cpq/intc see no problems from the DOJ/FTC
Hi Epinephrine,
Here is another writeup of the their alliance. Seems like the buzzwords of the day are "nonexclusive technology licensing."
Compaq Puts Eggs Into Intel Basket
Plans to kill Alpha by 2004; Says regulatory issues are not a concern
By Edward F. Moltzen, CRN
4:41 PM EST Mon., June 25, 2001
crn.com
Compaq and Intel executives shrugged off any potential regulatory concerns over Compaq's decision to get out of the processor business and let Intel hire its engineers.
At a New York press conference to announce the surprise technology-and-marketing deal, Compaq CEO Michael Capellas said there should be no such concern because the deal is a "nonexclusive" technology licensing to Intel.
The companies refused to release financial details but said Intel would eventually make employment offers to at least several hundred Compaq chip engineers.
At the crux of the deal is Compaq's decision to unify its server product line behind Intel's Intanium and Merced processors. Capellas said Compaq's decision centers around a desire to build solutions on "standard building blocks"--Intel's 64-bit processors.
"When we're done, we'll have a single baseline across all our platforms," Capellas said.
As a result of standardizing on non-Compaq processors, the Houston-based computer maker said it would allow Intel to begin hiring its Alpha engineers.
Compaq becomes the second major 64-bit chip maker, after Hewlett-Packard, to enter into arrangements with Intel and quit its own processor business.
Compaq acquired the Alpha processor and its technology as part of its $9 billion-plus acquisition of Digital Equipment three years ago. Since then, the company has maintained a steadfast commitment to the hardware architecture, as well as to its Tru64 Unix-based operating system. Tru64 will be ported to Intel's 64-bit architecture, according to Compaq.
Some solution providers that have been authorized resellers of Compaq's AlphaServers say they need more details about the agreement with Intel. And some suggest there could be a strong impact on their businesses.
"Right now, we were always talking [to clients] about two different marketplaces--one for Alpha and one for Intel," says Van Brooker, CEO and owner of Business Communications Systems of Illinois, Morton, Ill.
The Alpha systems are geared toward "the larger number-crunching, huge data storage-type of applications, whereas the Intel chip was more into the NT-server line, the Unix server line . . . e-mail and storage," Brooker says. "We're talking about two different computing requirements and load levels."
Eventually, though, Compaq executives say they are confident that even though they believe Alpha processors still are the performance leader, and will be for some time, the gap will eventually narrow and the market will choose Intel.
"Looking at it from an Intel perspective, Intel's losing a competitor in the high-end market," says Ernie Lessard, sales manager at Expert Server Group, a Bedford, N.H.-based Compaq solution provider. "More or less, it should position Intel/Compaq in a stronger position to get Sun [Microsystems]."
Lessard says his company does not bring AlphaServer solutions into client accounts and has yet to see Itanium systems generate buying interest. "Everybody is talking about it, looking at it, but we're really not seeing a lot of our business going in that direction yet," he says.
Compaq will continue refreshing the EV6 version of Alpha, and release its EV7, but has pulled the plug on releasing the EV8 version of the high-end platform.
As a result, the company will save hundreds of millions of dollars a year in research and development costs, according to estimates supplied by Compaq Executive Vice President Michael Winkler.
Compaq's decision to kill the Alpha line comes less than 18 months after the Federal Trade Commission eliminated requirements designed to foster competition with Intel.
Those requirements, which include the licensing of Alpha technology to other parties including Samsung and, at one time, Advanced Micro Devices, were "intended to promote the Alpha microprocessor as an independent, viable and competitive technology," the FTC wrote in an order ending the requirements.
"We've obviously looked at it pretty carefully and we don't believe there are any regulatory roadblocks," Capellas said. "This is an extension of competition in the marketplace."
Intel President and CEO Craig Barrett, who garnered recent attention from a meeting he had at the White House earlier this year with Presidential advisor Karl Rove--an Intel shareholder until recently--said the Compaq-Intel deal has not been the subject of any conversations with the White House.
Intel Executive Vice President Paul Ottelini echoed Barrett and Capellas, adding, "We are not buying the Alpha chip product lines. We're buying assets and resources as they finish up their project," a reference to Compaq's decision to stop making Alpha processors within three years and to let Intel hire its microprocessor engineers.
In an interview after the press conference, Winkler said Samsung's license on Alpha technology runs through 2004 but would not be extended beyond that.
FTC officials did not return phone calls seeking comment on the new Compaq-Intel agreement.
Intel has facilities near Compaq's Alpha headquarters in Massachusetts, a spokesman says, and employees hired would likely only have to work a short distance away. |
