Hitachi Data Systems Splits

FRAMINGHAM (04/10/2000) - The massive reorganization at Hitachi Data Systems (HDS) last week fortifies the company's recently formulated strategy to reduce its dependence on mainframes alone for revenue and profits.

HDS said it will split itself into two companies, each with its own profit-and-loss responsibilities. One of them will be a platform-specific entity called HDS, which will house all of Hitachi's current hardware, software and services technologies. The other company will be called Hitachi Data Systems Solutions (HDSS) and will focus on providing business consulting, application-layer services and systems integration services.

The reorganization will allow Hitachi to better leverage its technology resources, said Dave Roberson, chief operating officer at HDS, the new platform-specific company.

Under the new structure, HDS has been split into six independent business units, each with its own business goals and profit responsibilities.

Hitachi's latest corporate action - which will result in the loss of 600 jobs - comes on the heels of its recent decision to scale back production of its mainframe systems.

"[The reorganization] makes a lot of sense from a company perspective," said Mike Kahn, an analyst at The Clipper Group Inc. in Wellesley, Massachusetts.

"It sort of frees Hitachi from being just a product vendor to being more of a product integrator, delivering solutions that might in fact have little to do with their traditional core products," Kahn said.

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