16th > November > 1998 Archive

The Register breaking news

Comdex a year ago: Bill tells it to the marines

The US government is on Bill Gates' tail in the shape of the DoJ, so the lad's new-found intimacy with the Marine Corps may be ominous - military coups, anyone? Following-up a goodly slab of mom, apple pie, my wonderful daughter and why the PC is great, Gates' Comdex keynote last Sunday (see Footnotes some more) drafted Major Jim Cummiskey to demonstrate the digital nervous system in action. We recall that the US military ran on Intel 80186-based portables in the last Gulf war, but Major Jim has no intention of being caught with his pants down this time around. So the Marine Corps is working on battlefield intranets that use ruggedised notebooks and CE devices, and he says he's real excited about CE 2.0. Ominously, Major Jim's demo called in an airstrike on a threatening tank battalion, so watch out for what Bill puts into CE 3.0, kiddies. For the moment though he confined himself to an airstrike on a NetPC instead. Delete the program files on an NT 5.0 workstation and it miraculously heals itself. Swap in a new workstation and Intellimirror lets you just carry on where you left off. But he didn't show this happening on Windows 98 (we hear it might not), and he didn't mention the latest shippage slippage for NT 5.0. This is actually pretty key, because the major components of the NetPC advantage aren't actually deliverable until 5.0 ships, and the longer it is until that happens, the more vulnerable the edifice will look. ®
John Lettice, 16 Nov 1998
The Register breaking news

Microsoft claims DoJ hand-picked IE critics

Microsoft has attacked the written testimony of computer consultant Glenn Weadock, who is due to take the stand at the antitrust trial today, as "a collection of opinions, not a statement of facts." In a statement Microsoft claimed that companies Weadock had talked to for his testimony had been hand-picked by the government. "It would be interesting to ask why the government did not speak to some of the major companies that are building innovating applications on top of the Windows platform utilising Internet Explorer technologies," said the statement. But the companies Weadock talked to are in themselves interesting - there's Microsoft's Seattle neighbour Boeing, for example. Weadock's testimony takes the form of consultation with numerous companies over their views on browsers, and their plans for future deployment. In general, they seem to think browsers are applications, not operating systems, and that being forced to take IE as part of Windows 98 loses them flexibility and choice, and causes them needless expense. But nevertheless Boeing is moving from Navigator to Internet Explorer - why? Says Boeing's 18 month tactical plan, quoted in Weadock's testimony: "The main reason for moving to Internet Explorer 5.0 in Q2/3 of 1999 are: We do not have a choice [Boeing's italics] … the integration between Internet Explorer and the desktop operating system cannot be fully disabled … Our only choice is whether we will install two browsers or just install Internet Explorer." Of course, the DoJ may well have 'hand-picked' companies especially hostile to Microsoft for Weadock's investigations. Like Boeing, maybe? Well. Here are some excerpts from a Microsoft release of May 27 1997: "Boeing selected Systems Management Server to provide desktop management based on Systems Management Server's ability to scale to meet the company's needs. Microsoft and Boeing teamed up to test the software … "Based on our scalability testing up to 100,000 clients, we're confident that Systems Management Server is a firm foundation that meets the needs of The Boeing Company," said Chris Kent, director, computing and network operations at Boeing. Or there's this piece of Microsoft PR: "Among large enterprises, over half of the 1998 Fortune 50 have already adopted Microsoft Exchange Server as the corporate standard. Boeing and General Electric have successfully deployed over 125,000 Exchange seats each." So Boeing is a committed NT shop that doesn't buy the IE bit of the strategy, but that's about it. The DoJ has hand-picked one of Microsoft's biggest fans, apparently. Other hand-picked companies include Chrysler, Informix, Citibank, FedEx, Ford, Morgan Stanley and US Steel. ® Complete Register trial coverage
John Lettice, 16 Nov 1998
The Register breaking news

French government publishes details of Thomson stakes

The French government has released details of the sell-off of slabs of government-owned Thomson Multimedia to Alcatel, DirectTV, NEC and Microsoft, but the bottom line remains secret, apparently. The four companies are to each buy a 7.5 per cent in the ailing operation, and on Friday the French Economic Ministry filed a legal notice specifying the nature of co-operative agreements the four would run with Thomson. The actual bottom line of how much the companies are paying however remains undisclosed - one might suspect that given the state of play at Thomson, it's very little. The four 'technical, industrial and financial co-operation' agreements all seem to revolve around consumer TV and networking technologies. Alcatel will help develop digital networking technologies, DirectTV will co-operate in decoder and digital TV devices, while NEC's area will be DVD and wide-screen flat panel displays. Microsoft's contribution is interactive TV and Internet TV-related products. Microsoft itself received a quid pro quo for agreeing the investment - the company will get CE accepted as Thomson's standard for Internet via TV, and Thomson will license Microsoft WebTV-based set-top boxes for sale under the Thomson brand in Europe and RCA in the US.
John Lettice, 16 Nov 1998
The Register breaking news

Iomega to update Zip to 250MB

Iomega will this week announce the successor to its popular 100MB Zip drive in a move designed to spoil Sony's soon-to-ship 200MB HiFD drive and Samsung's announcement of its forthcoming 123MB Pro-FD drive. The new Zip drive and media will offer a capacity of 250MB. However, it's not yet clear whether it will provide an equivalent performance boost over the Sony and Samsung drives, both of which are significantly faster than the original 100MB Zip. Equally, Iomega has yet to say whether the new Zip will offer backward compatibility with floppy drives, a feature all three of its rivals -- the Sony and Samsung drives, and Imation's SuperDisk drive -- offer and which the 100MB Zip failed to provide. Floppy disk support is key to where Iomega hopes to position the new drive. According to storage market researcher Disk/Trends, quoted on ZDNN, Iomega has had the 250MB ready for some time but was waiting for the Sony drive to ship before announcing its own product.That implies it is focusing more on the OEM floppy drive replacement market than the personal storage business that brought success to the original Zip. OEMs have been reluctant to commit to Zip fully because they still needed to fit a floppy drive. Its rivals, however, can argue that with their units, PC vendors need not fit a floppy drive. However, prices have so far been too high for them to view these high capacity drives as anything other than optional to Iomega's benefit. And with renewed interest in the 'click of death' fault allegedly endemic in 100MB Zip drives -- allegations recently brought back to life through a lawsuit filed against the company (see Iomega sued over Zip-zapping 'click of death'), the new Zip also provides Iomega with a neat way of sidestepping the problem. ® See also Samsung readies fast floppy replacement
Tony Smith, 16 Nov 1998
The Register breaking news

Who wants to be a BillGatesionnaire?

Records filed with the US regulatory body the Security & Equities Commission (SEC) show that Bill Gates has sold nine million of his shares in Microsoft in the last few weeks. The biggest transaction was completed on Friday the 13th, when Gates disposed of five million shares. On Friday, Microsoft shares were trading at between the $104 and the $109 mark, netting Gates a sum around the $95 million dollar mark. A number of other senior Microsoft executives, including Bernard Vergnes and Paul Maritz also sold sales in a similar period. ®
A staffer, 16 Nov 1998
The Register breaking news

NWL restructure to affect Wales

South Wales is bracing itself for another set of job losses after the semiconductor silicon wafer foundry Newport Wafer-Fab Ltd confirmed it was to undergo a period of restructuring. Chief executive Steve Byars said that the business was "fundamentally sound" despite the difficulties in the semiconductor industry but declined to confirm newspaper reports that job losses were imminent. Instead, he issued a statement announcing the restructuring programme and blamed the continuing financial crisis in the Far East where NWL's parent company QPL International is based. Around 550 people work at the plant in south Wales, the largest independent semiconductor foundry in Europe, which makes microchips for leading brands and designers. The company has recently ploughed £230 million into its Newport foundry with a series of capital investments, a spokeswoman said. She declined to say whether her company had a grant from the Welsh Development Agency, whose policy has already come under some scrutiny. NWL is a subsidiary of QPL International Holdings, a semiconductor materials and services group based in Hong Kong. With a worldwide workforce in excess of 3,500, QPL reported a turnover for 1996/7 of HK $2.68 billion. ®
Tim Richardson, 16 Nov 1998
The Register breaking news

Oracle courts Dell, Compaq, HP for Microsoft challenge

Oracle is negotiating with Sun and a range of PC manufacturers to produce thin server appliances which use the company's 'Raw Iron' implementation of Oracle8, a 'no operating system' version of the database which Oracle intends to ship in Q1 99. Over the weekend Oracle boss Larry Ellison invited reporters into his beautiful home and pre-empted his Raw Iron announcement, which is expected this evening, US Pacific Time. He says he's pitching Raw Iron at Sun, Compaq, Hewlett-Packard and Dell, which effectively means it will run on at least Sparc and Intel architectures, and which suggests that Oracle may be in-deep with Intel on the subject. A couple of weeks ago Intel announced a thin server appliance based on a 486 processor and VXWorks embedded OS (See story). Raw Iron will clearly be attractive to Sun, Oracle's co-conspirator in the anti-Microsoft camp, but if Ellison really is on the brink of turning the PC big three then Microsoft could be in serious trouble. HP is pursuing its own Java/embedded OS/thin appliance strategy in the curious and slightly contradictory company of both Microsoft and Sun, but there's a logic to its getting together with Oracle in the thin server arena as well. Compaq and Dell entering the fray, however, would be big news. It seems likely that Oracle has been co-operating with Intel in some measure on thin server appliance reference designs, extending the work they've done together on NCs. Getting a couple of the top PC OEMs to go with appliance servers would therefore mean Oracle was finally achieving breakthrough. It may also put Intel in the position of being able to 'promote' A N Other OS into the mainstream, and to put several over on its old Wintel buddy, Microsoft. ®
John Lettice, 16 Nov 1998
The Register breaking news

3Com spins corporate direction for Palm

In the wake of Palm Computing founders and 3Com defectors Donna Dubinsky and Jeff Hawkins announcing details of their new company, Handspring, 3com, the current owner of Palm has engaged in a bit of spin control in an attempt to scotch rumours that the departure of Hawkins and Dubinsky, and with them several key Palm engineers, has left Palm directionless. Speaking at industry shindig the Bloomberg Forum, 3Com chairman and CEO Eric Benhamou said the PalmPilot will account for ten per cent of the company's revenue next year. "PalmPilot has become our fastest growing line of business," he added, and pointed out 3Com has sold over one million of them this year. Palm devices account for 70 per cent of the US handheld market, he claimed. Benhamou's claims finally provide a clear reason why he rebuffed attempts by both Apple interim CEO Steve Jobs and Bill Gates to buy the Palm division. Both potential purchases had been lauded by analysts as better partners for Palm than 3Com, a company otherwise focused solely on networking products. And to counter claims that the company has an even more unclear idea of what to do with Palm technology since Hawkins and Dubinsky quit (see Palm founders kick off new company, Benhamou suggested that the Palm is a networking product. It's "not just a nice device that people have in their shirt pocket", he said. On the contrary, it's now a device that gives them access to corporate databases and the Internet -- a sort of portable NC, in fact (it certainly makes more sense as an NC than set-top boxes do). Stressing the point, Benhamou reminded the audience of 3Com's partnerships with Oracle and SAP, both of whom are working on software to allow Palms to access data held in their systems. The 3Com chairman also said the company will be making further acquisitions "over the next few months", though beyond admitting none will be as large as the US Robotics buyout, he gave no further details. ®
Tony Smith, 16 Nov 1998
The Register breaking news

AMD introduces 400MHz part

AMD has formally announced the introduction of its 400MHz K6-2 chip. And the company claimed that Compaq, which uses the chip have combined forces to offer the first broadband Internet-ready PCs. That might be true in the US but there are still problems with DSL technology in Europe, as reported here earlier. Introduced today, the Presario 5190 and Presario 5100c series, with Compaq’s 1.5Mb Max Digital modem, are powered by the AMD-K6-2/400 processor. K6-2 processors operate at speeds of 400, 380 and 366 MHz. Rana Mainee, AMD Europe market planning manager, claimed the introduction of the 400MHz chip put AMD within one speed grade of competitor Intel’s fastest Pentium II. He described the Compaq machines as integrated boxes for Internet usage for first-time Internet home-users. ®
Linda Harrison, 16 Nov 1998
The Register breaking news

Gates lampoons DoJ in Comdex Keynote

Boy, he’s rich and he’s got a sense of humour too. “My last year has been really exciting,” said Bill Gates, kicking off this year’s Comdex Fall keynotes. A quick video of his year’s highlights and he soon had the 5,000-strong audience -- most of whom had queued at the Las Vegas Hilton Theater for more than two hours for the privilege of seeing the great man -- eating out of his hand. The DoJ, the plasticine encounter with Michael Flatley in Celebrity DeathMatch, the notorious Belgian thank God it was a custard pie incident, the blue screen bug exposed at the Windows 98 launch… it was all there on screen. A second video – shown later in the one hour presentation – featured Jay Leno, Tom Brokaw and George Lucas – and incorporated parodies of Gap adverts, Lord of the Dance(in which Gates and Steve Ballmer dressed and danced like Michael Flatley) and another film, whose name escapes us, in which the likely lads lampooned the DoJ hearings. Laughter over, Gates motored into a slick presentation, in which he preached the twin virtues of power and simplicity. Powerful Intel chips had enabled Silicon Graphics International to port its technology to the Windows NT platform Gates said, introducing SGI senior vice president Tom Furlong. A clearly uncomfortable Furlong supplied a sneak peak of SGI's NT- flavoured Visual Workstation, due to ship in January for less than $4,000. The results are stunning… worth checking out. The big technology preview of the day was something called ClearType, a software-only attempt to make reading easier on LCD screens. Perhaps sensing that this is not the easiest technology to display on giant overhead monitors, Bill Hill, Microsoft Research Group and ClearType inventor, came on stage wearing a kilt and the fullest beard this side of Afghanistan, and did a passable -- if unconscious -- imitation of Billy Connolly. Apparently, ClearType works by splitting pixels and it is set for incorporation into Microsoft apps and operating systems, Gates revealed. ClearType-enhanced displays will encourage market take-up of electronic books, he reckons. We shall see. Gates also essayed the virtues of simplicity and ease of use other Microsoft technology, citing idiomatic English commands in SQL Server 7.0, Windows CE-enabled devices, and search information tools that look, feel and act the same. It has been a very long time since The Register saw grown men and women applauding better cut and paste techniques(to be introduced in Office 2000). But, encouraged by the Microsoft claque sitting at the front of the Las Vegas Hilton Theater, the crowd were clapping like sea-lions. Gates also forecast easier-to-use peripherals. At one point a celebrity motocross rider-cum comedy turn called Rusty Crank roared on to the stage on his bike, and then roared his way through a demonstration of a better kind of joystick used with upgrades of MotoCross Madness and Flight Simulator. Microsoft's budget for Bill’s keynote presentation easily ran into seven figures. In successfully positioning Gates as a rounded kind of guy, and as Microsoft as an rounded kind of technology innovator, the Keynote was worth every penny. ®
Drew Cullen, 16 Nov 1998
The Register breaking news

Apple extends iMac hire purchase scheme to UK

Apple has brought a variation of its 'own an iMac for $29.95 a month' deal to the UK. Over here, buyers put down a £50 deposit, are given a five-month deferred payment period, then pay £29.95 a month for 42 months. So you can now slap down a Visa or Mastercard and pay £999 (inc. VAT) for a machine there and then, or choose the high-purchase scheme and pay a grand total of £1308 (inc. VAT), which equates to a very nice markup of £309 for the boys in Bondi blue. That assumes you pay your credit card bill in full. On a credit basis, Apple's APR of 17.9 per cent is good, but not as good as the better credit card APRs. ®
Team Register, 16 Nov 1998
The Register breaking news

Comdex/Fall goes Intel 370-pin crazy

Soyo is readying a 370 pin motherboard as a number of manufacturers in Taiwan and in the Far East seek to obey Intel's dictat, according to sources close to the company's plans. The company has just released a MicroATX format board based on familiar socket systems but The Register understands that all Taiwanese companies are under non disclosure agreements not to mention the 370-pin socket they will use. Nevertheless, at Comdex/Fall this week, behind closed doors, the majority of Taiwanese vendors will troop before Intel executives to let them examine the quality of their product, according to sources close to Soyo. The Register will be first off the block with details of the 370-pin motherboards being shown at Comdex/Fall. We may even be able to review it. Intel refuses to comment in detail on its future directions. ®
Mike Magee, 16 Nov 1998
The Register breaking news

DSP filters down to PCs with Aztech

Aztech has initiated a fresh release of its PCI 386DSP sound card using Qsound technology. The company said that its card was a DSP breakthrough and did not depend on the processor to supply the usual functions including 3D positioning and wavetable synthesis. The card also uses Environmental Audio Extensions (EAX) and Qsound modelling technology, said Aztech. It will support games like Unreal from Epic and Forsaken from Acclaim, claimed Aztech. Singapore-based Aztech would not say which DSP chip was used to make the breakthrough. ®
A staffer, 16 Nov 1998
The Register breaking news

Citrix scores big hit in Vegas

Citrix shouldn't be short of accommodation in Vegas this week, having just announced the deployment of a 1,200 terminal WinFrame/MetFrame system across the four hotels in the Mirage Resorts empire. These are the Mirage, home of the volcano and Siegfried and Roy; Treasure Island, where a ship full of dubious English accents sinks several times a day (weather permitting); Bellagio, the flash new Italian theme complex built on the site of the old Sands, and the trad downtown casino-themed casino, the Golden Nugget. The Citrix system is running the outfit's new property management system, and is claimed to have improved use of bandwidth, increased employee productivity and reduced total cost of ownership. The property management system deals with hotel reservations, check-in and room transactions. The largest implementation is at the Bellagio, and according to Citrix, this resort has reduced access times by more than half since it opened in October. It's not entirely clear why in that case it didn't open with Citrix systems up and running in the first place. Or indeed what it was using when it opened. Or how it can make this calculation based on such a small amount of data. But who are we to, etc? ®
Bugsy Siegel, 16 Nov 1998
The Register breaking news

Employee of distributor Westcoast hits employee of dealer Action

Friday the Thirteenth proved unlucky for a top Westcoast employee when he was sacked after hitting an Action Computer Supplies member of staff on the nose at a company function. The nose was not, apparently, broken. David Gully, the Westcoast account manager responsible for Action, lost his job on the fated day after the fracas at the Radisson Edwardian Hotel. Sources close to Westcoast management said Gully hit the Action product manager on the nose in an unprovoked attack in the early hours of Friday morning. Westcoast was Action’s guest at the event, held annually as a thank you to suppliers and to mark the mail-order reseller’s year-end. But the events which followed at the Heathrow hotel ended Gully’s three to four year career at the distributor and he was told to leave on 13 November. Duncan Wilkes, Action chief operations officer, confirmed a nose was hit. He said: "We’re shocked at the incident, and appreciate the action taken by Westcoast. It is obviously an issue for them to deal with, not us." ®
Linda Harrison, 16 Nov 1998
The Register breaking news

Cable & Wireless unveils $1 billion European network

Cable & Wireless has announced a five-year, $1 billion plan to build a voice and data network across Europe, linking 40 of the continent's largest cities in 13 countries. Work on the network will commence with the delivery of a high-speed (155Mbps) Asynchronous Transfer Mode (ATM) backbone across Europe linking "key European business centres". European carrier Hermes Europe Railtel will be supplying this part of the network. It will also be wired into C&W's networks in the UK, US and Asia/Pacific. Work is already in progress connecting those three hubs together. The aim is to provide global Internet services. Over the next two years, C&W will roll outfibre-optic links between 18 key European cities. This part of the network will be bought from Global Crossing's Pan European Crossing network. It will be capable of handling five million simultaneous phone calls, said C&W. The network will then be extended to the remaining 22 locations and will begin to provide IP. First of all, however, C&W needs to obtain voice and data telephony licenses in most continental European countries. ®
Team Register, 16 Nov 1998
The Register breaking news

Compaq disappoints Europe

Compaq has launched a new range of PCs which come ready equipped with DSL (Digital Subscriber Line) technology 300 times faster than standard 56k modems. Priced at $1,599 (£960) and only available in the US, the PCs will not be available in the UK until one of the carriers offers DSL-compatible connections. There is a further problem because this sort of technology is actually illegal in many major European countries, with little sign of respite. BT began a trial of the technology in London a couple of weeks ago and since then around 900 homes and business have signed up to the scheme. "Around eight people are joining the pilot each day," said a spokesman for BT. "It's progressing well," he said adding that it is still "very early days". A spokeswoman for Compaq was equally tight-lipped about when the technology would be available in the UK. The introduction of anything that will speed up internet access is seen as essential if the web is to become as pervasive as TV or the telephone. Poor connection speeds and sluggish download times are widely regarded as the major bugbear of net users. The introduction of DSL technology would make accessing video and audio over the web almost instantaneous. ®
Tim Richardson, 16 Nov 1998
The Register breaking news

Cyrix demos $300 wireless Internet tablet

In Las Vegas today Cyrix demonstrated prototypes of an x86 compatible wireless Internet access device, WebPAD, which the company says could be in production at a price of $300 by the middle of next year. The WebPAD is one of the earliest fruits of Cyrix's PC-on-a-chip design efforts. It weighs three pounds, has a 10.4in LCD, a Cyrix MediaGX processor and a Harris Semiconductor 2.4GHz wireless networking connector with a range of 500 feet to a base station transceiver. It will support various diskless operating systems, including QNX, Windows CE and Embedded NT, claims Cyrix. The company is pitching the device at cable TV companies and ISPs, and that it would probably go out as a subsidised or rented device as part of a monthly connection fee. At the moment the WebPAD is a 'proof of concept' device roughed-up by Cyrix's worryingly-named Conceptual Products Group (motto - 'we think up things that don't exist'). But the company intends to have an optimised reference design available in Q1, and this will use a new low-voltage implementation of the MediaGX. Also in Vegas Cyrix has announced that the MediaGX is being used in a raft of new products. These include Boundless Technologies new Capio line of Windows-based terminals, point of sale systems from Siemens, Boca's set-top box system and Atari's Site4 arcade console. Most of these are emerging technologies which could finally see Cyrix's shipment figures curving upwards. Provided they emerge, that is. ®
John Lettice, 16 Nov 1998
The Register breaking news

Gates: He's just a guy who can't say N… N…

The Bill Gates video excerpt has become a welcome commercial break from DLL-heavy testimony at the Microsoft trial, but today his Billness surpassed himself, as the court watched him determinedly avoiding saying the N word. A bemused Judge Thomas Penfield Jackson smiled wanly as the Good Ship Gates sank gently beneath the waves. The tape showed DoJ lawyer David Boies asking Gates about an email he sent to Microsoft executives in January 1996, where he began: "Winning Internet browser share is a very, very, important goal for us." Boies reasonably asked which rival companies Microsoft was competing against, in that case (Register hint: according to Jupiter, in mid-1996 Netscape held 83 per cent of the browser market, Microsoft 7 per cent). Responded Bill: "It doesn't appear I'm talking about any other companies in that sentence." Boies persisted. "You seem to be implying that just because share involves comparing multiple companies, that when I wrote that sentence I was talking about other companies. I've really read it very carefully and I don't notice any other companies in there." Bill's dead right here, he really doesn't mention other companies, and Boies pursues this, suggesting: "You mean you don't see any other companies mentioned in that sentence. is that what you're saying?" Following on from the testimony of his illustrious president in another place, Bill says: "The sentence doesn't appear to directly or indirectly refer to any other companies… You keep trying to read Netscape into that sentence and I don't see how you can do that." And then the memory goes. He can't remember writing the email, and he doesn't know what he meant. Says Boies, "My question is what non-Microsoft browsers were you concerned about in January of 1996." Gates: "What's the question? Are you asking me when I wrote this email or what are you asking me about?" Boies: "I'm asking you about January of 1996." Gates: "That month?" Boies: "Yes, sir." Gates: "And what about it?" Boies: "What non-Microsoft browsers were you concerned about in January of 1996?" Gates: "I don't know what you mean concerned." He displayed almost equal heroism when asked about a memo sent to him by Brad Chase, which said: "We need to continue our jihad next year." Who's we? Apparently not Microsoft, claimed Bill somewhat puzzlingly. Just Brad and Bill then? Mounting their own holy war against someone/something? But not Netscape? Israel? World communism? We remain unenlightened. Fortunately the vision of Microsoft's higher echelons parachuting into the Gaza Strip, AK-47s at the ready, was dispelled by Bill's Encarta-free definition of jihad: "I think he [Chase] is referring to our vigorous efforts to make a superior product and to market that product." In the curious world of Bill Gates, "Bomb the bastards back into the stone age" is no doubt the sort of thing that translates into "build great integrated products that make corporations more proactive, empower their staff and help them work better." ® Complete Register trial coverage
John Lettice, 16 Nov 1998
The Register breaking news

Delegates bribed to watch Pfeiffer speak

Compaq set up a soup kitchen today at the Las Vegas Hilton Theatre. Unsure of CEO Eckhard Pfeiffer’s Keynote speech pulling power, the Texas computer giant bribed attendees with free lunch boxes. Only, as Pfeiffer said himself, there is no such thing as a free lunch… delegates had to sit through his speech first. Self-deprecation is clearly the order of the day with corporate speechwriters. But the speech was short -- half an hour tops -- and the auditorium was packed. Pfeiffer could be accused of having a charisma by-pass. But he carries himself well. Tall and tanned, he looks like a patrician US senator and -- except for a hint of a German accent -- sounds like one. His Comdex Keynote was all about…Compaq. Pfeiffer is the George Bush of the computer industry -- he is uncomfortable with the Vision Thing. Barring calls for the computer industry to “soften the hard edges of technology” and to get a sense of humour (accompanied by the laughable assertion that Compaq does not take itself too seriously), he refrained from making sweeping statements. Mercifully, he also avoided talking about warehouses, his favourite subject. Pfeiffer’s sub-theme of the day of the day was equally clear –- it can be summed up in the unspoken phrase: “We’re better than Dell”. Compaq’s move to sell direct into the small and medium business market, announced last week, was not playing copycat to Dell and Gateway, but a superior hybrid channel model, he said. The value proposition for the new Prosignia SMB lines sold direct was “superior to anything our competitors have to offer,” Pfeiffer claimed. Selling direct makes good sense in the SMB sector, where Compaq’s market share is weakest. On the consumer and small business side, in the US and Europe, the company has a call-centre infrastructure to handle small businesses and consumers directly. It will be interesting to see what happens when Compaq’s Customer Choice extends upmarket into the corporate and enterprise sectors. As part of the company’s new Customer Choice regime, Compaq will sell products “the way (the customers) want, where they want and when they want,” Pfeiffer proclaimed. This is exactly the same phrase deployed by Howard Ford, one-time head of the IBM PC Company, in the early 90s when he explain IBM’s move to sell PCs direct into the consumer and small business space. IBM dropped the scheme within months, on the grounds that sales never accounted for more than three per cent of business, and serious corporate resellers defected to -- you guessed it -- Compaq. Hewlett-Packard and IBM will pounce on any reseller fall-out. There will certainly be tears among corporate resellers, as they watch their biggest customer’s switch over to Compaq. Historically, the most channel-friendly of PC vendors, Compaq has calculated that it can afford to take this risk. With Digital and Tandem’s direct sales and technical team under its wing, Compaq now operates a professional services organization of 29,000 employees. The company also has a rich enterprise product portfolio, with a technology strategy centered around Windows NT, Unix, 64-bit computing, storage and the Internet, according to the Pfeiffer pitch. For some reason, he made no mention of networking hardware, an area where Compaq has stated its ambitions to reach number three in the market. Short of buying 3Com -- or Cabletron plus at least one other -- reaching that target is now an impossibility. But let’s not forget Compaq’s intentions in the consumer market space where --- according to Pfeiffer –- it is the world’s biggest player. Announcing two new Internet broadband desktop PCs for the American home market, Pfeiffer stressed once again the company’s determination to gain/retain leadership on price/performance. Is this leading to a price war, we wonder? At the Keynote, he announced the company’s treble play, broad band internet program, enlisting cable, satellite and DSL companies to supply access alongside the new PCs. “Our goal is to be the preferred supplier for the networked, digital home,” Pfeiffer said. Now that is a big theme. Unfortunately, we’ll just have to wait for next year's Comdex Keynote, to find out how Compaq intends to get there.®
Drew Cullen, 16 Nov 1998