Leaked Compaq Q&A shows level of 64-bit NT Alpha chaos

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This internal Q&A should be viewed against our story Microsoft puts boot into 64-bit Alpha. Any of our own comments are italicised. Windows NT Alpha Strategy Q & A Version 1 - 25 Aug 99 General Questions: Q. Exactly what has Compaq changed in its Alpha Windows NT Strategy? What has Compaq announced? Why has Compaq decommitted from Windows NT on Alpha systems? A. Based on the extremely good scalability of our 4- and 8-way ProLiant servers with 32-bit Windows NT, Compaq believes that this platform can satisfy all market requirements for 32-bit Windows NT. We have therefore been able to simplify our strategy and offerings. Compaq will end 32-bit Windows NT Alpha systems development with V4 SP6, late in 1999, and will not support either 32 or 64-bit Windows 2000 on Alpha systems. This change will enable us to sharply focus our Alpha strategy and resources on our aggressive plans to grow Tru64 UNIX market share, support our loyal OpenVMS customers, extend our Himalaya range, and drive volumes for Alpha systems with Linux. Q. What is Compaq's Windows NT strategy going forward? A. As the leading provider of Windows NT-based platforms and solutions, Compaq is a strong supporter of Windows NT and will remain at the forefront of moving Windows NT into the enterprise as its capabilities continue to mature. We will maintain our leadership role in providing the environment in which Microsoft is developing its 64-bit capable versions of NT as well as our extensive involvement in assuring the best performance and reliability on Microsoft's current and future 32 bit offerings. The only change in strategy is that all of Compaq's efforts on behalf of 32- bit Windows NT will now be built around our industry-leading IA32-based systems. The recent very strong performance results achieved with Compaq's new 8-way ProLiant servers demonstrates that we can meet 100% of the market requirement for 32-bit Windows NT systems with these platforms. Q. Will Alpha support for 64-bit Windows NT also be discontinued? Why? A. We will continue partnering aggressively with Microsoft on development of 64-bit Windows NT, utilizing Alpha systems. We do not plan to offer 64-bit Windows 2000 on Alpha systems, and will focus our efforts on offering the very best 64-bit IA32 Windows NT platforms in the market at the time of its introduction. How can you have a 64-bit IA32 system? Q. Is this a sign of Compaq slowly backing away from Alpha? A. Absolutely not. Alpha still remains a vital component of Compaq's NonStop eBusiness strategy for the enterprise. As evidence of this, the previous commitment to move the NonStop Himalaya and Integrity system architectures to Alpha is intact, as is the recent commitment by the senior management to spend an incremental $100M to further the position of Tru64 UNIX/AlphaServer in the marketplace. There is also strong market interest in Linux running on Alpha, and this will be a major focus for driving volume based on the Alpha architecture. Finally, the Alpha chip roadmap continues advancing, with "shrinks" of the 3rd-generation of Alpha architecture (the 21264), the finalization of the EV7 design, and early design of EV8 technologies all presently underway. Installed Base Impact Questions: Q. Am I "dead-ended" with the current investment in my AlphaServer? What options do I have? A. No. Compaq is putting in place programs and growth paths to satisfy our customers' requirements through this change in plans. For already installed AlphaServers running Windows NT: In the short term, customers can continue to use their existing systems ith current applications and have the option to upgrade to Service Pack 5 and then Service Pack 6. In the long term, customers can continue to use their current systems with Windows NT 4, and will be supported by Compaq Customer Services until at least Q1 CY2001. For future needs (including Windows 2000), customers should take advantage of trade-in programs and migration services to Windows NT or Windows 2000 on ProLiant servers, or to Tru64 UNIX, OpenVMS or Linux on their AlphaServer systems. For customers considering new AlphaServer systems running Windows NT: Customers can move to ProLiant Servers and run Windows NT 4 or Windows 2000, depending on their requirements. For each of these circumstances, Compaq will provide attractive programs, upgrades and migration services to fit the individual customer needs. Details on these programs are available from your regional representative. Q. I bought my Tru64 UNIX or OpenVMS AlphaServer with the promise that it would run Windows NT in the future. What do I do now? A. Compaq will provide upgrade and trade-in programs to ProLiant Servers for customers who chose to move to Windows NT in the future. Details of these programs are available from your regional representative. Q. I have an Alpha Windows NT-only DIGITAL Servers (white box), what options do I have? A. Customers with Alpha Windows NT-only DIGITAL Servers can continue to run Windows NT V4 with support provided up through at least Service Pack 5. For customers who wish to move to Windows 2000, Compaq will provide attractive upgrade and trade-in programs to new ProLiant Servers. Q. How long will my current Windows NT Alpha system be supported? A. Our Customer Services organization will continue to support both hardware and software, for the foreseeable future and at least through Q1, 2001. Hardware support will be offered under standard terms & conditions. As a demonstration of this commitment, Compaq Customer Services still supports VAX and PDP technology. Q. How long will you ship new Alpha systems running Windows NT V4? A. A specific roadmap that details the last ship dates for each system model is provided in supporting materials. Q. I have a large investment in Alpha for UNIX, why won't Tru64 UNIX be next to be dropped (when Merced ships)? A. The market for enterprise servers running UNIX remains a very strong and vital one, and Compaq intends to be a leader within the segments of this market we focus on, in order to service the needs of our enterprise customers. Tru64 UNIX is widely acknowledged to be one of the finest UNIX operating systems in the market. The recent commitment by senior management to spend an incremental $100 million to fortify the position of Tru64 UNIX/AlphaServers in the market is tangible evidence of our intentions. Q. I am in the middle of Y2K validation and am planning to move to Windows 2000. Why has Compaq dropped Alpha support for Windows NT at this critical time? A. Customers will continue to be able to run Windows NT Service Pack 4 for Y2K conformance and have the ability to upgrade through Service Pack 6. This will enable customers to run current Alpha systems through CY2000 without impacting their Y2K readiness. As customers begin to move to implement Windows 2000, they have the option to re-deploy their current AlphaServer to run Tru64 UNIX or OpenVMS, add ProLiant Servers running Windows 2000 or take advantage of upgrade and trade-in programs being put in place by Compaq. Q. How will this decision affect StorageWorks? Will Compaq StorageWorks products continue to support NT on Alpha? A. The Raid Array 8000 and Enterprise Storage Array 12000 product lines will support 32-bit Windows NT on AlphaServers in FCAL configurations. Customers will have the option to upgrade to Service Pack 5 and then Service Pack 6. Compaq is making beta versions of the FCAL drivers available today and will have a production FCAL driver available for AlphaServers 32-bit Windows NT in October, 1999. This solution will support both clusters and high availability single system configurations. In the long term, customers can continue to use their current systems with Windows NT 4, and will be supported by Compaq Customer Services until at least Q1 CY2001. For future needs (including Windows 2000, support for FC Switched Fabrics, and value-added features such as Data Replication Manager), they can move to ProLiant Servers or consider trade-in programs and migration services to Tru64 UNIX, OpenVMS or Linux. Q. What will happen with my ISV software licenses as I move to another platform? We are working closely with key ISVs, for example Oracle and SAP, to assure that there are migration plans in place. Our key ISVs are supportive of this decision and are also committed to taking care of customers in the very best way. More details will be provided as each ISV develops their plans. Business Questions: Q. Was Compaq counting on Alpha Windows NT to drive volume? A. No. There is enough Tru64 UNIX, OpenVMS, Himalaya and Linux business to sustain a competitive Alpha processor for the long term, along with our partners such as Samsung/API. Q. What is Microsoft's position on this decision? Does this reflect a weakening of the Compaq/Microsoft relationship? A. Microsoft supports this decision. It in no way reflects a weakening of the Compaq/Microsoft relationship. Compaq is working quite closely with Microsoft in the development of 64-bit Windows NT, in support of our drive to address more demanding enterprise requirements with Windows NT. Q. How have Samsung and Alpha Processors, Inc. reacted to this decision? What will happen to other OEMs who are developing systems utilizing Windows NT on Alpha? A. Recognizing the opportunity that exists for Alpha on Linux, Alpha Processor, Inc. has already made all its products available for Linux. Most recently they've been assisting an effort in bringing leading Linux tools and libraries to Alpha. API's and Samsung's resources will continue to support Linux-based solutions. With respect to OEM's who have been utilizing Windows NT on Alpha, API and Samsung are working closely to help those who wish to transition to other platforms. We'd recommend contacting API for further discussion regarding their platform strategies. Q. What proportion of AlphaServer business is on Windows NT today? Has that fraction been increasing or decreasing? A. Less than 2% of AlphaServer current business. Tru64 UNIX has become the predominant choice for Alpha systems, with OpenVMS in second position. While Tru64 UNIX and OpenVMS customers have benefited from Alpha's accelerated performance with EV6 technology, 32-bit Windows NT customers needs can be met with the performance and capabilities of the superior performing ProLiant servers. Q. What proportion of AlphaServer business is on Linux today? A. Small, but growing very rapidly. Q. What has been the reaction of ISV's? What about those ISV's who have made significant investments in Alpha/NT? A. Our key ISVs support this decision. We will be working closely with our ISVs to offer trade-in and migration programs, to take care our mutual customers needs. In addition, Microsoft has committed to support ISVs with all aspects of their 64-bit development program. Q. What is the impact of this decision on Compaq's workstation business? A. The decision regarding Windows NT and Windows 2000 affects both AlphaServer systems as well as Alpha-based workstations. Attractive migration and trade-in offers will also be in place to IA32-based Compaq Professional Workstations or to other operating systems on the currentplatform. Q. How will this announcement impact Compaq's focus on the ISP market? A. It does not affect our comprehensive and aggressive focus on the ISP market, addressed with a combination of Tru64 UNIX on AlphaServers and Windows NT on ProLiant servers. Overall Server and Competitive Positioning Questions Q. How are Tru64 UNIX AlphaServer solutions for ISPs, ASPs and eBusiness positioned in the market? A. Compaq Tru64 UNIX AlphaServer solutions are competitively positioned. Unlike any other RISC UNIX platform on the market, solutions delivered on Tru64 UNIX V5.0 AlphaServer systems offer our customers the highest availability with the lowest cost to implement, operate and manage. Additionally, eBusiness applications require the ability to scale to meet the peak demands placed on them. Unlike other UNIX platforms, Compaq's Tru64 UNIX AlphaServers have the power to meet the peak load requirements. Your systems will not slow down during a ritical time of network traffic. Q. Compaq appears to be positioning the ProLiant 8-way server against Sun. Isn't that in conflict with the positioning of Tru64 UNIX AlphaServer solutions? A. Not at all. Compaq has a stronger set of products than Sun since we have both superior UNIX and Windows NT products, offering the customer more choice! The newly announced ProLiant 8000 and 8500 servers were announced to compete directly against Sun in the ASP and low-end of ISP markets, complemented by Tru64 UNIX for the higher end requirements. Compaq Tru64 UNIX AlphaServer solutions continue to compete effectively against Sun as demonstrated by numerous industry standard benchmarks and with the extremely high levels of availability and scalability. Q. What are the benchmarks and how do Compaq ProLiant and AlphaServer offerings compare with Sun? A. As an example, Compaq's AlphaServer DS10 with Tru64 UNIX, featuring 2GB memory and up to 54 GB disks, outperformed Sun's dual- and quad-processor servers running Internet applications at less than half the price on the SPECweb96 benchmark. The AlphaServer DS10 with Tru64 UNIX delivered results of 3404, outperforming both the Sun E450(2963) and the Sun E250 (2625). There are many other examples in other target market segments. The ProLiant 8000 running Microsoft SQL Server 7.0 on Windows NT 4.0 offered more than double the performance at 30 percent better price:performance than the Sun E450. Our key strength versus Sun is that no matter which OS our customers chose, either Tru64 UNIX on AlphaServers or Windows NT on ProLiant servers, they can be assured of the best absolute performance as well as price/performance across a range of applications and systems. Sun only has UNIX and cannot offer their customers the Windows NT choice. Q. Isn't Compaq's strong support of both Windows NT and UNIX solutions confusing to the market? A. Compaq is committed to solving the full range of business and technical challenges throughout the enterprise. Analyst reports estimate that 90% of all IT environments will be using both UNIX and Windows NT. Compaq, a leader in 64-bit UNIX and the market share leader in Windows NT solutions, is not only committed to offering a broad range of solutions for each operating system, but also to continuing to enhance its leadership position in UNIX/Windows NT interoperability. Compaq allows its customers to take advantage of both systems - without two support and development staffs, and a host of cross-platform application issues. Workstation Alpha NT Strategy Q. Why did Compaq decide to discontinue Windows NT on the Alpha workstation platforms? A. Compaq re-evaluated the Windows NT strategy for workstations because of vastly improved graphics capabilities on Compaq AP and SP Professional Workstations and limited Windows NT sales on the Alpha workstations. Q. How does this announcement effect(sic Alpha Windows NT customers? A. Compaq continues to ship and support Windows NT version 4.0 (Service Pack 3) on current Alpha workstation platforms (DPW500a, 600a, and XP1000/500MHz). Compaq will qualify, release, and support Microsoft Service Pack 5 and Service Pack 6 for current Alpha workstation products (DPW500a, 600a, and XP1000/500MHz). Q. How will this announcement effect(sic) Alpha workstation products? A. Compaq will not support Windows NT or Windows 2000 on future Alpha products. Platform upgrades and future Alpha workstations will support Tru64 UNIX, OpenVMS, and certified Linux operating systems. Q. Will Compaq support 64-bit Windows NT on the Alpha workstation platforms? A. There are no plans to deploy or support 64-bit Windows NT on Alpha workstations. Q. How does this announcement effect(sic Tru64 UNIX, OpenVMS, and Linux Alpha customers? A. This announcement does not directly affect Tru64 UNIX, OpenVMS, or Linux Alpha workstation customers. We expect to re-deploy certain resources from Windows NT to these operating systems in order to provide a higher level of support there. Q. How does this announcement effect(sic Compaq Intel workstations? A. This announcement does not affect Compaq AP and SP Professional Workstation customers. Q. What is the migration path for Windows NT Alpha workstation customers? A. Compaq will work with customers to help them migrate to the optimum AP or SP Professional Workstation or to one of the other operating systems supported on Alpha. Q. What does this decision mean for Windows NT Alpha workstation OEM customers? A. Compaq will work with OEM customers on an individual basis to determine how best to meet their short and long term needs. This can include OEM specific last buy dates and technical support for hardware. (r)

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