In a move which will send shock waves through the industry, Compaq said yesterday that it prefers the 64-bit Alpha processor to Merced as it offers better performance and is 50 per cent cheaper. Richard George, who runs the Alpha business in the UK, said: "The Alpha chip is better than the Merced chip. It has more applications than the IA64." George revealed that when Compaq releases the 600MHz EV6 later this year, it will have FX32 embedded into its kernel. Microsoft will access this 32-bit backward compatibility when it releases NT 5.0, he claimed. According to Compaq, the Merced carries too much baggage. That baggage, said George, includes the IA32 architecture and a close relationship with bitter rival Hewlett Packard. He said that even if Intel released the Merced on time, the Alpha will offer two and a half times its performance. "By that time, the Alpha will be 50 per cent cheaper than Merced," he said. Meanwhile, Hugh Jenkins, the enterprise director in charge of the consolidated Compaq-Tandem-Digital triumvirate, said that his company was still fully committed to Windows NT and Intel was still its partner. He said: "Ninety per cent of servers will run on Intel." But he said that the Alpha processor could displace Intel as a platform for Windows NT over the next few years. A source close to the company said: "Craig Barratt (Intel’s CEO) never talks to Eckhard Pfeiffer." That has a historical basis, he suggested. Four years ago, The Register exclusively reported a spat Pfeiffer had with Hans Geyer.
The Compaq-Tandem-Digital triumvirate said officially today that its Himalaya servers will stop using Mips chips in 2001. Earlier this year, The Register exclusively reported that the Mips chip was on the chopping block, the day Eckhard Pfeiffer flew to London and two days after he bought Digital. David Russell, Compaq’s Himalayan spokesman, said: "We’ll continue with two new iterations of Mips chips. There are two candidates being looked at, Alpha and Merced. We’ll consider performance, price/performance and time to market." Russell would not be drawn on whether the Alpha was the preferred candidate, despite the comments of his colleagues Richard George and Hugh Jenkins. (See separate story).
Compaq has said that Digital Unix will become the industry standard Unix over the next few years. At a press briefing held at Digital’s former offices in central London, Compaq said that Sequent and Tandem will take Digital Unix (D/UX) and persuade other vendors to adopt it too. Richard George, in charge of Compaq’s Alpha processor in the UK, said: "We’ll achieve 22 per cent of the Unix market share by the year 2002." Hugh Jenkins, enterprise director at Compaq UK, who is masterminding the integration of Compaq, Digital and Tandem at the enterprise level, said: "SCO are not in the business of providing a volume dynamic in the business critical market." George said that Compaq is integrating D/UX with Windows NT. Because they were both "little endian" systems, interoperability was not a problem. Systems like Solaris and HP/UX were Big Endian systems and so could not achieve the same level of interoperability, said George. Jenkins said that "no-one" was buying the Solaris operating system for Intel platforms.
Intel has struck back at Compaq’s unprecedented attack on the Merced processor by insisting that the PC vendor is still committed to the platform. (See other story on the home page - bear with us..) A representative from Intel said: “Compaq has publicly committed to support Merced already, so nothing has really changed.” But a source at Intel who did not wish to be named, went further than that. He said: “We’re talking about a product which has still 18 months to go before it is released and we don’t speculate on its performance. If we’re not in a position to speculate about its performance, neither is Compaq.” He said that Compaq executive Richard George, who yesterday claimed Alpha was a better processor than the Merced and had more software for the platform, was being unfair in that comparison. “You’d expect Alpha to have more software ported than Merced,” he said. “The Alpha chip has been around for five years.” But Rana Mainee, a strategic analyst at rival chip company Advanced Micro Devices (AMD), said that Compaq had to differentiate itself now it had taken over both Digital and Tandem. He said: “It’s no secret the Alpha will be faster than Merced. If Compaq gets its positioning right, it could get a lot of support from the industry. Compaq has always strived to get closer integration in its divisions. “I’d be surprised if having bought into the Alpha platform, they didn’t see it as a big differentiator in that market. This is part of their differentiation. They want to be seen as a computer company and they want to relegate Dell to be a PC company.” Intel is not an investor in The Register and nor is Compaq
Two semiconductor companies have announced poor financial results, casting more doubt on whether the industry is really on the path to recovery. Analog Devices said net profits were 81 per cent down while turnover also fell sharply for its third financial quarter, while LSI Logic issued a profits warning for its third quarter. Analog’s profit for Q3 fell to $8.8 million, from $46 million for the same quarter last year, while sales fell by seven per cent to $294.9 million. The announcement pulled down other semiconductor share prices on Wall Street. The company took a charge in the quarter of $17 million to cover redundancies and fab closures. Analog blamed the general decline in the chip industry, coupled with excess stock. LSI Logic warned its shareholders that its Q3 would show turnover falling by between five and 10 per cent compared to the quarter before, with earnings also reduced. The company blamed the shortfall on Asian financial woes. Last week, National Semiconductor said it expected its profits for the rest of its 1998 financial year to fall.
Canon showed few signs of being affected by the recession in Japan as it turned in a 10 per cent increase in its gross profits for the first half of its 1998 financial year. The company managed to weather the storm by selling additional printers and peripherals in the US market, although its own domestic market remained weak, it said. The company turned in pre-tax profits of 85.7 billion yen on turnover of 805.7 billion yen, and said that demand for the peripherals it sells rose by 16 per cent, while sales of other IT equipment rose by 12 per cent. It also recorded an increase in camera sales of 13 per cent. According to Canon, the weak state of the yen against the dollar allowed it to make gains of 43 billion yen, and also allowed it to make price reductions on its products. The company predicted that it will make gross profits for the year of 168 billion yen, but that additional tax it will have to pay will reduce its net profits.
Pressure on South Korea’s top five chaebols to divest their businesses is increasing this week, according to local English-language paper the Korea Herald. According to the reports, creditor banks and accountancy companies will this week compile a list of subsidiaries of Hyundai, Samsung, Daewoo, LG and SK which should face the axe. After the organisations have put the list together, they will talk with the chaebols and discuss restructuring the subsidiaries if possible, although they will also ask for liquidations and mergers if necessary. Government agencies have insisted that the top five put together such plans by the end of September. The president of Korea has repeatedly pressed three of the chaebols, Hyundai, LG and Samsung, to swap some of their businesses. That comes amidst accusations from chip manufacturers in both Europe and the US that the three are dumping DRAM at a price below cost. Meanwhile, the Ministry of Information and Communication in Seoul said that it is to introduce a venture investment fund for IT companies, worth 10 billion won. Of that figure, 4.5 billion comes from the government, four billion from LG Venture and 1.5 billion from other, unnamed investors.
Samsung has claimed that it is now the world leader in supplying TFT LCDs to the world market. But the news has surprised monitor analysts, who said that it meant Sharp had seriously dropped its market share. Asian reports today said that Samsung had sold 800,000 TFTs in the first six months of this year, giving it a market share of 17 per cent and thrashing Sharp (16 per cent), Toshiba (13 per cent) and NEC (13 per cent). Bob Raikes, director of monitor market research company Meko, said: “Sharp would have had to have dropped very far back. That would have meant a very hard first six months this year. The last figures I saw, Sharp held number one position with 30 per cent market share.” If Samsung’s claim is true, it would be good news for the South Korean company, which wants to beat its Japanese competitors on both CRT and LCD sales.
MicroAge has seen its profits tumble for its third quarter. The US integrator blamed product shortages, particularly from IBM on ThinkPad's and components, for the fall in profits. MicroAge made a $728,000 profit for the quarter, down from $6.6 million last year. Sales rose 24 per cent to $1.4 billion for the company as a whole. Pinacor saw a 24 per cent sales rise to $1.3 billion, while MicroAge sales were relatively flat at $436 million. The difference between the total sales figure and the figures of the two companies takes into account the business they do with each other. The two units do not publish separate profit figures. MicroAge is tipped to off-load its Pinacor distribution business to CHS. MicroAge chairman and CEO Jeffrey McKeever said the company had reduced inventory turns to the lowest number since it went public - 29 days down from 38. McKeever cited the lack of vendor price-protection for the drop, and said that it meant distributors did not want to hold too much stock. Product shortages meant that sales of IBM products declined as a percentage of total product sales. Sales of Apple products were up 44 per cent during the quarter, he said.
Bristol Technology joins the growing ranks of institutions suing Microsoft for anti competitive behaviour. The suit, filed under the Sherman Antitrust Act in U.S. District Court in Bridgeport, Connecticut, alleges that Microsoft injured Bristol and others in the software industry through predatory manipulation of the access to the Windows programming interfaces. Bristol says that Microsoft has caught it up in a charade to suppress competition from other operating systems, like UNIX, Compaq's OpenVMS and IBM's OS/390. Bristol says that Microsoft created a dependency on the Windows interfaces, and is now restricting access in away that it knows is oppressive, unworkable and unreasonable. The injunction would require Microsoft to provide Bristol with source code for future versions of Windows operating systems, including Microsoft Windows NT 4 and Windows NT 5. Keith Blackwell, chairman and president of Bristol, said: "It is daunting for a company of Bristol's size to take on a company as large as Microsoft in court." The dispute should haveen simple to resolve in inter-company negotiations, he said: "However, Microsoft did not negotiate in good faith so we have no choice but to take our case to court." The suit relies on the fact that a monopolist may not stop dealing with its competitors if that cessation injures competition. Bristol believes it has a strong case, and says it will pursue it vigorously. No-one at Microsoft was available to comment. ®
Seagate Technology is changing the way its subsidiary,Quinta, goes to market with OAW optically assisted Winchester (OAW) technology. In an effort to streamline its operations and avoid duplication of infrastructure, all research into optical storage technologies, including OAW will be done by Quinta. The company hopes this will get the technology into its product line more quickly. Seagate says that the move will allow Quinta to focus on its core competency, optical tech development, while putting the heavyweight punch of the Seagate brand behind the marketing side of operations. As soon as a technology is proven to be reliable, it will be transferred to Seagate's labs for product development and delivery. Quinta is currently developing technologies capable of achieving areal densities much higher than today's hard disc drives and hopes to break the superparamagnetic limit, the theoretical areal density limit of traditional magnetic recording technology. The OAW technology will demonstrated for the first time at COMDEX '98. "Quinta has made significant progress in the past year in developing OAW technology as well as other technologies that could impact current magnetic recording," said Steve Luczo, president and CEO of Seagate. Steve Kitrosser, president and CEO of Quinta, said: "Without this integration, there was a risk of becoming a one-product-at-a-time company, leaving valuable technologies sitting on the shelves, waiting for commercialisation. This change allows Seagate to fully benefit from the 200-plus engineers and scientists working in our labs in San Jose."
What's the connection between Cilla Black and the channel? It's not a particularly obvious link, unless you happen to work at Ideal Hardware, based in New Malden, Surrey. For it is there in the offices of the storage and hardware distributor that you will find that rarity in the IT industry - a story with a happy ending. It all began 10 years ago on Blind Date, when Ideal Hardware's European sales manager Alex Tatham picked out the woman who was, three years later, to become his wife. They've been having a lorra, lorra laughs ever since. The Tathams, Alex and Sue, were the first couple to marry as a result of meeting on our Cilla's Saturday night show and they now have two children - Emily, aged four, and Charlie who is two. Happy endings, don't you just love 'em? Back in 1988, Alex's big line in front of the cameras was that he worked part-time as a Tarzan-O-Gram in the evenings. Sounds like the perfect training for life in the channel, as anyone will tell you - it's a jungle out there.
Apple has reported record consumer demand for the iMac, which went on sale in America on August 15. The computer is leaving shops as fast as Apple can get it on the shelves. Many dealers have reported sell outs and are taking orders for delivery this coming weekend and further ahead. Apple is going all out to sell the iMac, and is backing the launch with the largest marketing campaign in the company's history. The company has spent more than $100 million on media advertising this calendar year. Steve Jobs, Apple's interim CEO, said: "iMac sold out at most of our dealers this past weekend and we're refuelling them with tens of thousands more for this weekend." Resellers have been describing it as Christmas is August. Computerware said it sold more iMacs on Saturday than it did PCs in the whole of July. Jim Halpin at CompUSA said it was the biggest launch in his company's history. "Apple is back, and iMacs are flying off store shelves across the USA," he said. The processor in the iMac is twice as fast as similarly priced PCs and according to BYTEmark integer test, 40 per cent faster than the fastest PC available. It has built in 100MB Ethernet and 56Kb/s modem. It launches in the UK on September 5, and anticipation of its arrival is enthusiastic. Dave Ruddell, sales manager at Albion, one of Apple's biggest UK resellers, said that he expects to clear the stock arriving for the launch on the first day. "It's the biggest interest in and Apple computer that I have seen for ten years," he said.
Microsoft was accused of shortsightedness by Computer 2000, following the software vendor's decision to reject CHS and C2000 as OEM distributors. C2000 claimed it would have increased Microsoft sales to system builders - if it had got the go-ahead. Microsoft turned C2000 and CHS down as OEM product distributors after fears that smaller distributors specialising in the system builder market would be frozen out. But C2000 components division general manager Sven Mahon-Daly said many system builders were already sourcing OEM software from his company - even though C2000 had to sub-distribute the software itself from rival wholesalers. "We have bigger credit limits than the smaller distributors, so system builders are coming to us anyway," he said. According to Mahon-Daly, system builders are a growth area for C2000. Microsoft should look at what broad-line distributors could do for the OEM market, he said. Existing Microsoft OEM product distributors were pleased that Microsoft had come down on their side. Alex Campbell, Osmosis marketing manager, said he was happy with the decision to retain the OEM distributor status quo. "We don't want Microsoft to over-distribute into the system builder market," he said.
EDS has scooped up a £300 million PC desktop outsourcing contract from BP, delivering a stunning blow to the oil vendor's current roster of 40 channel suppliers. Under the five-year contract, EDS will take over procurement of PCs for BP's 13,000 users in the UK. It will build a dedicated call centre in Durham to act as BP's dedicated IT support desk. Initially the BP contract is confined to the UK, but could be rolled out to the 142 countries in which BP operates. The support deal is also expected to be extended further to cover the business of Amoco, with which BP has announced a merger. BP UK currently has three separate PC suppliers and around 40 different IT suppliers. Under the five-year deal all PC purchasing will go through EDS. An EDS spokesperson stressed that its PC procurement would be vendor-independent, and said that EDS is not aligned with any particular PC manufacturer. In the UK, the company typically sub-contracts PC fulfilment - configuration, delivery and installation - to product resellers. Computacenter, EDS' partner in GCAT, the UK government's online IT procurement catalogue, is tipped as hot favourite to pick up the lion's share of the BP fulfilment business. EDS, which last year had sales of over £10 billion, has in the past been able to strike huge deals with PC vendors to supply large numbers of PCs across a number of its outsourcing contracts. EDS accounts for an estimated 8 per cent of the UK government's IT spend.
Chip giant Intel has admitted its small footprint flash memory card will never become the accepted standard for use in portable consumer devices and is backing out of the market. Intel's Miniature Card flash memory module has been overshadowed by rival products from Toshiba and SanDisk - SmartMedia and CompactFlash, respectively. The Intel card measures 38x33x3.5 millimetres and uses a software derived file transfer system, whereas the Toshiba and SanDisk offerings use a hard dis- like transfer interface. It was found to be less well suited to portable devices than its two rivals and despite getting off to a good start in 1996 was soon struggling to compete; SanDisk secured AMD, Fujitsu and Sharp among its supporters. The Intel Miniature Card also took up more space than SmartMedia and CompactFlash. The small flash memory cards are integral to the digital camera market, where the competition has become cut-throat. Earlier this year, SanDisk alerted reporters to complaints from users of the rival Toshiba product which were being posted on bulletin board sites. The digital camera market represents only 10 per cent of the market for flash memory and as such losing out here is not a major headache for Intel, however this is a rapidly developing market which Intel has now effectively dropped out of.
The GCAT contract won by Computacenter in September 1997 helped boost its half-year sales by 39 per cent to £766 million. Profit for the half-year to 30 June, the first results since Computacenter's flotation, were up 42 per cent to £31.3 million. Net margins remained solid at 4 per cent. The GCAT contract - an online catalogue of preferred government IT suppliers administered by EDS and Computacenter - helped boost sales into the public sector. Computacenter said that growth in the first six months was exceptional, with most public sector procurement being done in the first half of the year. But public sector sales were unlikely to be as strong in the second half of the year, according to Computacenter chairman Philp Hulme. The bulk of sales - and profits - for the half year came from the UK, but Hulme called the 56 per cent growth in Computacenter France "outstanding". Turnover in the UK was £688 million with £32.7 million profit, in France turnover was £70 million and profit £1.14 million, with Germany posting the only loss of £574,000 on sales of £13.9 million. Cash flow was positive, with a net inflow of £1.8 million, compared to a net outflow of £11.2 million last year. The cash-flow figures do not take into account the £49.6 million that Computacenter got through its flotation earlier this year.
Hewlett Packard has brought out two home PCs in its Pavilion range based on AMD K6 chips, which it claims will prove its commitment to the consumer PC market. The two models in the Pavilion range, the 6340 and 6350, will be sold through, PC World, Currys, Tempo and Toys R Us, with prices advertised as starting at £849 - including VAT and 14 inch monitor for the 266 MMX K6-based 6340, with 32Mb SDRam. There are Intel-based models available - the PII 350 version with 64Mb SDRam is priced at £1649, including VAT and 15 inch monitor. Home users can also take advantage of three months free Internet access, including email. Pavilion bundles also offer hard drives than can be expanded up to 6Gb, up to 8Mb video Ram and software including Microsoft Works, Money 98 and Encarta World Atlas 98. The systems come with up to six bays and five expansion slots. Product manager for the Pavilion range Martin Hurren stressed that making the PCs easy to use was a priority. "We listened to customers and designed a full range of HP Pavilion multimedia PCs to meet their needs. Ease of use is our paramount importance for consumers and we ensure that their experience is second to none," he said.
Taiwanese DVD makers expect a shortage of product supply in the fourth quarter of this year, as manufacturers struggle to ramp up demand for the Christmas period. The problem for manufacturers is that the DVD-RAM specifications will not be settled by vendors until October. This only gives the large drive manufacturers, like Sony and Matsushita, two months to ramp up production before Christmas. Many PC manufacturers are also holding back from using DVD drives until the technical details are finally ratified. A spokesman for Taiwanese vendor AOpen said that drives on the local market were selling at $100, which meant they were cheaper than high-end CD-ROM drives. Prices of DVD drives in the Far East have been falling faster than expected, with pricing likely to come down to $80 by the end of the year. Supply of the drives is not expected to boom until Q1 of next year. According to estimates, the market for DVD drives is set to double over the next year, and that drive sales in Europe and the US are set to double to 4 million units.
A steering committee has been set up to ensure compatible fibre channel clustering across varying operating environments. Initiated by the Fibre Channel Community (FCLC), the steering group will address the need for an affordable, interoperable open clustering technology. Clustering has become more widely known since the introduction of Microsoft's clustering solution for NT. Dave Guerrero, chairman of the steering committee, explains: "In a formal context clustering is a group of servers and workstations, linked and managed together to function as a logical computing unit by sharing processing and storage resources. The high bandwidth, low latency and networking capabilities of Fibre channel make it an excellent cluster interconnect technology." The committee plans to present its recommendations to the ANSI committee responsible for governing the Fibre channel specification. The first meeting is scheduled for August 24 in Huntingdon , California. Speakers from IBM, Microsoft and Novell will present information for discussion. Email contact for more information about the initiative: firstname.lastname@example.org.
DATA RACE is suing Lucent technologies for patent infringement. The company is asking the Court to issue a preliminary injunction prohibiting Lucent from marketing and selling the Virtual Telephone system. It has filed a lawsuit in Federal District Court in San Antonio, Texas, seeking damages and a permanent injunction prohibiting Lucent Technologies from violating the Company's intellectual property rights. The patent, called "System and Method for Providing a Remote User with a Virtual Presence to an Office," was issued by the U.S. Patent and Trademark Office in June this year.