Sperry, Burroughs -- too many kinks for a sound match
Sperry and Burroughs broke off their engagement Monday, a tie most analysts thought peculiar. The two big computer companies had too many kinks in their relationship.
Their hardware and software were incompatible, making it difficult to combine manufacturing facilities. They had different customers (Sperry has targeted the military, Burroughs the commercial banking and services areas), so their sales forces had little overlap. Sperry, like many other second-tier and foreign computer manufacturers, has adopted the Unix standard to compete with IBM in the established mainframe market; Burroughs has not adopted Unix.
Finally, Burroughs's price for Sperry was too low, a Sperry spokesman says.
Even on a general level, such consolidation has a poor track record.
``There's never been a successful merger in this industry,'' says Carol Muratore, an analyst at Prudential-Bache Securities.
Sperry, once the country's biggest computer company but now No. 7, may be a takeover target because of its lackluster performance in the last few years. It broke off merger talks with ITT in March, reportedly because ITT would not pay Sperry's price.
Other companies that have eyed Sperry are Ford Motor Company (after losing its battle for Hughes Aircraft to General Motors), American Telephone & Telegraph, and Martin Marietta.