View from City Road: Lessons to learn

from ICL Hopes that ICL could be floated this year or next have long since faded. Like its rivals, ICL suffers from increasing competition and falling margins. Unlike many it has managed to keep its head above water, and has done so without the benefit of handouts.

Since 1989, the year before Fujitsu bought its controversial 80 per cent stake in ICL, the UK company's profits have steadily declined. In its own defence in the intervening years, ICL has arrogantly pointed to the losses made by the likes of Olivetti of Italy, Siemens-Nixdorf of Germany and France's state-owned computer company, Bull. Even the mighty IBM has suffered as no one thought possible a few years ago.

Now ICL is more thoughtful, less inclined to self-praise. The company struggled to do much more than break even last year and the battle is not over yet.

Success so far can be traced to early realisation of the fundamental changes looming in the industry, to cost cutting and to allegiance to open computer standards - hardware and software from various manufacturers that can be mixed and matched. Undoubtedly, the Government's attitude to open procurement made ICL face the icy blast of competition earlier than some rivals overseas.

The apparently cosy relationship with Fujitsu must also have helped to shore up the mood at the ICL headquarters in London. The Japanese parent has allowed ICL to expand and acquire as it saw fit, albeit with its own cash. The decision in November to underwrite a pounds 50m rights issue, increasing its stake to 82 per cent, could be read as a further vote of confidence.

Fujitsu as a parent has allowed ICL independence in spite of the size of its stake. The arrangement that was so criticised three years ago has outlived that of Honda and Rover. Ownership with an arm's- length relationship - and the promise of a local listing of shares - is a formula that could work for others as well.