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Intergraph hones in on workstations

The major workstation manufacturer spins off its computer operations to capitalize on its expertise in that area.

Intergraph has spun off its computer operations in an attempt to sharpen its focus on the workstation market.

Starting January 1, Intergraph Computer Systems will operate as an independent entity and control the manufacturing, development, and sale of Intergraph's workstations, servers, and graphics cards.

The move will bring greater visibility to these products, which are being well received by customers and analysts, and to develop a distinct brand name for high-end NT workstations, said Wade Patterson, chief executive officer of ICS.

Currently, computer system sales account for close to $650 million, more than half of Intergraph's annual revenue, but the company as a whole is primarily known as a provider of computer-aided design tools.

"We've been doing this for a while, but we've been buried inside a bigger company," Patterson said. ICS will target users in publishing, digital media, and other graphics-intensive operations, he added.

Most of ICS's customers will be migrating from Unix. As a result, ICS will not be directly competing against the other PC giants, which are taking more of a mass-market approach. A good portion of sales for these companies comes simply from PC users seeking more power, various sources have said.

"We have no intention of taking on Compaq or Dell," he said. "All of our markets are graphics-related."

ICS, he added, is aiming at achieving a 20 to 25 percent share in these markets, which should make the company a top-tier provider for its segment. For the overall market, ICS could become the fourth- or fifth-largest provider of NT workstations, he added.

Workstations and servers will likely constitute the lion's share of the company's revenues, though graphics subsystems are expected to grow. In the latter category, IBM announced earlier today that it has incorporated 3D graphics technology from ICS into its new generation of workstations.

Two more announcements are forthcoming, Patterson said, and Intergraph will begin to incorporate IBM's copper circuitry technology into its graphics chips later next year.

Although less well-known than its competitors, Intergraph has a fairly strong reputation in the NT workstation field, said Peter ffoulkes, an analyst at the research firm Dataquest. At present, Intergraph and Hewlett-Packard essentially define the high end of the NT workstation market. Intergraph, in fact, was the first company to make an NT workstation.

"Now that they are organized independently, they will be able to focus much better," he said.