Conference 7.286::digital

1500.0. "Eastern European Market Looks Promising" by TOOK::DMCLURE (Work to build the net) Tue Jun 18 1991 23:57

    		    Reprinted without permission
    	from page 13 of Monday's edition of The Boston Globe
    	

    		    Computer Firms eye East Europe
    		         by Jonathan Glater

    	Massachusetts' big computer makers, in need of a lift,
    think they see one - in technology-starved Eastern Europe.

    	And a move last month to liberalize controls on exports
    of computers to countries in Eastern Europe should help.
    Under guidelines issued by the Coordinating Committee on
    Multilateral Export Controls, or Concom, the computer makers
    themselves will be responsible for ensuring civilian use for
    smaller computer systems.  More powerful systems will still
    have to be licensed for export by the US Commerce Department.

    	The changes, which are effective Sept. 1, will create "a
    more level playing field" for different companies selling in
    East Europe, said trade lawyer James Gallatin, partner in the
    Washington office of Gaston & Snow, the Boston law firm.

    	"No matter how large the systems are, they have a good
    chance of being approved" if they are for a legitimate, civilian
    use, said Mark Fredrickson, a spokesman for Digital Equipment Corp.

    	Digital is already in the midst of efforts to establish a
    "direct presence" in Eastern Europe, Fredrickson said.  Digital,
    which plans to pursue business in Poland, already has a subsidary
    in Czechoslavakia and a joint venture company in Hungary, which
    has performed "significantly beyond our expectations," Fredrickson
    said.

    	The Maynard-based computer manufacturer now will be able to
    sell more of its mid-range computers, which can be used for
    "anything from banks to public administration," Fredrickson said.
    This type of equipment will help "the modernization process of the 
    infrastructure," he said.  "Its a catch-up phase for Eastern Europe
    in terms of technology."

    	Relaxed export restrictions have "decontrolled" local area
    networks and shortened the lag time for Cocom approval of wide area
    networks in Hungary, Czechoslavakia, and Poland, Digital says.  There
    will also be presumption of approval for civil wide-area networks
    in the USSR and China, though still with a full Cocom review.  The
    new technology will serve "serious corporate and government functions,"
    Gallatin said.

    	The opportunities for sales of computer software, as well as
    hardware, will expand with the power of the computers in use in the
    East.

    	Lotus Development Corp., the Cambridges software maker, plans to
    expand its current Eastern European initiatives, which are through
    carefully selected distributors, said David Peacock, marketing services
    manager for the firm's international business group in London.  He
    called those sales "a number one priority" for Lotus.

    	Prime Computer Inc., which has been running Eastern European
    operations for the past seven months, will concentrate on sales of
    software for CAD/CAM - computer-aided deisgn and computer-aided
    manufacturing - in Poland, Hungary, and Czechoslavakia, said Igor
    Kowal, director of Eastern Europe Operations.

    	"We have had extensive negotiations with the automotive industry"
    for use of CAD/CAM, Kowal said.  The computer division of Natick-based
    Prime, which sells software primarily for Sun Microsystems Inc. and
    Digital computer workstations, makes two-thirds of its sales outside
    the United States.

    	Options for manufacturers of telecommunications equipment also
    will expand in East Europe outside the Soviet Union, according to
    Christopher Padilla, manager of government affairs for American
    Telephone and Telegraph Co. in Washington.  Recent changes will
    effect future investments, said Padilla, who anticipates $200 million
    - in addition to a recently completed $100 million deal with Polish
    Post Telephone and Telegraph - in sales to Poland by 1993.

    	Though the market for high technology products will expand,
    sales initiatives in Eastern Europe - except in Poland, which Gallatin
    described as "sloshing with money" - might not immediately reward
    manufacturers, Gallatin said.  "They don't have tons of money" in
    Eastern Europe, he said.  Digital's Fredrickson acknowledged that
    "these are long term investments."

    	The new controls will not open markets for the most powerful
    computers, either.  "Our guess is that (the new controls) won't
    have any effect on us," said Edward Kramer, vice president of
    Thinking Machines Inc., which makes so-called super-computers.
    The Cambridge firm has not sold anything to the East, Kramer added,
    and has no plans to attempt to market computers there.

    	"We make some of the most powerful machines in the world,"
    and Thinking Machines computers are used extensively by the
    Department of Defense, said Kramer.  Although the computers have
    civil applications in geologic data processing and data processing
    and general scientific research, Kramer said he does not expect to
    be allowed to sell supercomputers in the East.