sell Intel architecture products, and Hitachi works closely with Oracle and IBM and of course they're doing very well in data storage now."

NEC Corp, Japan's largest personal computer maker, earlier this week announced an alliance with software powerhouse Microsoft Corp to jointly develop high-end computer server systems and services.

Hitachi Ltd, which earlier this year inked a deal with IBM to cooperate in computer servers, has seen rapid growth this year in its data storage network business.

And Oracle Corp Japan, the Japanese unit of software giant Oracle Corp, has posted strong profit growth this year fuelled by brisk demand for business software and services.

Some industry executives and analysts have said Fujitsu appeared less willing than rival computer services providers to package other firms' products into the systems it sells. This could prevent it from offering the best product for a given system.

"I think the trends have generally been against Fujitsu. The reason is probably they have tried too much to go it alone," Lehman Brothers' Foster said.

APT Interactive, a specialist company in knowledge management and e-learning product development, recently developed a complete e-Learning module on "Failure Analysis in Semiconductor Devices" for Lockheed Martin Aerospace, the US-based aerospace company.

Lockheed Martin Aerospace required an interactive multimedia based e-learning software to train its vast employee base, and wanted the software to target the training needs of its technicians, engineers and managers. The e-learning software offers a modular approach to identify and understand failure in a semiconductor device.

The e-learning software module addressed various failure modes that occur in the semiconductor devices.

The software module has more than 20 hours of course content embedded in 400 pages of text, covering more than 40 semiconductor failure mechanisms. — TNS