In the 1990s, Unisys was a struggling hardware supplier, best known for its mainframes and servers.

Fast forward to 2004 and hardware accounts for a fraction of Unisys' revenues. The company has turned itself into a services business, with outsourcing contributing half of its UK revenue.

Computing spoke to Unisys UK managing director Brian Hadfield about the transition and where he sees the company going from here.

How is Unisys doing at the moment?

In the toughest economic climate the IT business has maybe ever seen, we have been able to grow UK revenue at 23 per cent, while most other companies have seen revenue decline. We've done that by doing several things. We have been to leverage our skills in public sector, telecommunications and financial services, and deliver a pretty impressive outsourced services business, which is fuelling a lot of growth.

How have you achieved that?

We've had a mantra to create customer experiences that inspire recommendation. We are trying to get all our employees to realise that individually and collectively they make a difference. From that we've seen a tremendous difference in our top 20 customers. We have focused very heavily on the employee and staff involvement and cultural change.

Organisations are looking at how they can improve by one or two per cent here or there. We think that stifles productivity. Organisations are asking how do you do more with less? I think that's a stupid question. It should be how do you do different with what you have? We've focused on key markets and stopped doing things we don't think we can be different at. Can you focus on the thing that matters to the customer? In the UK. 89 per cent of our business is services. People still think of us as a pure technology company, but close to $1bn is services.

How hard was the transition to a services business?

It's been difficult and easy. It's been relatively easy because clearly to get to 89 per cent we've got a very strong following. People who know us and know what we do buy into the concept quite easily.

Because we are focusing on experiences that force recommendations, they're telling other people. Public sector entities will tell other public sector entities - it's the same with financial services. Parts of the media sometimes describe us as a technology company. They say, 'Unisys, the mainframe company'. 'Unisys the server company'. We've spent time delivering a strategy that focuses on the services element.

Does the hardware business have a future in a services company?

The hardware revenue is relatively flat, but services has grown, so it is diminishing on a percentage basis. We are services-led and technology-enabled. We have mainframe technology and, in the ES7000, a Windows server. We've had to be good at messaging, middleware, auditing and things like that. One of our strengths is we know infrastructure and middleware but then we've also got servers. It's still important.

Some 80 per cent of your revenue comes from 20 organisations. Are you overly reliant on those customers?

We do get a lot of revenue from our top 20 customers because we are woven into the fabric of these organisations. Clearly if we were to lose one it wouldn't be good. Our goal is to make sure that doesn't happen. Our strategy is to continue to support those customers to the best of our abilities. But it's also to grow the customers outside of that 20 per cent.

Our goal is to focus in areas we could be successful. We are not going to be everything to everyone. In the areas we choose to play, we continue to be industry leaders. We want to start to move customers just outside the top 20 in, and win selective new customers that have the profile of those companies. We recently won Avis (Computing, 26 February), and if we do our job it is likely they will move into that category.

The public sector is spending a lot of money on IT - what have been your experiences here recently?

They're getting easier to work with. What we have seen is the production process is successfully changing. They're looking at the fact that value is an important part of the equation, not just price. There is more focus on regionalisation. What we are seeing is a slow but meaningful transition in the public sector, and we want it to continue. If the price is everything I think it's probably not the place to be but I think there's ample evidence that it's getting there.

We have seen huge increases in data which makes the need for good integration all the more important.

I think what you should be focusing on is how do you deliver the customer experience. Take airlines for example. There are two airlines that fly transatlantic. One may have better seats, one may have better services. People go for the whole thing. It's not just the seat, it's the service around it. We encourage people to start at the customer and work back. We look at the end gain and what it looks like and work back and decide what has to change.

Is outsourcing your core business now?

Half our UK revenue - some $450m - is outsourcing. We've done a couple of interesting and different things. With the iPSL joint venture we have created a cheque clearing entity. We've brought together four companies, Unisys, Barclays, HSBC and Lloyds TSB and created a joint venture in which we are the prime share holder and deliver services to them and other financial services vendors in the UK. Unisys processes 74 per cent of the UK's cheques, that's 13 to 15 million items a day. Our ISL venture is for insurance - Abbey Life is the holding company but we take on everything behind the scenes. We've been able to build a business utility from outsourcing. There are some people that want to be part of something different like a joint venture. We say this is something we can build. The organisation and the marketplace that is most attuned to it and where it's been easy to do, is in financial services. I can see a situation where telephony companies would want to do a similar thing. There's no reason for them to own assets. Their strength is at the wire and the device.

What's your position on the offshore debate?

We have a small amount outsourced offshore as it is. Being a commercial enterprise we will continually evaluate markets and market conditions. I think the question is, will there be legislation. Should work be going to India or should it go more near-shore, to places like Turkey or Poland? There are some people that will just say we are not going to do it. As a global company we are going to accelerate it. We have to be sensible though, because there are some things that are not easy to offshore.