Intergraph continues to dismantle with scanner sale

The move comes just days after the beleaguered company announced it was pulling the plug on its PC and server businesses and seeking investment partners for its VIZual Computing workstation and Intense3D graphics cards operations. Intergraph is refocusing on software to stem persistent losses.

In 1988 Intergraph acquired ANAtech, which currently employs about 40, a spokeswoman said. It manufactures large-format monochrome and color scanners, and software. The spokeswoman declined to disclose earnings. Colortrac Inc. is the Littleton, Colo., subsidiary of Colortrac Ltd., which is based in Cambridge, England.

Intergraph's restructuring plan, disclosed earlier this month, resulted in a layoff of 400 workers and a $20 million one-time charge. The company has been in the red for some time, recently reporting a $12 million loss on revenue of $234 million for the second quarter ending June 30.

The company now aims to "provide customizable core software and services to our chosen customers," according to a statement attributed to chief executive Jim Meadlock.

Intergraph blamed Intel Corp. for its woes. The two have been battling in the courts since November 1997, when Intergraph filed a complaint that Intel was using its dominant market position to coerce Intergraph into giving up certain patent rights related to the Clipper microprocessor.

Intergraph blames Intel

That suit claimed that Intel had delayed shipments of Pentium microprocessors, putting Intergraph at a competitive disadvantage. Only last month, Intergraph asked the U.S. District Court for the Northern District of Alabama to compel Intel to comply with a preliminary injunction issued by the court in April 1998.

"I'm amazed at the degree to which Intel ignores the court," Meadlock said. "They continue to stonewall on information and samples we must have if we are to compete as a manufacturer of Intel-based systems. . . . The cumulative effect of this pattern of abuse is that Intergraph's hardware-related business is in serious jeopardy."

Intel has denied Intergraph's charges and said it has complied with the injunction.

Intergraph can't blame Intel for all its problems, said Guy Wright, an analyst with Jon Peddie Associates in San Rafael, Calif. "Intergraph had a very strong hold on the NT workstation market . . . As other large vendors entered, like Gateway, Dell and Hewlett-Packard, it became harder for them to differentiate themselves."

According to Wright, Intergraph's key mistake was to expand its product offerings beyond the high-end niche. "They made a bad move. They couldn't afford the R&D costs. They weren't a volume shipper like Dell," he said.

Wright believes the recent restructuring has put Intergraph on the right track. "They have a really good chance, because the high-end NT workstation market is still not being served very well by the bigger companies.

"Their very high-end CAD divisions are doing perfectly well. This isn't always in the public view because it's esoteric with very vertical markets, but some applications cost a couple hundred thousand dollars per seat."