Good morning Sonny,
I saw this story and wanted to pass it one to you:
NEW YORK (April 22, 1998 7:31 p.m. EDT nando.net) - In an effort to jump
start demand for its fledgling network computer business, IBM will announce on Thursday
it is teaming with Intel Corp., the chip giant and personal computer standard-bearer, on
future products in the area.
Under the partnership, the companies will work to optimize Java OS for Business -- a
network computer operating system that IBM is co-developing with Sun Microsystems Inc.
-- to run on Intel processors.
International Business Machines Corp. also said it would build Intel processors into future
versions of its Network Station line of network computers.
Network computers are low-cost machines that depend on the processing power of large
centralized computers known as servers. The devices, commonly referred to as NCs, are
designed as an easy-to-manage alternative to corporate networks composed of personal
computers.
Until now, the company has used its own PowerPC processors in the devices. IBM will offer
customers an option of processors starting in 1999.
The moves signal a shift in the development of the market for NCs, which companies like
Sun and Oracle Corp. have touted as a successor to PCs -- an Intel stronghold -- on
corporate desktops.
By extension, that vision has also pitted Sun in a bitter rivalry with Microsoft Corp., whose
Windows operating system dominates desktop computing.
In contrast, IBM -- one of the few companies actually selling significant volumes of NCs as
well as billions of dollars worth of PCs -- has taken a measured approach. Analysts said the
Intel pact dovetailed with IBM's strategy in NCs, one that puts business considerations ahead
of vision.
"We have called IBM the pragmatists in this area, and this is another clear example of that,"
said Greg Blatnik, an analyst at Redwood City, Calif.-based Zona Research.
Blatnik said the deal also showed the powerful sway Intel has gained over the keepers of
corporate purses even in an area where the company was not perceived as a major player.
"This may be the ultimate confirmation of the power of the 'Intel inside' branding effort,"
he said.
While the teaming of the companies will almost certainly bring more credibility to the
development of an NC marketplace, neither is pinning huge expectations on the segment.
"We see this as an adjunct to the PC market; we don't see it as a replacement," said Barbara
Dawson, director of software strategy for Intel's Business Platform Group.
For its part, Intel has sought to guide development in a way that preserves compatibility with its existing products.
That approach appears to have succeeded, as IBM has found some customers are more
willing to consider NC installations when Intel chips are involved.
"There is an interest on the part of at least some (corporate) purchasers to have Intel as an
architecture," said Art Olbert, vice president for business development at IBM. "We think this announcement will give people more confidence to buy."
While adding Intel as a partner brings more visibility to the segment, Olbert said the company was not broadening its target market for NCs or Java OS for Business. They are mainly aimed at transaction-intensive business areas such as bank tellers and airline reservation clerks.
By RICHARD MELVILLE, Reuters
Regards
Frank |
