Success lies in 'clicks and mortar'

By RICHARD BRADDELL

WELLINGTON - The internet has entered a second phase where pure dot.com companies will lag in the race for success, says the head of the information-technology giant Unisys.

Laurence Weinbach, credited with the multinational corporation's remarkable rebound since he took over two years ago, said the real winners would be those who could provide "fulfilment capability."

That almost certainly would involve physical as well as cyber customer interaction, which meant bricks and mortar companies with online capability.

An example of the limited capability of the pure dot.coms to fill their promise was illustrated by people receiving Christmas gifts bought online being unable to exchange them.

And in an apparent crack at the poor profitability of even some high-value internet companies, Mr Weinbach said: "I believe that to be successful longer-term you are going to have to do something creative ... like make money."

Hybrid "clicks and mortar " companies that had their act together would be very powerful.

"When [Walmart] finally goes online, they are going to be tough competition because they have the fulfilment capability and transaction capability."

The former chief executive of Andersen Worldwide, who has been holidaying in New Zealand, has overseen the transformation of Unisys from an indebted and dull hardware company into a successful IT services company.

It has gone from an annual loss of nearly $US1 billion ($2.01 billion) to a 1999 profit of $US510 million. Debt has plunged from $US2.4 billion to less than $US1 billion.

Mr Weinbach, the company's chairman, president and chief executive, said Unisys was well-positioned for the next phase of the internet because it would focus on the business-to-business part of the market rather than the business-to-consumer side that has so far drawn attention.

It would target medium-to-large businesses with its new ES7000 range, which it says can operate at a third the cost of Unix and proprietary systems. ES7000 uses scalable Intel processors and Windows 2000.